The former Panama Canal Zone, which was considered as part of the United States from 1940 through the third quarter of 1979, was incorporated into the Republic of Panama with the entry into force of the Panama Canal Treaty of 1977 on October 1, 1979. This territorial change necessitated changes to the U.S. government’s foreign investment account (measured at book value) as well as to the services accounts, the private direct and portfolio investment accounts, and the goods accounts.
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