Japanese Push New Canal

With an ample push from multinational business, plans are moving forward for the construction of a second canal in Panama capable of accommodating ships nearly eight times the size of those which travel through the current waterway. During a trip to Tokyo in late March, Panamanian president Aristides Royo announced tentative plans to study the feasibility of the $20 billion project. Under the 1977 Panama Canal treaties, the U.S. must approve any such plans.

The announcement is largely the result of intense lobbying by Japanese businessmen, particularly the globetrotting Shigeo Nagano, chief of the Japanese Chamber of Commerce - and former chairman of Nippon Steel. Since January, Nagano has travelled between Panama City, Washington and Tokyo, sounding out political leaders and pressuring them to approve a feasibility study. Nagano has grown so close to Omar Torrijos that the Panamanian strongman named a hill outside the country's capital' after him and awarded him a high state medal: "Nagano is the key figure in this whole deal," says Fumiko Mori of the U.S.-Japan Trade Council.

While Panama sees the new canal as a means of moving away from its traditional economic dependence on the United States, Japan views the waterway as sharply reducing transportation costs for trade with Latin America. About one-third of all goods shipped through the present canal are leaving from or destined for Japanese ports. The ' country's business community is especially anxious to lower shipping costs on Venezuelan crude and Brazilian iron ore.

Most observers feel Nagano can pull the deal off. "He is unbelievably wealthy and influential," says Walter Bastion of the U.S. Commerce Department. Others add ,that Nagano has a special incentive to succeed. His brother, Toshio, is chairman of Penta Ocean Construction Company, an international firm that recently completed work on the Suez Canal. Penta Ocean already has compiled a preliminary report on the new Panamanian canal, and is considered a frontrunner for the official feasibility study.

The U.S. response to the plan has been surprisingly low-key. While few expect the study to be rejected, it Iooks as if U.S. participation will be kept to a minimum. "The consensus seems to be that if there is a feasibility study we should be involved. But 1 don't think we would put up any money," says Nan Harley, member of a federal inter-agency task force monitoring implementation of the 1977 treaty. But if the canal plans become more than talk, she adds, "that attitude will certainly be subject to change."