COMBAT IN PANAMA : Canal to Be Put in Panamanian’s Hands as Scheduled; Operations to Resume Today

In less than two weeks, day-to-day operations of the Panama Canal are scheduled to be put into the hands of a Panamanian--despite the most acute crisis in the long, uneasy relationship between the country that built it and the nation destined to own it.

For several hours early Wednesday, as American armed forces battled the troops of Gen. Manuel A. Noriega, the historic 51-mile waterway was closed for the first time since ships began using it in August, 1915, as a shortcut between the Atlantic and Pacific.

At mid-afternoon Wednesday, the Panama Canal Commission office in Washington issued a statement saying that ships in the canal at the time the U.S. military action was launched would be allowed to pass through.

A regular schedule of operations is expected to resume today.

The invasion notwithstanding, Fernando Manfredo, a former Panamanian minister of commerce and one-time friend of Noriega, will become the canal’s acting administrator Jan. 1. Manfredo will replace Dennis P. McAuliffe, an American who has run the canal for the 10 years since the United States agreed to turn it over to the government of Panama.

Manfredo’s assumption of operational control of the canal marks an important milestone in U.S. compliance with the controversial 1978 Panama Canal treaties, which provide for the government of Panama to assume full ownership of the waterway on Dec. 31, 1999.

Even as American troops and Panamanian forces engaged in fire fights Wednesday, President Bush reaffirmed America’s commitment to implement the controversial agreements, which contributed to Jimmy Carter’s defeat by Ronald Reagan in the 1980 presidential race.

“I am fully committed to implement the Panama Canal Treaties and turn over the canal to Panama in the year 2000,” Bush said in announcing his decision to order military intervention. “The actions we have taken and the cooperation of a new democratic government in Panama will permit us to honor these commitments.”

The decision to make Manfredo acting administrator on schedule was made against the advice of William Gianelli, who resigned as chairman of the joint Panama Canal Commission last spring after eight years on the job.

Because of the rising tensions and harassment of Americans by Noriega’s armed forces, Gianelli proposed that the American who will become deputy administrator on Jan. 1--as yet unchosen--also be made acting administrator until tensions eased.

But when the Noriega government nominated the general’s friend, Thomas Duque, to succeed McAuliffe, the Bush Administration vetoed the choice and announced that Manfredo would become acting administrator until an acceptable permanent administrator is found.

Under terms of the canal treaties, Panama recommends a nominee to the President, who makes a formal nomination to the Senate.

Until now, the canal has remained under firm American control, with the U.S. providing five members, including the chairman, of the nine-member commission.

While the next administrator will be a Panamanian, America will continue to control the commission until ownership of the canal is finally passed to Panama. The United States also will retain responsibility for defense of the canal, once counted among America’s primary strategic assets.

With the advent of huge container ships and U.S. Navy vessels that cannot pass through the canal, it no longer is considered as strategically vital as in the past. Even so, it continues to have enormous economic impact upon Central and South America.

In the 10 years since the treaties were signed, the canal has continued to operate as smoothly as ever, its technologically obsolete locks kept in top condition by continuous maintenance.

But the railway across the isthmus, which has been turned over to the government of Panama, along with 70% of the 500-square-mile Panama Canal Zone, has fallen into disrepair.

Some knowledgeable sources said that they expect the new Panamanian government to recommend Manfredo as the permanent administrator and that Bush, as promised Wednesday, will send the nomination to the Senate for “expedited consideration.”

Gabriel Lewis, the former Panamanian ambassador to Washington and a foe of Noriega, called Manfredo “the most capable of all Panamanians” and a “first-class administrator.”

But in the tense political atmosphere created by the long confrontation with Noriega and the military intervention, Gianelli predicted that Manfredo will encounter serious problems trying to balance Panamanian interests with U.S. requirements imposed by the canal treaties.