History of the US-Panama Relationship 

Panama and the United States of America have had a special relationship over the years. The United States recognized Panama as a state on November 6, 1903, after Panama declared its separation from Colombia. On November 13, 1903, diplomatic relations were established.

In November 1903, just days after proclaiming independence, the United States of America and Panama signed the Hay-Bunau-Varilla treaty, which in its Article II stated that the Canal Zone was granted in perpetuity to the United States, this was a strip 5 miles wide on each side of the Panama Canal to build, manage, strengthen and defend an inter-oceanic canal.

Subsequently, on November 3, 1959, the "Operation Sovereignty" was conducted, led by the deputy Aquilino Boyd and Dr. Ernesto Castillero, in which the Panamanian people were invited, peacefully to enter the Canal Zone, carrying the Panamanian flag as an act of reaffirmation of sovereignty.

President Dwight Eisenhower then acknowledged that the Panamanian flag must be hoisted next to the American flag, but this decision was ignored, this leads to the Chiari-Kennedy Agreement to provide a viable solution to such controversy.

In 1963, the governor of the canal area announced the raising of both flags in the canal area, but this fact is completely ignored, causing discontent among the Panamanian population.

On January 9, 1964, the American students of the Balboa High School raised the United States flag in front of the campus, without accompanying the Panamanian flag, rebelling against the American authorities of the Canal Zone. 

At Balboa High School, Panamanian students were greeted by the Zone police, and by a crowd of students and adults. After negotiations between the Panamanian students and the police, a small group was allowed to approach the flagpole, while the police kept the crowd away.

In the course of the discussion, the Panamanian flag was broken into pieces. Meanwhile, protesters began to break the fence that separated the Canal Zone from the Republic of Panama. After successive volleys of tear gas, the police of the Zone began firing on those who pushed or broke the fence.

These disastrous events left a dark patch in our history and led to a decision making framework oriented towards Panama's right of sovereignty, among these decisions was that of then President Rodolfo Chiari that took the historic decision to break diplomatic relations with the United States. 

Diplomatic relations between Panama and the United States were reestablished on April 3, 1964, through the joint declaration Moreno-Bunker. 

In October 1968, a group of soldiers overthrew President Arnulfo Arias Madrid and took power, generating changes in the country's foreign policy. Panama assumes, then, its role as an independent country and initiates an aggressive and active diplomatic campaign before the main international organizations and forums (The United Nations Organization (UN) and the Movement of Non-Aligned Countries). As a result of this diplomatic process, it is possible that for the first time, the UN Security Council (1973) will meet outside its headquarters in New York, and there will be a historic and far-reaching resolution in support of the sovereign claim of Panama to the U.S.

Later, in the face of complex negotiations, the Tack-Kissinger Agreement was signed on February 7, 1974. This Agreement is the basis that will dictate the guidelines to follow later in the negotiations that will lead to the so-called Torrijos Carter Treaties.

After an arduous and complex negotiating process finally, on September 7, 1977, the Torrijos Carter Treaties were signed, establishing basic rules for the joint operation of the Canal until 1999 and guaranteeing its permanent neutrality, at the headquarters of the Organization of the States. Americans (OAS) in the city of Washington DC, with the presence of leaders of the region and important figures in international politics. Panama was represented by General Omar Torrijos Herrera and the United States by the then President Jimmy Carter.

The 1977 Panama Canal Treaties entered into force on October 1, 1979. They replaced the Hay-Bunau-Varilla Treaty of 1903 and all other treaties on the Panama Canal, which were in effect on that date. The treaties constitute a basic treaty that governs the operation and defense of the Canal from October 1, 1979 until December 31, 1999 (Treaty of the Panama Canal) and a treaty that guarantees the permanent neutrality of the Canal (Treaty of Neutrality ).

The details of the arrangements for the operation of the United States and the defense of the Canal under the Panama Canal Treaty are detailed in separate implementation agreements. The zone of the Panama Canal and its government ceased to exist when the treaties entered into force and Panama assumed full jurisdiction over the territories and functions of the Canal Zone, process completed at noon on December 31, 1999, when it was assumed the total jurisdiction and operational control over the Canal.

Currently, the diplomatic relationship between the Republic of Panama and the United States of America is based on mutual respect, mainly focused on bilateral cooperation on trade issues and hemispheric security.