PANAMA'S VOTE COULD AFFECT U.S. DRUG FIGHT

PANAMA -- If Panamanian voters on Sunday reject a constitutional change
that would allow President Ernesto Perez Balladares to run for reelection,
as some pollsters predict, they may kill more than his hopes to remain in
power.

They may also destroy the last faint chance for a continued U.S. military
presence in Panama beyond 2000. The proposal to keep 2,000 U.S. troops here
after the Panama Canal comes under local control on the last day of 1999 is
already nearly dead. But, officials in both Washington and Panama City say,
defeat of the constitutional amendment would probably yank out the final
life-support tubes.

``If Perez Balladares loses, you're just going to have political chaos in
Panama,'' said one U.S. official. ``And an agreement like this one is hard
enough to negotiate when things are calm.''

The constitutional amendment on Sunday's ballot would allow presidents to
serve two consecutive terms in office, a practice now banned. A poll last
week by the opposition newspaper La Prensa showed it losing by nearly 20
percentage points.

The referendum may well turn out to be much closer than the poll indicates.
The president's supporters are much better organized than the opposition,
and are expected to do a much better job of getting out the vote. But Perez
Balladares must be considered an underdog as the weekend approaches.

'99 race could start Monday

That spells bad news for an agreement on U.S. troops. Not only would a
defeat Sunday leave Perez Balladares a lame duck, but it would touch off an
immediate scramble by politicians in every party -- including the
president's own -- for position in next May's presidential election.

``If he loses the referendum, Perez Balladares will still be president,''
said one U.S. official. ``If he wanted to come back to the table, he could.
But any agreement he reaches will have to be ratified by the Panamanian
Congress. Will he still be able to control it? Maybe. Are any of the
opposition parties going to let him negotiate in peace? No. Will the
presidential candidate of his party like it? Doubtful.''

Leaving negotiations to the next president would pose a huge problem. Any
successor to Perez Balladares would not take office until September 1999,
less than four months before the last U.S.soldier must leave Panama under
the terms of the 1977 canal treaty.

Nevertheless, added another U.S. official: ``There may still be a chance to
salvage it . . . We continue to be interested in the process of talking [on
a troop agreement] irrespective of the outcome of the referendum.''

Troops agreement unlikely

Even if Perez Balladares wins, any deal on maintaining U.S. forces remains
a long shot.

``I think [negotiations] are in a very difficult period,'' Perez Balladares
admitted in an interview with The Herald.

His foreign minister, Ricardo Alberto Arias, was even more blunt: ``Unless
something changes drastically, I don't see a future for the negotiations.''

Of course, drastic change has been the rule rather than the exception in
the roller-coaster negotiations over the U.S. troops. The talks, declared
all but dead several times since they began informally early in the decade,
led to an agreement announced by both sides last December.

But that deal -- for an international anti-narcotics base that would
include about 2,000 U.S. military personnel -- began unraveling just two
weeks later. The United States says Panama backed out of a done deal.
Panama says the United States tried to sneak into the final draft of the
agreement several points that had not been negotiated.

Talks resumed but grew more rancorous at every session. In July, U.S.
spokesman James Rubin announced they were ``at an impasse'' and the United
States would start looking for a different location for the anti-narcotics
base.

`Other missions' in dispute

The controversy centers on two things: Washington's insistence that U.S.
forces attached to the anti-narcotics center be permitted to engage in
unspecified ``other missions,'' and Panamanian insistence that the 12-year
agreement include an escape clause that would let either side back out
after just three years.

Panamanian officials say a compromise is probably possible on the length of
the agreement, but not on the ``other missions'' clause.

``That's the root of the problem,'' Perez Balladares told The Herald. The
United States keeps wanting to be able to carry out `other missions,' and
we keep saying, what other missions?''

U.S. officials say the Panamanian objection is unwarranted. The United
States simply wants to be able to fly supplies to its embassies around the
region from Panama, or to carry out humanitarian search-and-rescue missions
at sea, they say.

``Great, that can be done through an administrative accord,'' said Perez
Balladares. ``They can take a hangar at Tocumen International Airport and
fill it up with all the papers and Coca-Cola that they want, and send it
out from there.

``But why do these missions have to be part of a center that is supposed to
be exclusively for the fight against drug trafficking? `Other missions'
could be interpreted as them wanting to mount spy missions against us, or
who knows what.''

The president's unspoken fear, his aides say, is that a U.S. invasion of
some other Latin American country could someday be staged from Panama under
the ``other missions'' clause.

Herald staff writer Don Bohning contributed to this report.

Herald staff writers Glenn Garvin and Andres Oppenheimer can be reached by
e-mail at ggarvin@herald.com and aoppenheimer@herald.com

Checked-by: Joel W. Johnson