Action Plan for Latin America
LEE, HENRY
SUMMIT CONFERENCE AT PUNTA DEL ESTE Action Plan for Latin America By Henry Lee punta del este The quest for markets, which has shaped so much human history, is now outlining Latin America's...
...industrial development would create a significant middle class, and "farm modernization" would make middle-class farm families...
...The document makes some reference to sub-regional integration, but if a common market develops that is what is expected to take place...
...Before the conference started, the cacm was actively bringing this about while others were discussing it...
...Latin America and several nations were left out in the cold...
...After World War II, Latin America found the immediate impact of increased export earnings inflationary and the eventual impact of decreased earnings also inflationary...
...Bolivia's Rene Barrientos stayed away because the conference would not discuss border problems like the one his landlocked country has had with Chile since the War of the Pacific ended in 1883...
...dignity...
...If the Bogota Five and other potential groups get together, they can negotiate and perhaps make Argentina and Brazil more interested in a common market...
...It remains to be seen, of course, if agreements on a Latin American common market, regional infrastructure, and trade promotion will be implemented by the conference's action plan...
...At this point the U.S...
...shifted its Alliance emphasis to a regional common market????an approach already being urged by several others...
...Plate River basin development and efficient telecommunications are infrastructure priorities," Felipe Herrara, idb president observed...
...In addition, oas members kept reminding the U.S...
...It was generally manufactured goods for raw materials of smaller members...
...Some asked just what might be integrated????sick societies or modern democracies, business elites or national economies...
...Johnson explained his own balance of payments problem, how U.S...
...By the time developing nations agree on preferences," the Nigerian delegation chief said, "we'll be developed nations...
...At the very least, the political base was established for those countries disposed to correct disjointed boundaries, distorted industries, and disparate development...
...agreed that universal trade preferences are dead for the foreseeable future...
...The U.S...
...But the conference got a new member in Trinidad-Tobago, a second English voice in eloquent Prime Minister Eric Williams, and thus a new and expanding dimension...
...He pointed out the successive steps that are likely to be taken: free trade, a payments union, and a customs union...
...Notable progress had developed in only about four countries toward these goals that were to produce nonviolent democratic social revolutions...
...The composition of their trade with other lafta members tends to incorporate into the region the major world trade problem...
...it has almost zero tariffs on such goods and so has nothing to negotiate...
...Modest social measures taken have not struck at educational systems traditionally preparing a small elite for their governing role...
...f^^PHE Declaration of the I Presidents of the Americas," is to light the way: ?"Latin America will create a common market...
...If Latin America can reverse this trend and integrate its inadequate national economies, overcoming incompatible geographical limits, what will happen...
...Had the Alliance's original agrarian and tax reforms been implemented, larger national markets would have supported viable economies among most members...
...This . . . will permit the region to play its deservedly significant role in world affairs," the Declaration read...
...delegation somehow apparently agreed to consider almost everything the Latins had ever dreamed about...
...How would it affect American business...
...They felt many lean years might develop for their one-or-two-crop export economies before any benefits would come otherwise from intra-Latin American trade...
...Government files are filled with unattended action plans, though this is the first one from the summit...
...And he said Latin nations could use U.S...
...Border integration on the Venezuelan-Colombia model is another good prospect...
...Some African nations were so pleased with their regional preferences they wanted no universal preferences...
...He went on to list the Pan-American Highway connecting Central and South America, along with a couple of roads bisecting South America's broad isolated waistline...
...The Inter-American Development Bank (idb) is already tooling up for the major role in this crucial task...
...Ridimac Romic, Left-wing leader of the governing Christian Democrats and a favorite for the 1970 Presidential election...
...Several small, unpleasant incidents added to Johnson's Senate burden, but he had the protection of a reported 1,500 security agents and 500 other helpers...
...Although the common market objective attracted the greatest attention in the press, most Latin members were more concerned about trade preferences and the untied aid alluded to in the third point...
...With several countries stabilizing their currencies," he added, "I think we can reach a payments union within five years...
...balance of payments problem...
...Brazil and Argentina have become an important trade bloc in lafta, which explains why they prefer to move more slowly toward a common market than others...
...aid from its exports and to get universal trade preferences for all developing countries????could backfire in the face of impending events...
...Industry, transportation, and population cling to a coastal perimeter, leaving a vast interior undeveloped and in many cases undiscovered...
...Since the summit conference was obviously tuned to economic development, measures on science and technology, education and health were postponed...
...Indeed, what little he did concede????promises to try to untie U.S...
...Perhaps never before did so many understand what the U.S...
...As this favorite idea of Presidential advisor Walt R. Rostow faded, lafta floundered, and traditional Latin markets in Europe faced increasing barriers...
...aid could only produce "2 per cent of other members' gross national product," with the rest left to hard work and self-help...
...He appeared as a reserved back-slapper, rather than a ruthless arm-twister...
...Mexico wants to grant trade preferences to cacm, which could make it another "Colossus of the North...
...SUMMIT CONFERENCE AT PUNTA DEL ESTE Action Plan for Latin America By Henry Lee punta del este The quest for markets, which has shaped so much human history, is now outlining Latin America's future...
...In an all-night session, developing countries could not even agree on a report...
...The alliance was faltering in the face of a changing world trend toward regional trade blocs of big powers endowing developing allies with trade preferences...
...Kennedy Round legislation did not permit negotiation on products like sugar that were "substantially produced in the U.S...
...Then Johnson began talking about "economic integration" in August 1965...
...For the United States, this first summit in a decade and second in history helped maintain????perhaps even revive????a shaky alliance...
...This involved trade preferences, untied aid, commodity (price-support) agreements, compensatory financing (for export short-falls), and collective economic security...
...As trade polarizes between them, foreign investment is concentrating in both countries with the idea that if a common market fails there will be a big national market to fall back on...
...Panama is negotiating entry into cacm...
...This would involve almost 100 million people with a gross product of more than $45 billion...
...Linking of the Orinoco, Amazo...
...It took a long time to get into the mess now existing...
...per capita growth rates of 4-6 per cent, the building of a million new homes and the education of 175,000 new doctors...
...One of three goals of the Kennedy Round to cut world trade barriers was to gain European Common Market access for Latin American farm and forestry products...
...assistance for their traditional exports that would have mainly benefited big landowners and mining companies while extending export structures blocking economic development...
...We will join in efforts to increase substantially Latin American foreign trade earnings...
...Washington was clearly supporting economic integration for the first time...
...and you will find us at your side . . ." He even looked over the shoulders of his colleagues around the table and invited Latin youth "who cry out for change" to help determine their own destinies...
...All of which explains much of Latin America's present geography, economics, and politics...
...Now let's see if it is implemented...
...No longer did the U.S...
...imply certain actions with vague language open to several interpretations...
...In seeking to boost Alliance aid $300 million yearly to $1.5 billion, Johnson told Congress last March 13 that for three years most of this would help finance a common market and the infrastructure that must precede it...
...The results "Johnson-ized" the Alliance for Progress, set the direction for Latin American economic integration, and possibly pointed the area toward a larger role in a changing world...
...Sub-regional trade blocs can clear the path to a common market if they do not become permanent fixtures, according to Santiago P. Macario, ecla trade expert who has participated in all recent Latin integration efforts...
...Trinidad-Tobago, Haiti and the Dominican Republic are expected to meanwhile join the cacm...
...Now the question is whether the U.S...
...Johnson had switched Alliance emphasis from social to economic development...
...Other ex-British Caribbean colonies are expected to follow Trinidad-Tobago...
...Then the General Agreement on Tariffs and Trade (gatt) met in January, also at Punta del Este, to consider how Kennedy Round benefits could be extended to developing countries...
...We will lay the physical foundations for Latin American integration through multinational projects (infrastructure...
...The Senate Foreign Relations Committee turned down the President's request for a commitment he could bring with him to the summit...
...As these regional preferences began pinching Latin trade, there began the Latin refrain: "We want trade????not aid...
...We will modernize the living conditions of our rural population, raise agricultural productivity in general, and increase food production for the benefit of both Latin America and the rest of the world...
...agreement to intervene in universal preferences is not apt to hike Latin foreign exchange earnings soon...
...FERNANDO BELAUNDE TERRY about these decisions...
...We will harness science and technology for the service of our peoples...
...It had done virtually nothing of the kind under the original Alliance, except for aiding the small cacm and fearing the anti-U.S...
...We will vigorously promote education for development...
...Latin elites, as they still do, kept demanding all sorts of U.S...
...This is regarded by Swedish economist Gunnar Myrdal as a major dilemma of developing countries...
...For President Johnson, the summit surprisingly gave him a good image among Latins that had long evaded his best efforts...
...they would have brought down ruling elites, and Latin American politicians, like others, don't fade away easily...
...This was the situation Johnson faced on arriving at this peninsula town that juts into the Atlantic Ocean where the German pocket battleship, Graf Spee, was dramatically disabled by three British cruisers in 1939 before a worldwide radio audience...
...It was also here in the government-operated San Rafael Hotel and gambling casino that the original Alliance was drafted...
...In the Declaration of Bogota last year, Chile, Peru, Ecuador, Colombia and Venezuela proposed a trade union of Andean countries with similar problems and prospects...
...We who signed the Bogota Declaration will probably join with cacm in a special trade agreement," Jose Antonio Mayobre, ex-secretary general of the United Nations Economic Commission for Latin America (ecla) and now Venezuela's minister of mines and petroleum, explained at the conference in outlining how Latin America will move toward a common market through sub-regional groups...
...The alternative would be massive hunger and unemployment...
...The nations outside the Plate River basin discussed various trade group combinations at the conference, and all together might become a significant trade bloc...
...Venezuela, Chile and Colombia are talking of integrating their pet-ro-chemical industries...
...Together their complementary economies accounted for $860 million of intra-lafta trade, estimated at $1.5 billion in 1966...
...These countries and perhaps several others will also meet later this month at Caracas to consider integrating their inefficient automobile industries...
...The three items dominated the three-day agenda at this busy international rendezvous...
...These presidents had been expected to do little more than ceremoniously approve essentially what their foreign ministers had hammered out in two previous conferences...
...This question raises all sorts of implications...
...But Johnson assured his Latin colleagues privately that he would seek universal trade preferences among other industrial powers for "all" developing countries...
...The response to the situation was a rash of import-substitution industries...
...It was noted that few benefits of the successful Central American Common Market (cacm) have yet trickled down to the poor, sick and ignorant...
...market for traditional exports than in their own common market and the export diversification it would facilitate...
...The so-called big three are largely exchanging country wants to make a payment, phone call, or shipment to another Latin country, he must go through New York...
...This is why," explained Alberto Sola, ex-lafta executive secretary and now Argentina's secretary of industry and commerce, "if a Latin in one (world's largest river basin), and Plate Rivers by the Piedmont Highway along the eastern slope of the Andes Mountains is also important...
...As for trade here and now, Latin nations left Punta del Este empty-handed, that being the way President Johnson had arrived...
...aid funds to buy capital goods from each other "if this would not adversely affect the U.S...
...Instead of increasing "substantially Latin American foreign-trade earnings" through preferences and untied U.S...
...can maintain a special friendship with Latin America without preferences, and thus continue its traditional "most-favored-nation" treatment in trade with everyone...
...A study will be completed in "several weeks" to determine if this can be done...
...would not do and what they must do for themselves...
...agreement to seek in-tra-Latin American trade in capital goods is even more empty...
...Some Latin Americans realize that continental federations alone have produced great powers today: the U.S., Soviet Russia, and the European Economic Community...
...What a wonderful speech," commented Chilean Ambassador to the U.S...
...The summit's background made Johnson's job here a showdown in Inter-American relations...
...This alone justified the conference," one observer said...
...Many observers gave other good marks for the conference they billed as the "most important event since independence for Latin America" and its relations with the United States...
...About all such goods produced are in Argentina, Brazil and Mexico, whose relative high levels of development are already delaying Latin American economic integration...
...In agreeing on progressive development of a common market within 15 years after 1970, machinery was set for the cacm and lafta to "converge" in stages...
...As Peru's Fernando Belaunde Terry advised: "It will be a good idea to check in a couple of years to see what has been done Henry Lee, a free-lance journalist, writes on Latin American affairs for the Baltimore Sun, Business Abroad and other publications...
...For Latin America, the summit finally made it clear that, while United States aid could help, the region's development and fate depend on long delayed self-help measures...
...Eighteen presidents and one prime minister faced this age-old problem at every turn in the recent Organization of American States (oas) summit conference here...
...Johnson did not get the chance to charm and perhaps reform Haiti's Francois ("Papa Doc") Du-valier, who apparently could find no reliable stand-in back home...
...Uruguay, and Argentina agreed at a foreign ministers conference last month on a flood control, transport, and power grid plan that could develop into a Tennessee Valley-type project in the world's second largest river basin of 1.6 million square miles and only 50 million people...
...And several months later, at Rio's Second Special oas Conference, the U.S...
...To correct this, the presidents agreed to link the interior, especially South America, with modern telecommunications, transport, international river basin development, and frontier integration...
...We will expand programs for improving the health of the American peoples...
...So the U.S...
...Latin America will eliminate unnecessary military expenditures...
...The European Common Market has pointed out to the U.S...
...others would only take them if compensated for their regional preferences, and they could not agree on what compensation they wanted...
...freedom...
...He finally found that language with which President Kennedy inspired the rich and dignified the poor: ". . . the clock is ticking...
...The ties of friendship among the peoples of the Continent will thus be strengthened...
...posture of the Latin American Free Trade Association (lafta), now including Mexico and all South America...
...But when you pull the flowers back and look at the weeds, these concessions seem empty...
...He pictured a Latin American population of 600 million by the year 2,000, which he said demanded a 6 per cent yearly increase in farm production...
...This required high tariff walls for inefficient uneconomic industries...
...The test for this will come at Asuncion, Paraguay in August, when lafta's Council of Foreign Ministers meet...
...Of all these modest measures taken at Punta del Este, the common market is seen as the only one that can save Latin America and bring it into the 20th century...
...But considerable give-and-take developed, especially in private bilateral talks...
...These two continental giants, the world's fifth and ninth largest nations, see much potential in integrating their own national markets...
...Would Latin America become another independent bloc in world affairs...
...If this continues," one informed observer feels, "then others will become economic colonies of the big three...
...The argument prevailed that economic progress must precede social progress...
...that Great Britain had trade preferences for its Commonwealth members, Soviet Russia for its satellites, and France for its ex-colonies...
...And Johnson got this kind of reaction despite his coming to the conference almost empty handed...
...Brazil, Paraguay...
...The Plate River basin countries of Bolivia...
...What would happen to the Inter-American Alliance...
...Most oas members are still more interested in access to the big U.S...
...Any agreements would be within lafta's machinery, which is to become the basic instrument for a Latin American common market...
...Then perhaps Latin America could negotiate from a position of strength with other world trade groups or industrial powers...
...The original 1961 Alliance for Progress, designed by President Kennedy to revise semi-feudal social structures through fundamental agrarian and tax reforms, was hardly mentioned in the eight-point "Declaration of the Presidents of America...
...The blue print for a common market has been drafted," he said...
...So an inferior Latin automobile, for example, costs three times more than a car in the U.S...
...aid, the item got a pious paragraph...
Vol. 50 • April 1967 • No. 9
