PANAMA CANAL WILL BE RUN AS BUSINESS AFTER TRANSFER

PANAMA CANAL WILL BE RUN AS BUSINESS AFTER TRANSFER

The Panama Canal will operate as a purely commercial enterprise when it reverts to Panamanian control in 2000, the chairman of the binational

commission that runs the waterway said.

Panamanians "want to de-politicize the operation," said Joe R. Reeder, undersecretary of the U.S. Army and chairman of the Panama Canal Commission's board of directors. "They are totally committed to ensuring the Panama Canal runs as a business."In what has become a litany of sorts from canal officials, Mr. Reeder assured a group of reporters last week that the canal's future in the "post- 2000" era is in good hands. He spoke a week after the commission approved a plan for a public relations campaign emphasizing the canal's "efficient and safe transit service" to the global shipping industry.

STUMBLING BLOCKS REMAIN

Mr. Reeder acknowledged during the interview that the United States and Panama have a few difficult issues to tackle.

They include the possibility that some U.S. military bases may remain in Panama after 2000, problems with money-laundering through Panamanian banks and claims by some Panamanian employees that the United States should give them severance pay after the U.S. government relinquishes control of the waterway at midnight on Dec. 31, 1999.

But he said the United States will ensure these problems do not cause undue tensions with the Panamanian government or the canal's 7,400 permanent employees.

"Our aim is to never get into a crisis stage with our work force and our customers who have depended on the last 80 years on using our canal," he said.

Asked about possible opposition to the turnover from right-wing politicians like Sen. Jesse Helms, R-N.C., Mr. Reeder replied there is "no serious rethinking" under way in Congress about renegotiating the Panama Canal treaty signed in 1978. That treaty was opposed by Sen. Helms and was often cited by President Reagan in his successful 1980 presidential campaign against President Carter.

CANAL REMAINS IMPORTANT TO US

Mr. Reeder said Panama will continue to be strategically important to the United States because over 12 percent of U.S. seagoing trade moves through the canal while 67 percent of all the canal's trade is either moving to or from the United States. "Its important that we think about that entity post-2000," he said.

Over the next 20 years, canal officials expect a 2 percent annual growth in trade. By far the largest commodity moving through the canal is grain, primarily corn, which makes up about 24 percent of total traffic. Petroleum makes up 16 percent and containers 14 percent of total trade.

Ships moving from the Eastern seaboard and the U.S. Gulf Coast to the Pacific Rim and China make up the most important trade lane using the canal. This year, the canal will have revenue of $605 million, earned primarily from tolls paid by the 455 ships passing through the canal.

"There's a lot of people who don't understand the canal is 100 percent self-sustaining," Mr. Reeder said.

PANAMA PREPARES FOR TURNOVER

To prepare for the turnover, Panama's Congress has passed legislation to create an entity that will operate the canal as a business. In addition, the U.S. Congress will vote this year on legislation converting the canal commission into a quasi-public corporation similar to Amtrak.

U.S. military forces in Panama are scheduled to pull out well before 2000, with the Southern Command relocated to Miami.

Mr. Reeder said there have been "informal discussions" about keeping some U.S. troops in Panama after 2000. He added that President Clinton is likely to discuss the troop issue when Panamanian President Ernesto Perez Balladares visits Washington in September.

Mr. Reeder said he was "very comfortable" with the security measures being taken by Panama to protect the canal, including 24-hour surveillance cameras. But he declined to discuss security in a public forum, saying that would be inappropriate.

The issue of severance payments for canal workers is being analyzed by the U.S. Office of Personnel Management. Mr. Reeder would not comment on that issue but expressed hope that the "vast majority of (the canal's) world-class work force will stay on." He said 92 percent of the work force, including 63 percent of the managers and supervisors, are Panamanian.

"There will be no discernible changes to the operation of the canal post- 2000," he said.