October 16, 1999
Panama: Canal will remain under its control after turnover

                  WASHINGTON (AP) -- U.S. and Panamanian officials are dismissing
                  concerns that the Panama Canal will somehow fall under the control of
                  China or any other country after Panama takes over December 31.

                  Panamanian Alberto Aleman Zubietam, who heads canal operations as chief
                  administrator and will continue in the job when his country takes over, said
                  the independent Panama Canal Authority will maintain total control over ship
                  traffic and all canal activity.

                  "There will be no influence of any country on the operations of the Panama
                  Canal," Aleman said Friday at a conference on the canal sponsored by U.S.
                  and Panamanian businesses.

                  Senate Majority Leader Trent Lott 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.

                  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.

                  Aleman said a Hong Kong-based company's operation of ports at both ends
                  of the canal gives it no control over the canal. The company, Hutchison
                  Whampoa, operates at ports worldwide and says it has no member of the
                  Chinese government on its board. It competes with several other companies
                  at the Panama ports.

                  U.S. Army Secretary Louis Caldera, who also chairs the soon-to-be
                  dissolved U.S. Panama Canal Commission, agreed with Aleman that China
                  could not gain control of the canal, as did former Secretary of State Henry

                  "In the domestic debate, we should not invent imaginary dangers of foreign
                  influence threatening the security of the canal," Kissinger said.

                  Kissinger noted that both the Nixon administration, which he served, and the
                  Carter administration helped renegotiate the canal treaties that turn it over to
                  Panama at the end of the millennium.

                  Panama plans improvements in the canal aimed at increasing its capacity and
                  turning it into a profit-making enterprise. Canal financial officers said it
                  already turned a $29.4 million profit last year.

                  But engineers said it would be a challenge to find enough water to increase
                  canal traffic.

                  The United States completed the canal in 1914 and has operated it since
                  then. It includes a series of locks that lift boats up and over the narrowest
                  strip of land separating the Atlantic from the Pacific. When it was built by
                  70,000 workers, it included the world's largest earthen dam, largest artificial
                  lake and largest concrete structure.

                           Copyright 1999   The Associated Press.