Courtesy Reuters

At the very core of Washington's diplomatic and political consciousness is an issue-the Panama Canal-that is providing a severe and illuminating test of America's post-Vietnam global intentions and of the U.S. government's post-Watergate capacity to compose a responsible foreign policy. The issue centers on the effort, conducted intermittently for the 11 years since the Panamanian "flag riots" of 1964, to negotiate a new treaty replacing the Hay-Bunau-Varilla Treaty of 1903. Signed for Panama by a French commission agent at Secretary of State John Hay's home two hours before the arrival of the official commission Panama had sent to negotiate, that agreement granted

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