locked third State in order to facilitate its access to and from the sea only if the subject matter of the clause is the facilitation of access to and from the sea. Article 27. Cases of State succession, State responsibility and outbreak of hostilities

The provisions of the present articles shall not prejudge any question that may arise in regard to a most-favored-nation clause from a succession of States or from the international responsibility of a State or from the outbreak of hostilities between States.

Article 28. Non-retroactivity of the present articles

1. Without prejudice to the application of any rule set forth in the present articles to which most-favored-nation clauses would be subject under international law independently of these articles, they apply only to a most-favorednation clause in a treaty which is concluded by States after the entry into force of the present articles with regard to such States.

2. Without prejudice to the application of any rule set forth in the present articles to which clauses on most-favored-nation treatment would be subject under international law independently of these articles, they apply to the relations of States as between themselves only under a clause on most-favorednation treatment contained in an international agreement which is concluded by States and other subjects of international law after the entry into force of the present articles with regard to such States.

Article 29. Provisions otherwise agreed

The present articles are without prejudice to any provision on which the granting State and the beneficiary State may otherwise agree.

Article 30. New rules of international law in favor of developing countries The present articles are without prejudice to the establishment of new rules of international law in favor of developing countries.

Ibid., pp. 16, 18, 21, 23-25, 27, 33, 39-40, 42, 44, 49, 51-53, 55, 57, 59, 65, 68, 69, 71-72; International Legal Materials, Vol. XVII, No. 6 (Nov. 1978), p. 1518.

For the text of the provisional draft articles adopted by the International Law Commission at its 28th sess., together with the Commission's commentaries, see II Yearbook of the International Law Commission 1976, pt. 2, pp. 11-69.

During discussion of the final draft articles on the most-favored-nation clause in the Sixth Committee of the United Nations General Assembly on November 7, 1978, Robert B. Rosenstock, an adviser for legal affairs to the United States Mission to the United Nations, stated the United States preference for adoption of the most-favored-nation clause draft articles as a model law, rather than a treaty. His remarks were summarized as follows:

The draft articles and commentary on the most-favored-nation clause met the Commission's high standards and served as a useful guide to the interpretation of that clause. However, the draft would not alter the vast number of existing clauses, and in addition there were a number of exceptions. The exceptions contained in article 23 conformed to the generalized system of preferences which was recognized by the international community and the competent organizations. Those exceptions involved a subtle and interesting mix of law and economics, but if a treaty were to be contemplated, such an article must define the words "develored” and “am derlening," and that was an excessively ambitious task, at least in treaty drafting.

Articles 24, 25 and 26 also provided examples of when the most-favorednation clause would not apply, and other exceptions could be anticipated, for example, for customs unions, along the lines of article 23 bis. However, customs unions were not likely to be covered because members of such unions would probably not become parties to a treaty containing a most-favored-nation clause.

In the early days of the Commission there had been a debate between those favoring the elaboration of treaties and those favoring model laws. Those

favoring treaties had won their point, which had doubtless been the right path to take, but the Commission should not insist on conventions in all cases. His delegation considered the most-favored-nation clause as a paradigm case for an alternative way, namely a model law, which did not change clauses already in effect and would still be a useful guide for interpretation. In addition, the many exceptions to the most-favored-nation clause would make it very difficult to draft a treaty on the matter. His delegation therefore supported the model law approach over the treaty approach and suggested that the matter should be studied for another year.

U.N.G.A. Off. Rec. 33d sess., Sixth Committee, Summary Record of the 40th meeting, U.N. Doc. A/C.6/33/SR.40, Nov. 7, 1978.

Art. 23 bis, to which Mr. Rosenstock referred, had been proposed by Sir Francis Vallat of the United Kingdom. The Commission decided not to consider it for lack of time and inconclusiveness of comments made thereon. It would have provided:

Article 23 bis

The most-favored-nation clause in relation to treatment extended by one member of a customs union to another member

A beneficiary State other than a member of a customs union is not entitled under a most-favored-nation clause to treatment extended by the granting State as a member of the customs union to a third State which is also a member.

Ibid., pp. 13–14. See, further, I Yearbook of the International Law Commission 1978, pp. 125-141.

On Dec. 19, 1978, the U.N. General Assembly, by Res. 33/139, pt. II, invited all states, organs of the United Nations with competence in the subject matter, and interested intergovernmental organizations to submit written comments not later than Dec. 31, 1979, upon, inter alia, the draft articles on most-favored-nation clauses adopted by the International Law Commission, as well as those provi sions relating to such clauses on which the Commission was unable to take decisions, and also requested states to comment on the Commission's recommendation, that the draft articles should be recommended to member states with a view to conclusion of a convention on the subject.

U.N.G.A. Off. Rec. 33d sess., Sept. 19-Dec. 21, 1978, Jan. 15-29, and May 23-31, 1979, Supp. No. 45 (A/33/45), p. 221.

Communiques

Interpretation

Following conclusion of the United States Senate's debate on the Panama Canal Treaties, the Foreign Ministry of Panama issued a communique on April 25, concerning the Senate's reservations, understandings, etc., including the "DeConcini reservation." In a letter to President Carter on June 5, 1978, Senator Jesse Helms stated that the interpretations contained in the Panamanian Foreign Ministry communique either rejected or repudiated the "key" Senate changes. He took the position that unless the communique were withdrawn, with written assurances that Panama understood the Senate's intentions, the only alternatives left were to ask for another plebiscite in Panama on the Senate's text, or to return the treaties to the Senate for reconsideration of the Panamanian interpretations.

Assistant Secretary for Congressional Relations Douglas J. Bennet, Jr., replied on the President's behalf in a letter of June 14, reading in part:

We do not regard the Panama communique as a repudiation or rejection of the Senate resolutions of ratification of the treaties. The communique consists of a point-by-point description of the items contained in the resolutions, together with a commentary. It has no legal force.

Both the United States and the Panamanian instruments of ratification exchanged by the two countries contain the full texts of the amendments, conditions, reservations and understandings with which the Senate approved the Panama Canal Treaties. In the Protocol of Exchange which President Carter and General Torrijos will be signing on June 16, Panama will accept all of these amendments, conditions, resolutions and understandings. These are the documents by which the parties will be bound.

The Protocol will specify that the instruments delivered and exchanged by President Carter and General Torrijos shall become effective on April 1, 1979, unless the parties agree otherwise. If this date is not changed, the date of entry into force of the treaties will be October 1, 1979. These dates have been fixed in conformity with the reservation to the Panama Canal Treaty introduced by Senator Brooke of Massachusetts and incorporated in the Senate's resolution of ratification of the treaty.

As you will recall, that reservation provides that the exchange of ratifications "shall not be effective earlier than March 31, 1979, and the treaties shall not enter into force prior to October 1, 1979, unless legislation necessary to implement the provisions of the Panama Canal Treaty shall have been enacted by the Congress of the United States of America before March 31, 1979."

Once the Senate had given its advice and consent to the treaties, the United States had completed its political decision to accept them. To delay in delivering the instruments of ratification might have given rise to doubts about our good faith in pursuing our relations with Panama and with other American Republics in the spirit of the treaties. Moreover, it seemed desirable, in this way, to initiate a period of orderly planning for the transition to the new relationship which will exist between the United States and Panama under the treaties. With the ratification ceremonies completed, both countries can proceed with certainty to prepare for the entry into force of the treaties, next year.

Obviously, it will never be possible to achieve a complete identity of interpretation with respect to every one of the complicated provisions embodied in the Panama Canal Treaties, the ancillary agreements, the annexes and other notes, and the instruments of ratification. We cannot on that account fail to proceed conscientiously to carry out the decisions of the two countries, reached through their respective constitutional processes. As the treaties come into effect, some difficulties will certainly arise. We are confident that, with the same good faith and persistent effort evidenced by both sides during the treaty negotiations, they will be surmounted.

Dept. of State File Nos. P78 0091-1526 and P78 0098-1082; Cong. Rec., Vol. 124, No. 84 (daily ed., June 5, 1978), pp. S8495-S8496, and ibid., No. 92 (daily ed., June 15, 1978), p. S9262. The Panamanian Foreign Ministry communiqué of Apr. 25 was included as an appendix to Senator Helms' statement in the Record of June 5, ante, pp. 88496, S8514-S8521.

A Panamanian plebiscite on Oct. 23, 1977, held in accordance with the Panamanian Constitution, had approved the treaties as done on Sept. 7, 1977.

For the text of the Senate's amendments, conditions, reservations, and understandings in regard to the Treaty Concerning the Permanent Neutrality and Operation of the Panama Canal, see this Digest, Ch. 7, § 7, pp. 1032-1035, post. The "DeConcini reservation" to the Neutrality Treaty, as incorporated into the Senate's resolution of ratification under "(b) Conditions," read:

(b) Conditions:

(1) Notwithstanding the provisions of Article V or any other provision of the Treaty, if the Canal is closed, or its operations are interfered with, the United States of America and the Republic of Panama shall each independently have the right to take such steps as each deems necessary, in accordance with its constitutional processes, including the use of military force in the Republic of Panama, to reopen the Canal or restore the operations of the Canal, as the case may be.

As a result of Panamanian dissatisfaction with the reservation, a "leadership reservation" to the Panama Canal Treaty was subsequently worked out in order to reassure Panama that the United States had no intention of abandoning its adherence to the principle of nonintervention in the domestic affairs of other countries. This reservation, incorporated into the Senate's resolution of ratification in regard to the Panama Canal Treaty under "(a) Reservations," read: (a) Reservations:

(1) Pursuant to its adherence to the principle of nonintervention, any action taken by the United States of America in the exercise of its rights to assure that the Panama Canal shall remain open, neutral, secure, and accessible, pursuant to the provisions of the Panama Canal Treaty, the Treaty Concerning the Permanent Neutrality and Operation of the Panama Canal, and the resolutions of ratification thereto, shall be only for the purpose of assuring that the Canal shall remain open, neutral, secure, and accessible, and shall not have as its purpose or be interpreted as a right of intervention in the internal affairs of the Republic of Panama or interference with its political independence or sovereign integrity.

For the text of the Senate's reservations and understandings in regard to the Panama Canal Treaty, see ibid., pp. 1053-1055, post.

See, further, Library of Congress Congressional Research Service, Senate Debate on the Panama Canal Treaties: A Compendium of Major Statements. Documents, Record Votes and Relevant Events, Prepared for the Committee on Foreign Relations, U.S. Senate, 96th Cong., 1st sess. (S. Comm. Print 1979), pp. 12-14, excerpted, id., pp. 1056-1062, post.

The Government of the Republic of Panama accepted the U.S. Senate's amendments and conditions to the Neutrality Treaty, and its reservations and understandings as to each treaty, subject to a Panamanian understanding, which each separate Panamanian instrument of ratification contained, along with the text of the U.S. Senate's amendments, conditions, etc. See, further, this Digest, Ch. 7, § 7, pp. 1055-1056, post.

Each Panamanian instrument of ratification also declared:

The Republic of Panama declares that its political independence, territorial integrity, and self-determination are guaranteed by the unshakeable will of the Panamanian people. Therefore, the Republic of Panama will reject, in unity and with decisiveness and firmness, any attempt by any country to intervene in its internal or external affairs.

83

Senate Action

Amendment and Modification

Amendment

In connection with its advice and consent to ratification of the Treaty Concerning the Permanent Neutrality and Operation of the Panama Caral, the Senate Committee on Foreign Relations recommended amendments to articles IV and VI of the Neutrality Treaty, which incorporated in them the relevant portions of the CarterTorrijos Statement of Understanding, October 14, 1977. The Committee's report, issued under date of February 3, 1978, explained its recommendations as follows:

STATEMENT OF INTENT

The Committee's intent in recommending the adoption of these two amendments to the Neutrality Treaty is that the Carter-Torrijos Joint Statement of October 14, 1977, be made an integral part of the treaty with the same force and effect as those treaty provisions submitted to the Senate initially for its advice and consent.

The Committee had originally voted to include the Joint Statement in a single amendment which would have [sic: been] added as a new article IX to the treaty. Upon being advised by the State Department-contrary to previous advice that this placement could require a new Panamanian plebiscite, the Committee voted to reconsider the proposed article IX and voted instead to recommend the addition of that same material, in two parts, to articles IV and VI. This did not represent a "flip-flop"; in each instance the substantive wording was identical to that of the Joint Statement, and each provision-whether placed in one article or in two-would have had precisely the same legal effect, being equally binding internationally. The difference is purely one of cosmetics. If a negligible change in form, with no change whatsoever in substance, could obviate the need for a new plebiscite-an eventuality which could complicate vastly the ratification process-then the Committee concluded that it would happily oblige.

The meaning of these amendments, which together constitute the entire Joint Statement, is plain. The first amendment relates to the right of the United States to defend the Canal. (It creates no automatic obligation to do so. See p. 74 of this report.) [See this Chapter, pp. 703-704, and this Digest, Ch. 14, § 8.] It allows the United States to introduce its armed forces into Panama whenever and however the Canal is threatened. Whether such a threat exists is for the United States to determine on its own in accordance with its constitutional processes. What steps are necessary to defend the Canal is for the United States to determine on its own in accordance with its constitutional processes. When such steps shall be taken is for the United States to determine on its own in accordance with its constitutional processes. The United States has the right to act as it deems proper against any threat to the Canal, internal or external,