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To: longtom who wrote (46909)	1/9/2000 7:10:00 PM
From: long-gone	Respond to of 116762

OT(maybe) Trading Water for Drugs By Shaun Dougherty 1/7/00 10:25 AM ET On December 31, the U.S. relinquished control over the Panama Canal. While this action will have almost no direct or immediate impact on our economy, there may be a long-term negative externality due to increased difficulty in monitoring the South American drug trade. The first point to make on the issue is that claims by some Washington conservatives that the transfer will result in Chinese control of the passage are unfounded. Moreover, the U.S. has largely outgrown its use of the waterway. That is, the canal can no longer service U.S. aircraft carriers and larger cruise ships and oil tankers. There have also been no immediately announced increases in the cost of using the canal, which might otherwise have hurt transportation, or trade-related firms. Both facts make the canal further economically insignificant. Relinquishing control of the canal and closing all the associated military bases leaves Guantanamo Bay, Cuba as the only remaining U.S. military base in Latin America. It is this loss of military presence where the point of economic concern materializes for the U.S. While the loss of jobs at the bases and the actual control of the canal are inconsequential in that they create no real cost or benefit, there could be a sizeable indirect cost in the way of drug-related externalities. Until military personnel began leaving in droves earlier this year, the Panama Canal was the center of U.S. efforts to curtail the flow of heroin and cocaine from Columbia, Bolivia and Peru. Not only were large amounts of drugs seized at the canal, but Howard Air Force base, formerly located in the isthmus, was the command post for U.S. counter-narcotics operations, including airborne warning and control system surveillance. Closure of the base forces counter-drug missions and flights to be run from U.S. positions in Puerto Rico, Honduras, and Florida, making the flights less effective and considerably more expensive. Concurrent changes in Venezuelan government policy now restrict U.S. use of Venezuelan airspace to(cont) dismal.com