Hemisphere 'Partnership'

...LATIN AMERICAS RESPONSE TO Hemisphere BY JAMES S BRADSHAW ? "^^ "Rational pohcy-mak> I^WJ mg," a perceptive JL Cabinet member once remarked, "is like the mating of elephants There is a lot of dust raised, and some frenzied activity m high places But it takes 21 months to produce the baby " This barbed metaphor seems particularly applicable to the Nixon Administration's well-trumped Latin American "policy " The "baby" —U S actions or commitments to assure the continuance of at least some measure of hemisphere unity —has yet to be produced And if the predictable insufficiency of the President's remarks on the subject in his February 18 foreign policy report to Congress is any indication, the elephant's labors will brmg forth only a mouse Nixon's intentions toward Latin America, of course, have always been a little murky In the 1968 campaign there was relatively little discussion of the area John F Kennedy once termed "the most critical" in the world, inspiring speculation, after the election, that the region would be given merely peripheral attention Unlike Europe, Asia or Africa, however, Latin America has been of vital concern to this country for 150 years, and no U S statesman could openly disavow that tradition Even before the Monroe Doctrine, North Americans were quick to assert and exercise their special interests in the 20 (now 23) nations south of the Rio Grande Latin Americans, m turn, although disliking certam features of U S hegemony, have generally endorsed the idea of a "special relationship" among the countries of the Western Hemisphere Accordingly, one of the President's first official actions was to request New York's Governor Nelson A Rockefeller to make a series of "listen and learn" visits to our neighbors This, amid much turbulence and controversy, the Governor did, presenting his still confidential report to the President in the late summer of 1969 On October 31, Nixon made his first major statement on hemispheric affairs His call was for a "partnership," a decade of "action for progress," and a general toning down of North America's presence south of the border To these ends, the President said U S aid restrictions would be loosened to permit purchases of goods withm Latin America Promising advance consultation on trade matters, he declared himself agreeable to a review of U S economic policies through an appropriate in-ter-Amencan entity The United States, he pledged, would seek with other industrialized nations a "liberal system of generalized tariff preferences for all developing counJames Stanford Bradshaw, a former Associated Piess coirespondent in Latin Ametica, now teaches history at Michigan State University tries, including Latin America," and he stressed the importance of private investment as a promoter of economic growth Finally, he indicated that Washmgton would accept Latin American governments as they come, democratic or dictatorial On November 10, at a White House meeting with the press to release a pubhc version of the only-partially-accepted Rockefeller report, the President went a step further If the other industrial nations would agree within a reasonable time to a system of generalized trade preferences, he said, his Administration "wdl be prepared to consider other alternative actions it can take to assure that the American nations will have privileged access to the United States market" In Latin America, meanwhile, preparations were going forward for a February meeting m Caracas, Venezuela, ot the Inter-American Economic and Social Council (ia-ecosoc) The impending conference had come to be regarded as an important test of Washington's intentions For it was hoped that the Administration would use the occasion to resolve complaints and problems listed in the Consensus of Vina del Mar This highly critical document, directed specifically at the United States, was drafted by Latin American ministerial representatives at two meetings in Chile last April and May, and was formally presented to the President at a White House ceremony in June Its significance lies not m its 46 points nor its quer-ulousness, but rather in the fact that it was drawn up by Latin Americans alone, without U S participation The document makes it quite clear that a process of polarization has begun, that Latin America, like the United States, intends to determine its own interests If m the future there are areas of coincidence, these can be discussed But working with the US to develop joint interests, the Consensus' principal piomoters have indicated, should be a thing of the past In all probability, they are exaggerating Indeed, the most notable aspect of the document's various proposals is the expression of a widespread desire for more rapid economic and social growth Beyond that, the depth of commitment by many of the signatories is questionable Individual nations (and geographical regions) have concerns, not mentioned, which they would be reluctant to entrust to commonly conducted negotiations Thus while there is agreement on general problems, bilateral discussion of specifics would still appear to be preferred The United States, therefore, must contmue to think m terms of individual countries—not a monolithic Latin America At the same time Washington cannot disregard their fierce national desires for faster progress?precisely what the proposals advanced by the Consensus are designed to achieve Very basically, the Latin Americans want more capital —money, machinery, technology, skills—to produce the things they need Since the capital that can be squeezed from their own economies, even under semi authoritarian rule, is limited, Latin Americans have in the past looked elsewhere for additional resources Into the 1940s, they relied principally on private foreign investment After World War II, attention turned to public capital—that is, loans and grants from developed nations and international lending institutions Now, largely because of nationalist sentiments, this approach is bemg rejected Useful as it was for Latin American modernization, public capital was resented because of the strings attached, and the flow of such funds, particularly from the United States, is drying up With foreign investment either diminishing or excluded, Latin Americans are looking to mcreased trade for funds Expanded export earnings would provide additional capital without preconditions or onerous interest payments The money could then be utilized as they see fit It seems an ideal solution, and explams the sharpening focus on commerce as a major method of improving living standards Acknowledging this trend, in November Washington issued a list of 27 Latin American products which thereafter would have free access to the U S market The items, beginning with birdseed and including live birds and wood carvings, are relatively minor in hemispheric trade In January, a month before the Caracas meeting, 17 more entries were added, all of them fish or fish products Despite the minor commercial importance of the specified goods, the two moves were generally applauded as steps in the right duection Unfortunately, some of the beneficial effects were vitiated when it was realized that the President's proposals on the Trade Act of 1969, also sent to Congress in November, made no explicit references to South and Central America He did call for a "serious and sustained effort to reduce non-tariff trade barriers," and ask authority to make "modest reductions" in U S tariffs But this, apparently, was not what the Latin Americans had in mind The problem is that, with certain exceptions, their desires for greater exports conflict with the interests of U S producers Since 1958, the petroleum industry has been able to limit the importation of cheaper Venezuelan crude oil A "voluntary" quota system has been applied to meet imports from Mexico and Central America (fresh and even salted beef from Argentina is banned by sanitary regulations, due to the presence of hoof and mouth disease m some Argentine provinces), while sugar is allowed into the States only after domestic growers have been given the opportunity to market their yield In the case of manufactured goods—woolens, cottons, shoes, and even some metal products that the larger nations are increasingly bringing out—the pressure against imports has always been strong As the declining U S economy causes mcreased unemployment, the pressure is expected to intensify Latin Americans fear that the Administration, even if it is wholeheartedly committeed to a more liberal trade policy, will not make the necessary fight in Congress to overcome this opposition They note, for example, that in the fixing ot U S meat import quotas for 1970, Mexico and Central America were given only slight mcreases although high prices are outraging housewives across the nation Mexico was also perturbed at a rumored order (never actually signed) placing new restrictions on its exports of wmter vegetables And Brazil, as well as the other 13 coffee-producing countries, was alarmed at renewed talk of a higher U S tariff on soluble coffee Among the proposals put forward to avoid head-on conflicts m hemispheric trade, one in particular has gained growmg acceptance It recommends that Latin Amencan producers be given a share m the growth component of the Northern market In other words, as the demand for certain goods in the States spirals upward, Latin America could count on an expanding market, without direct damage to existing U S vested interests A reversal of this idea, m a corollary suggestion, holds that when U S products harm the sale of Latin Amencan goods, the affected country should receive compensation By early last month, then, the mood m Latin Amenca was one of restless expectation, if not impatience At the Caracas meeting, Assistant Secretary of State Charles A Meyer—m overall charge of hemispheric affairs—faced a critical audience Unable to proclaim any strikmg new initiative, he concentrated instead on explaining and elaborating those previously announced by the President Much of the discussion, m fact, concerned the details of the new inter-American committee for consultation on trade and transportation matters In the end it was agreed that the committee should consist of representatives on the ministerial level, but the Latin Americans wished to give them rather more power than Washington deemed practicable Nevertheless, the committee is expected to serve as a continuing and reasonably effective sounding board for complaints against the United States In addition, Meyer made it known there would be a further loosening of restrictions on the use ot U S credits Ten per cent of certain loan funds, he said, may now be utilized for purchasing products supplied by non-Western Hemisphere sources Welcome as this move is however, one aid law requirement continues to rankle countries with maritime fleets of then-own 50 per cent of all goods purchased from the States under aid agreements must be shipped in U S vessels The Assistant Secretary also read to the ia-ecosoc gathering a special message from Nixon The President disclosed that he was asking Congress for $556 million in aid for Latin America in fiscal 1971, a figure 20 per cent above the 1970 appropriation And he was calling, he said, for a $206-railhon increase in the U S capital subscription to the Inter-American Development Bank, as well as $540 million in contingency funds, of which a substantial part would be available to the Bank The budget proposals themselves, it was stressed, also provided for a number of new programs in Latm America Tentative allocations included $30 million for development of Latin American secunties markets (following up a suggestion by the President last October), $20 million for tourist facility credits, $20 million for the transfer of scientific information (in keeping with an earlier promise), and $15 million for trade expansion Nixon's communication was received politely, but with little enthusiasm As some delegations pointed out privately, there is no guarantee that Congress will approve the requests at the recommended levels The foreign aid proposal for fiscal 1970, they point out, was slashed nearly 40 per cent, making it the lowest m recent history Thus, while Latin Amenca has traditionally fared better in U S aid than other regions, some 1971 cuts by Congress appear inevitable It is even feared that public assistance could be substantially lower than 1970, without compensation in the form of expanded trade The feeling of many delegates at Caracas was perhaps best expressed by an Argentine who was quoted as saying "We will see in a year The trade negotiations and the next foreign aid appropriations bill will tell " New York Times correspondent Juan de Oms concluded that the meeting's most important consequence has been to give the Nixon Administration additional time in the pursuit of a greater degree of understanding with Latin Amenca Yet as he also observed, substantial domestic barriers remain in the path ot that goal In the final analysis, it is clear that despite the President's statements and the Rockefeller report, the Administration has still not come to grips with the decisive problem of hemisphenc aspirations That it has moved in some areas of key concern is indisputable, but it is doubtful whether these measures will be sufficient to provide the necessary capital for Latm Amenca's growth The prospect is for a widening of the hemispheric division between north and south made evident almost 12 years ago, when the U S Vice President—Richard Nrxon?was attacked in Caracas...