March 28, 1973
Page 9975
U.S.-LATIN AMERICAN RELATIONS
Mr. MUSKIE. Mr. President, I have been increasingly concerned in recent years by a deterioration in U.S.-Latin American relations. U.S. policy – or non-policy – has verged on indifference. I believe it is time to reassert the best traditions of a good-neighbor policy toward Latin America. The opportunities for strengthening the political and economic ties between our two hemispheres are great. In cooperation with the nations of Latin America, we must come forward with a set of initiatives which will put U.S.-Latin American relations back on a healthy, cooperative path.
Sol Linowitz, former U.S. Ambassador to the Organization of American States, has recently written an article setting out several constructive steps that the United States might take to improve our relations with Latin America. I believe Ambassador Linowitz' article deserves careful study, and I ask unanimous consent that it be printed in the RECORD.
There being no objection, the article was ordered to be printed in the RECORD, as follows:
LOOK, MR. PRESIDENT, LATIN AMERICA IS ON THE MAP, TOO
(By Sol M. Linowitz)
Not long ago the Jornal do Brasil (a not unfriendly Brazilian newspaper) ran a cartoon that shows President Nixon standing before a globe of the earth contemplating Europe, the United States, and Asia. In the next panel, Nixon, crouching down, peers in astonishment at South America and exclaims: "Look, there's a map on the underside, too!"
The cartoon's implications are painfully clear: To Latin Americans, President Nixon is the first U.S. President in this century who has prided himself on his mastery of world affairs, yet has had literally no policy for Latin America. Other Presidents during the past seventy years, whether their goals were regarded as constructive or jingoistic, at least seemed to have some clear idea of what they wanted to accomplish "south of the border." Theodore Roosevelt had his Big Stick and Gunboat policies, replete with territorial-imperative chest pounding. FDR launched the well- meaning, paternalistic Good Neighbor policy. And John F. Kennedy created the Alliance for Progress, which was later furthered by Lyndon B. Johnson. But the Nixon administration has seemed rudderless in this area, and Latin Americans speak bluntly of the Nixon "non-policy" toward Latin America.
Ironically, the relationship between the United States and Latin America inherited by the Nixon administration was basically a healthy, cooperative one.
There were, of course, problems and quarrels. But under the Alliance for Progress, Latin America had managed to achieve an annual average of 2.4 percent real per capita growth. This was exactly one decimal point below target, but far better than might have been expected during the 1960s, when the area's terms of trade and income from export commodities suffered badly. During that decade the United States contributed over $8 billion in bilateral aid and was responsible for much of the $6.5 billion in loans from international institutions such as the World Bank and the Inter-American Development Bank. The Latin Americans themselves, moreover, put up at least 90 percent of the capital required to fuel development and built up a sizable infrastructure of public works projects and social programs.
One of the Alliance's crowning achievements was in export expansion and diversification – which is the critical bone of contention between the United States and Latin America today.
Under the Alliance, Latin America moved away from the wasteful import-substitution policy that had been its mainstay during the 1950s, and concentrated instead on diversifying its exports. However, toward the end of the decade, Latin American leaders realized that further success in this program would require the United States and other countries of the developed world to tear down the trade barriers to Latin American-manufactured exports. It was at this stage that President Nixon stepped onto the scene.
Then came two striking developments in U.S.-Latin American relations: the Rockefeller mission to Latin America and the Latin American meeting that produced the document called the consensus of Vino del Mar.
In late January 1969, Nixon announced that he was sending Gov. Nelson Rockefeller – a former Co-ordinator of Inter-American Affairs, long known for his deep interest in the area – on a fact-finding mission to a dozen Latin American capitals. Rockefeller surrounded himself with highly respected experts from a wide range of disciplines and embarked on a whirlwind tour of Latin America. Some skeptics asked whether still another study was in fact necessary, but when it came out, the Rockefeller report did demonstrate the importance of Latin America for the United States objectives, and recommended significant action. The President accepted the report, and Latin Americans waited to see whether he would act on it.
Meanwhile – at precisely the same time as the Rockefeller mission – there was a meeting of CECLA – the Special Coordinating Committee on Latin America, which consists of all OAS members except the United States. The purpose of the meeting was to coordinate the Latin American position within the Alliance, and the conferees agreed on a statement issued as the consensus of Vino del Mar.
The consensus covered a good deal of ground, ranging from international financing to the transfer of technology and the role of foreign direct investment; and from tariffs and quotas to the prices of commodities on the world markets.
Specifically, it asked that the United States eliminate tariff and non-tariff barriers on goods from the developing world and that it champion Latin exports by helping secure similar treatment for them in other developed markets. The CECLA group also sought greater financial cooperation that would allow recipients of aid to set their own priorities with no strings attached to the foreign aid they received.
Few national leaders in their first year in office have had such clear guides as the consensus and the Rockefeller report by which to formulate a foreign policy for a region. Yet for some inexplicable reason, in the major Latin American policy statement, on October 31, 1969, the President indicated his awareness of the key problems, and then to the great disappointment of Latin Americans did very little about them.
The Nixon proposal for Latin America, as outlined in the October speech, was known as Action for Progress in the Americas; its ideas were meant to be the backbone of the Nixon policy for Latin America. On the face of it, the program seemed to offer highly positive concessions to Latin America in four key areas.
First, with respect to trade preferences, the statement said that the United States would urge other industrialized countries to agree on a uniform, nondiscriminatory system toward developing countries. The system would be very generous, with no ceiling on preferential products that Latin America felt it could sell to the United States; and the United States would be prepared to go ahead with preferences for Latin America on a number of products if Europe and Japan could not be persuaded to go along on a more general trade preference for all developing countries.
A second point was the untying of U.S. AID (Agency for International Development) loans. It was emphasized in the policy statement as a significant step forward. What was not underscored was the fact that while AID recipients would no longer be tied to U.S. sources alone, they would be free to purchase manufactured imports with AID funds only from sources within Latin America.
A third and slightly related point was the promise to move toward increased multilateralization of U. S. aid for Latin America.
The program's last key point concerned the need to "deal realistically with governments in the inter-American system as they are." The President conceded that each nation had a right to decide whether or not it wanted foreign private investment. Without threatening countries that might choose the path of expropriation, the President quietly warned that such action might seriously affect investor confidence.
Latin Americans accepted these key policy positions with a sense of hope, which has over the months turned to cynicism and disillusionment.
One major setback to Latin American confidence in the new program came on August 15, 1971, when the Nixon new economic game was announced. The plan placed a 10 percent surcharge on imports to protect the U.S. balance of payments, and Latin America found itself lumped in with the other exporting areas. Many commodities that make up the bulk of Latin American exports were excluded, and White House spokesmen pointed out that only 22 percent of Latin American exports would be affected by the surcharge. However, they missed two important points that did not escape Latin Americans: First, the exports affected were fast-growing manufactured products, which Latin producers had worked long years to be able to manufacture for successful marketing in the United States. Second, Latin America's dollar-trade deficit with the United States had exceeded a billion dollars the previous year; and Latin Americans understandably felt that they should not be penalized in the same category as the European, Japanese, and other exporters who had contributed to the balance of payments predicament of the United States.
Quite clearly, the President had missed an extraordinary opportunity. He could have said he recognized that Latin America was not a factor in U.S. economic problems and could have absolved the area from the added burden of the surtax. Having failed to do so, however, he could no longer blame a protectionist Congress (as his administration had been doing) for the failure to live up to his commitment on trade preferences for Latin America.
The predictable result was to unite Latin America firmly against the United States. Even such strange bedfellows as Brazil and Chile were able to get together with other Latin American countries in an emergency CECLA meeting in Buenos Aires that condemned the U.S. action and explored possible sanctions against the United States. A belated decision (made after the CECLA affair) to roll back the 10 percent AID cut failed to overcome the resentment and hostility that had been aroused.
The promised multilateralization of aid also proved to be a disappointment to the Latin Americans. At the beginning of last year, President Nixon issued a statement that appeared to increase politicization of multilateral aid channeled through the Inter-American Development Bank and the World Bank. He warned that all U.S. aid – including that funneled through multilateral institutions – would, in the absence of special circumstances, be cut off from countries that expropriated U.S. investments without prompt and adequate compensation.
Other statements exacerbated the situation. While still secretary of the treasury, John Connally stated in an interview: "The United States can afford to be tough with Latin Americans because we have no friends left there anymore." Later, as good-will ambassador to Latin America, Connally warned Venezuelans that "the United States has the power to export prosperity or poverty to any country in the world to which it chooses to do so."
Against this background it is quite clear that the Nixon non-policy toward Latin America has had one effect: It has united Latin America in opposition toward the United States and its surrogates – the hundreds of subsidiaries of U.S. corporations spread throughout the region. On other issues it has helped set Latin American leaders against each other in their efforts to vie for leadership of the region precisely at the time when the nations of Latin America should be working solidly together for development of the continent.
Neither the United States nor U.S. private investment in the area has benefitted from this non-policy toward Latin America. Therefore, what we now need – and need badly – is a cohesive policy for Latin America that will take into account the hemisphere's special requirements and desires. And this challenge presents the new Nixon administration with an extraordinary opportunity at a pivotal moment.
What should be the ingredients of such a policy? Here are a few suggestions:
1. Define U.S. goals in the hemisphere, and spell out just as clearly what the United States expects of others. Then stick to these commitments.
There is no need of studies and analysts that make clear what our approach should be and how we should go about it. What we need – and desperately – is to recognize that clarity, like charity, must begin at home. To talk about "partnership" at a time when there is not even a constructive dialogue is neither realistic nor constructive. To be effective, a partnership must begin at the top – with the President. There must also be a genuine commitment on the part of the President, which in turn is reflected throughout the administration.
2. Move the Alliance for Progress toward a second stage, in which it would really be directed on a multilateral basis, with goals mutually defined.
We have long since passed the time when the United States can attempt to direct the destiny of Latin America. It is now necessary for all sides to participate in setting up goals and guideposts.
The consensus of Vino del Mar and the recommendations of the Rockefeller commission can be important guides in establishing common objectives. The United States should indicate its readiness to join in developing such common goals.
3. Use existing inter-American institutions to conduct as much of our governmental business with Latin America as possible.
The OAS and the Inter-American Development Bank are two established organizations in which the United States can place its trust in dealing with the area. Both are staffed with dedicated international civil servants who are seeking to develop the region and who can speak both the language of the United States and that of Latin America. We should make clear our confidence in, and respect for, such inter-American institutions.
4. Once the United States has agreed to the principle of multilateralism, we should assure that decisions with respect to multilateral aid are truly multilateral.
As is true with any corporate board of directors, the role of the board of a multinational institution is to set overall standards and leave everyday management to the professional managerial staff. The same should apply in the case of international lending institutions. It would be helpful in this regard if Japan, European countries, and others were to join such institutions as the Inter-American Development Bank in order to assure that they are truly multilateral and not dominated by the political influence, express or implied, of the United States.
5. Open up the U.S. market to Latin American products to the greatest extent possible and in a way that will truly benefit inter-hemispheric trade.
One idea worth exploration would be for the United States to allow Latin American products to come in free of all duties and quotas to the extent of the almost 82 billion trade surplus it has with the region. There is no reason why a nation as powerful as the United States must make its mark at the expense of its developing neighbors. To make the formula more acceptable to Congress, the United States could insist that Latin nations reduce their barriers against U.S. exports to the degree they benefit from increased exports to the United States.
6. Help rekindle the fire of economic integration.
During the first eight or nine years, regional integration worked well, but it has since been stymied in its growth. Both LAFTA (Latin American Free Trade Association), which includes all of South America plus Mexico, and the Central American Common Market have run into difficult times. At the presidents' summit meeting in April 1967, a Latin American common market was the leading item on the agenda. The United States could help revive interest in it by offering to become a nonreciprocal member – which would open up its markets – but not insist on the same from Latin Americans. A major market outside the area could be the stimulus that regional integration needs to set its export goals high and to develop the way to reach them.
7. Make clear the nature of the relationship between the U.S. government and Latin American subsidiaries of U.S. parent companies.
If the U.S. government has a responsibility for helping American companies in conflict with foreign governments, then it must also be prepared to be responsible for companies that conduct themselves badly in a particular country. The United States could insist that American companies follow a specific code of conduct of responsible international companies that would state what rights companies should be able to expect when dealing internationally, and what duties to the host country they have in return. If a U.S. company is wronged under such a code, then the U.S. government could, in good conscience, step in to make this known to an international tribunal, while avoiding any unilateral action.
8. Accept the idea that Latin American countries – like other countries of the world – have the freedom to determine their own political, social, and economic systems on behalf of Latin Americans and in a Latin American way.
The United States must learn to understand and accept the fact that differences exist among people and their ways of looking at things. And it must learn to adapt to these systems when they pose no intrinsic danger to the United States, and to avoid hostile knee-jerk reaction when disagreement occurs.
There is, of course, no guarantee that such policies will entirely abate hostility and tension. But they could begin to change the climate and move us back to a spirit of cooperation, rather than conflict. The need has never been greater, both in our own interest and in the interest of hemispheric progress and world peace.