Originally set up as two separate agreements -one that took away US claims on the Canal Zone and another that assured 'neutrality' of the actual canal- the Panama Canal Treaty finally guaranteed the ending of American interference in Panamanian affairs.
The agreement was first negotiated in principle in 1974, but was only ratified in 1978 following more student rioting in Panama City over continued US occupation of the Canal Zone. The fundamental importance of the treaty lay in the gradual takeover of the canal by Panamanians and their eventual running of it by the year 2000. There were vehement protests both in Panama and the US for different reasons -Panamanians wanting immediate US withdrawal, while Americans wanting continued involvement- nevertheless the treaty was approved by the respective governments.
In October 1979, the canal finally came under a new umbrella called the Panama Canal Commission. Consisting of both US and Panamanian officials -all of whom were chosen by their respective countries- it was set up as an agency to oversee the transition and continued running of the Panama Canal. At the same time, America increased payment for use of the canal to $10 million per annum. Another $10 million each year is paid out in profits, as well as an extra 30 cents per ton of shipping.
