October 19, 1999
Clinton, Panama's leader to hold Canal talks
U.S. transfers ownership of vital waterway at year's end
                  WASHINGTON (CNN) -- President Clinton is meeting Tuesday with
                  Panama's new president to discuss trade and security issues and smooth out
                  differences before the United States hands over control of the Panama Canal
                  at the end of the year.

                  A Panama delegation to Washington led by President Mireya Moscoso,
                  who took office September 1, is expected to urge the United States to
                  continue clearing unexploded bombs from the Panama Canal Zone.

                  U.S. forces used part of the canal zone for target practice during a
                  96-year military presence in the Central American country.

                  The United States says it has done all it can to remove weapons from
                  the thick jungle, but Panama is not convinced the U.S. effort meets the
                  terms of the 1977 treaties under which Panama will take control of the
                  canal at noon on December 31.

                   Other issues for discussion:

                  The United States, which has agreed to pull all troops out of Panama,
                     would like to keep a military presence there because of the growing
                     influence of drug traffickers.

                 Moscoso insists the United States clean up pollution caused by
                    military operations.

                  Both Moscoso and Clinton want to increase commercial trade.

                  The canal is a crossing point between the Atlantic and Pacific for 144
                  shipping routes. Traffic last year reached 14,000 ships carrying 228 million
                  tons of cargo -- about 4 percent of global seaborne trade.

                  Chinese influence?

                  Senate Majority Leader Trent Lott (R-Mississippi) and other critics of the
                  canal turnover have raised fears that China may be seeking control of the
                  vital waterway through a Hong Kong company's port operations.

                  Panama insists that the Hutchison Whampoa Company's operation of ports
                  at both ends of the canal gives it no control over the canal.

                  The company, which operates at ports worldwide, says it has no member
                  of the Chinese government on its board. It competes with several other
                  companies at the Panama ports.

                  Rep. Dana Rohrabacher (R-California), has said Hutchison Whampoa
                  maintains  close ties with China's People's Liberation Army.

                  The Clinton administration, however, sides with Panama and says it does
                  not believe Hutchison Whampoa's activities constitute a threat to the neutrality
                  of the canal.

                  The Senate Armed Services Committee will hold a hearing Friday on the issue.

                  The Panama Canal treaties authorize the United States to take whatever
                  actions are necessary to maintain the neutrality of the waterway.

                  Although the transfer takes place at year's end, ceremonies marking the
                  event will be held in mid-December to allow more world leaders to attend
                  by avoiding conflicts with end-of-century celebrations.

                  Moscoso is expected to invite Clinton to the celebrations, Panamanian
                  government sources said.

                  White House Correspondent Chris Black, The Associated Press and Reuters contributed to
                                           this report.