U.S., PANAMA TO ABANDON CANAL ANTI-DRUG CENTER

PANAMA CITY (Reuters) -- The United States and Panama most likely will
abandon plans for an international anti-drug center in the Panama Canal
Zone, ending more than 90 years of a U.S. military presence here, political
analysts said Sunday.

Their observations came a day after U.S. and Panamanian officials said they
were locked in a stalemate on the deal, which would extend a role for U.S.
troops beyond Dec. 31, 1999, when Panama assumes full control of the famous
waterway.

``I believe they are just letting it down softly, trying to not make a
major issue of it,'' analyst Roberto Eisenmann told Reuters.

``I believe it is finished because ... the MCC (Multilateral
Counter-narcotics Center) can easily be established in Florida or Georgia
and be as effective as it would be in another country,'' he added.

Under the original proposal for the center, the United States would keep at
least 2,000 U.S. troops stationed at Howard Air Force Base, gathering
anti-narcotics information into the next century.

Otherwise, a 1977 treaty stipulates that the United States must hand over
control of the canal and vacate all bases and territory by the last day of
1999.

But neither side has shown signs of compromising in talks to set up a
regional drug-fighting center at Howard Air Force Base in the Panama Canal
Zone, a 10-mile-wide strip encompassing the canal.

The Americans are seeking at least a 12-year deal granting U.S. troops a
role beyond drug fighting, while Panama is seeking a more restrictive
agreement lasting three or four years, Panama's foreign minister said
Saturday.

Panama has long been a home for U.S. military power. The Canal Zone,
controlled by the United States since 1903, was home to thousands of troops
and at least 10 military bases at its peak. It also was the site of the
U.S. Southern Command, military headquarters for operations in Latin
America.

The possible U.S. departure from Panama may signal a shift in American
military policy in the region, Margaret Scranton, a political analyst at
the University of Arkansas at Little Rock, told Reuters.

``It certainly is a historical benchmark, the ultimate physical step out of
the Monroe Doctrine and the whole concept of U.S. security identified with
bases on foreign soil,'' she said. ``But whether it is the end of U.S.
intervention is just too early to tell.''

Analysts said the negotiations have been held hostage by Panamanian
politics and the controversial re-election bid of the country's president,
Ernesto Perez Balladares.

Constitutionally barred from running for a second consecutive term, Perez
Balladares is campaigning for an Aug. 30 referendum that may allow him to
be re-elected. But his shaky standings in the polls have paralyzed him from
making any significant decisions, they said.

The analysts also said the drug fighting center likely will be abandoned
because of internal politics.

``This is one of a great many of things that have been disturbed by Perez
Balladares' re-election ambitions,'' said Richard Koster, a political
commentator and former U.S. Democratic Party activist now living in Panama.
``The main reason (for the breakdown in talks) is internal politics.''

Checked-by: (Joel W. Johnson)