The Lead-Zinc Order

...Apparently, the brief interlude of good neighborliness following the Nixon incidents was too much for U. S. policy-makers...

...The twenty foreign ministers from Latin America were given the red-carpet treatment by the State Department...

...Six nations are seriously affected by the lead-zinc cut: Australia, Bolivia, Canada, Mexico, Peru and South Africa...

...This would have taken the burden off us...

...Ironically, the worst sufferer of all will be the very country in which Nixon was first attacked: Peru...

...The "Peruvian Foreign Minister, Raul Porras Barrenechea, had this to say about the Eisenhower order: "This measure means that in Peru 12,000 workers will be thrown out of employment and $20 million in annual income will be lost...

...Nevertheless, it is important as a dollar-earner, and must seriously hurt the country's ability to maintain its recent high level of capital goods imports essential to industrialization...

...However, we recall the refrain: 'The road to hell is paved with good intentions.'" Besides the 12,000 unemployed Peruvians which the lead-zinc order will create, many thousands of other workers in industries partially dependent on lead-zinc mining-railways, shipping, retail establishments and so on-will either be thrown out of work or reduced to part-time employment...

...Last June, the Vice President of the United States was stoned and spat on by angry Latin American mobs...

...Up to 50,000 lead-zinc miners, many of whom will be thrown out of work altogether or employed only part-time will also be affected...

...the President even sent his brother Milton on a "study" tour as an earnest of our sincerity...

...The companies responsible for 90 per cent of Mexico's lead-zinc production are U. S.-owned, chiefly American Smelting & Refining and Compa?ia Pe?oles, S. A. So the President of the United States has signed an order to save U. S. mining companies at home at the expense of U. S. mining companies abroad...

...if it is true that we are partners, then decisions should be taken by us all together and not unilaterally...

...This will work additional hardships on a country desperately trying to climb out of a semi-feudal state...

...For example Mexico's exports of zinc to the United States during the second quarter of 1958 were 48,000 tons...

...The same day, the same President of the United States who had posed smiling with them for pictures signed the lead-zinc order-thus torpedoing the conference and setting back hemisphere relations to the point at which Nixon was stoned...

...Two smelters in the United States which depend on lead-zinc imports may have to shut down, according to John D. MacKenzie, chairman of American Smelting & Refining, which owns them...

...But it is Administration policy not to interfere with the so-called laws of supply and demand and to stay out of multilateral quota agreements-at least where Latin American minerals are concerned...

...It would have been cheaper, financially and politically, to have put those workers on the Government payroll and kept them at home...

...Must it take the sending of another high-level official to Latin America, for another stoning, before we can again enjoy such an interlude...

...The outbursts were fundamentally motivated by the harm our economic policies have done to the Latins...

...Our two best foreign customers are Canada and Mexico, which are also two of the countries hardest hit by the Eisenhower order...

...Maximum output was reached during the years 1925-29, when it averaged about 670,000 short tons annually...

...It will, however, kill off a lot of business for healthy U. S. industries cause some unemployment in those industries, damage the economies of several friendly nations and arouse considerable antagonism abroad...

...All summer and fall we have been making promise after promise to improve those policies...

...But the countries producing lead and zinc have been selling more to us this year than ever before, so that a 20 per cent reduction based on a five-year average comes closer to 30 per cent of 1958 sales...

...At U. S. Government expense, they were brought down to Washington from New York, where they had been attending the UN General Assembly...

...When, in answer to the plea of Brazilian President Juscelino Kubitschek for a meeting of American Presidents, we proposed a conference of foreign ministers as a preliminary, the Latins thought that we were becoming truly responsive to their needs...

...The order says we will import 20 per cent less lead and zinc than we have been buying over a five-year period from 1953 to 1958...

...Mining now accounts for only 5 per cent of Mexico's gross national product...

...And it will hurt, perhaps more seriously many people dependent upon the mining industry...

...Tampico, for example, the principal port for mineral shipments abroad, is expected to experience a recession due to the Eisenhower order...

...The three Latin American countries are hardest hit...

...That comes to 26-not 20-per cent of the average of Mexico's zinc exports to us this year...

...It is said that the United States has adopted this measure at a time that is critical for its own mining interests, but that it has good intentions with respect to solving the economic problems of the Hemisphere...

...Consumption, on the other hand, has been steadily rising and-experts say-will continue to do so...

...Most of Peru's income derives from mineral exports, and of these by far the most important are lead and zinc...

...If that cuts their dollar income to the extent where they are forced to reduce their imports, we will be hit, in turn, since most of their imports come from the United States...

...They were wined and dined by President Eisenhower in the White House and sat down to wrestle with inter-American problems on September 22...

...In Mexico, the effect of the lead-zinc order will not be as great, because the Mexican economy is more diversified and generally more highly developed...

...Early last September, a UN conference did propose a 20 per cent cut in current world production...

...U. S. enterprises dependent upon the export market are also likely to be affected, some more seriously than others...

...All of these consequences result from the determination of the Eisenhower Administration to bolster an industry which employs, at the moment, the grand total of 3,500 workers...

...Some 1,400 gambusinos, small mine operators who account for 10 per cent of Mexico's lead-zinc production, may be forced out of business...

...They were gratified by our decision to participate in talks to stabilize coffee prices and our decision to support the establishment of an inter-American development bank...

...The loss of $20 million or more in income per year will mean that Peru must drastically reduce her imports, largely of heavy machinery and equipment for industrialization...

...Thus, imports of lead and zinc are indispensable to our own economy and not a matter of doing foreign nations a favor...

...The Latins seemed about to be persuaded that their northern neighbors were sincerely desirous of making amends...

...But the figure is misleading...

...Intended to bolster the tottering U. S. lead-zinc industry, the order will do nothing of the kind...

...During the 1925-29 period, it averaged about 900,000 tons...

...On the surface, it would appear that a cut of 20 per cent in our lead-zinc imports is not much...

...The cut not only hits the Mexican economy but American companies...

...Lead production, for example, has been falling for three decades...

...And so will many others who, as in Peru's case, work in shipping, rail transportation and other industries dependent to some extent on lead and zinc...

...Perhaps further back, for the lead zinc order reverts to the time when an isolationist, tariff-minded U. S. was erecting trade barriers against every foreign nation...

...The United States could have taken the lead in getting the producers to arrive at a multilateral agreement based on the UN proposal, or perhaps a lower cut...

...American companies at home will also be hurt...

...today it approaches 1,250,000, or nearly a million tons more than U. S. lead producers turn out...

...It is true that there exists a chronic problem of world over-production of lead and zinc, and to some extent the producing countries have been at fault for not agreeing to quotas for each other...

...Under the Eisenhower order the quota for Mexico is now 35,240 tons a quarter...

...import quotas by 20 per cent, Washington dealt a real blow to Peru, Mexico, Bolivia The Lead-Zinc Order By Daniel James Mexico City Few Presidential acts have been more wrong-headed than the order that Dwight D. Eisenhower signed last September 22 cutting our lead and zinc imports by 20 per cent...

...No wonder the Peruvians call the Eisenhower order an act of "economic aggression" against them...

...Certainly the Eisenhower order cannot help the ailing U. S. lead-zinc industry...

...since then, it has declined to about 300,000 a year...

...It is said that we are partners in the same enterprise...

...Actually, the cut will amount to much more than 20 per cent of current imports...