U.S. Weighs New Sanctions on Panama

Searching for new ways to protest Gen. Manuel A. Noriega’s installation of another puppet government in Panama, the Bush Administration is exploring the possibility of imposing additional economic sanctions on the cash-squeezed Central American country.

Although the discussions still are preliminary, White House policy-makers are considering a series of options that, while mostly symbolic, would dramatize Washington’s opposition to the Noriega regime and possibly step up pressure by other governments.

The list of options under consideration includes forbidding imports of products manufactured by firms owned by top Noriega lieutenants, permanently preventing Panama from exporting sugar to America and barring U.S. firms from paying import duties to Panama.

Administration strategists said that the White House must act within two weeks if it expects the new sanctions to have any effect. After that, they conceded, so much time will have elapsed since the new government was installed that any impact would be minimal.

The new Panamanian government, headed by former Noriega classmate Francisco Rodriguez, assumed power last Friday. Noriega earlier had blocked the certification of Guillermo Endara, regarded by the United States as the winner of Panama’s election last May. The Administration has refused to recognize the Rodriguez regime, claiming that the May election was rigged.

But officials cautioned that the question of whether to impose new sanctions on Panama is far from settled and that the Administration could end up deciding not to recommend any new restrictions.

The consensus inside and outside the White House is that the sanctions imposed by the United States so far have been largely ineffective--much to the embarrassment of Washington, which initially predicted that Panama would relent within a few weeks.

Earlier Sanctions

The first U.S. restrictions were imposed in March, 1988, when former President Ronald Reagan ordered the seizure of Panamanian government assets in the United States and placed U.S. payments for use of the Panama Canal and an oil pipeline in escrow pending Noriega’s expected resignation.

Later, the U.S. Treasury sought to prohibit American firms in Panama from paying Panamanian taxes. The United States also suspended trade preferences traditionally granted to Panama. Then-Assistant Secretary of State Elliot Abrams predicted that the steps would be “a knockout.”

But the Noriega regime managed to circumvent the U.S. restrictions, threatening to jail American businessmen who did not pay their taxes promptly. And the Panamanian government kept functioning--partly, some analysts said, on proceeds from drug money.

Today, Panama still is surviving--albeit in an economically depressed state--and Noriega has remained at its helm, naming a puppet government to provide a semblance of civilian rule.

Earlier this month, Bush Administration officials detailed new charges before the Organization of American States accusing Noriega and his top associates of engaging in extensive drug trafficking, but so far few countries have taken any new action.

Just how few economic options are available to the United States is illustrated in the proposal to end Panama’s share of U.S. sugar import quotas. Although Panama technically could ship up to 34,000 tons of sugar to the United States, the quota already has been suspended.

Elimination of the Panamanian allocation would only enable Washington to redistribute Panama’s share to other sugar-exporting countries. There would be no actual economic impact on Panama.

There was no immediate indication of when the White House might decide whether to impose additional economic sanctions on Panama. Administration strategists said the topic could come up as early as this week.