History of the Panama Canal
During World War II, the canal proved a vital part of the U.S. military strategy, allowing ships to transfer easily between the Atlantic and Pacific. Politically, the Canal remained a territory of the United States until 1977, when the Torrijos–Carter Treaties began the process of transferring territorial control of the Panama Canal Zone to Panama, a process completed on 31 December 1999.
History of Panama (1977–present)
The second treaty, the Treaty Concerning the Permanent Neutrality and Operation of the Panama Canal, or simply the Neutrality Treaty, was a much shorter document. Because it had no fixed termination date, this treaty was the major source of controversy. Under its provisions, the United States and Panama agreed to guarantee the canal's neutrality "in order that both in time of peace and in time of war it shall remain secure and open to peaceful transit by the vessels of all nations on terms of entire equality". In times of war, however, United States and Panamanian warships were entitled to "expeditious" transit of the canal under the provisions of Article VI. A Protocol was attached to the Neutrality Treaty, and all nations of the world were invited to subscribe to its provisions.