Foreign Relations of the United States, 1955–1957, American Republics: Central and South America, Volume VII

247. Memorandum From Viron P. Vaky of the Office of South American Affairs to the Assistant Secretary of State for Inter-American Affairs (Rubottom)¹

Washington, December 16, 1957.

SUBJECT

• US-Argentine Relations

The attached paper attempts to give some thought to our relations with Argentina. It poses two premises—a) that the establishment of good relations with Argentina should be one of the most important objectives of our Latin American policy, and b) that considering the advances we have made in this regard and the fact that the present climate is very propitious for this, we must take action now to nail this advantage down and consolidate a tradition of cooperation with Argentina.

The suggested courses of action to reach these objectives are general and cover both long and short range steps. For summary purposes, however, the actions which we can and should take immediately are:

1. Urge immediate consideration, and extension where indicated, of additional financial assistance, specifically in transportation and possibly the Rio Turbio coal project. High priority should be given to this.

2. Seek expeditious resolution of the two small, but very irritating problems of CAB approval for the private Transcontinental airline and waiver of PR 17.²

3. Should the Argentines indicate a desire to continue PL 480 discussions if they can achieve an increase in the amount of cotton offered, urgently and strongly fight for that increase.

4. Be prepared to move expeditiously and soundly on requests for technical assistance projects which are expected very shortly.

5. Seek to improve the quality of and extent of exchange of persons.

6. Give immediate consideration and planning to possibility of a presidential visit next year, and possibly some interim visits of key personalities such as the Foreign Minister if this can be arranged.

[Attachment]

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ARGENTINE-US RELATIONS

This paper poses certain considerations with respect to our policy toward Argentina and suggests certain courses of action in the light thereof.

I. Policy Goals

It is recognized that in the past certain historical and economic factors have tended to prevent close US-Argentine collaboration. These antedated Peron, and will almost certainly continue to exert their influence for some time to come. Geographically and historically, Argentina has been isolated and isolationist. Placed outside the main currents of world events and crises, and richly endowed with natural agricultural wealth, Argentina has tended to be a nationalistic and egocentric nation, covetous of Latin American leadership but chary of assumption of complementary international responsibilities which do not directly serve her own interests. The US and Argentina have parallel and competitive agricultural export economies, and this factor has naturally provided irritants in relations between the two nations. Most recently, the pro-Axis orientation of the Argentine Government during World War II and the rabid anti-US policy of Peron during most of his regime clouded US-Argentine relations.

Conceding the above, the US still has very compelling reasons affirmatively to seek to maintain and improve the present state of friendly relations between the two countries.:

1) By virtually any criteria—size, strategic location, population, cultural level, resources—Argentina is one of the most important of the Latin American countries. On this ground alone, developing good relations with Argentina would be in the interest of the US.

2) By virtue of its importance in Latin America, US-Argentine accommodation is important to hemispheric solidarity;

3) In the face of the East-West conflict, US-Argentine interests coincide far more than they clash. Conversely, Argentina would represent a tempting target for Soviet penetration.

4) The US would stand to suffer tangible loss of valuable Argentine support in the United Nations and the OAS from any retrogression in relations.

5) Argentina’s geographical position and agricultural resources would be of critical importance in the event of another world conflict.

Additional compelling considerations arise from the present situation in Argentina. The present climate is most propitious for improved relations with us. The Government seems sincerely desirous of a closer orientation toward the US, and the receptivity for such an orientation among the general public and political leaders is warmer than in many, many years. The present leadership is trying with some success to lead Argentina out of isolationism in international policy and, with less success, away from economic statism. The period is certainly one of transition and the US is presented with a rare, but passing opportunity to influence attitudes and thoughts and to establish a firm tradition of cooperation such as we have not enjoyed with Argentina in recent history.

In these circumstances, it is in the US interest 1) to strengthen the tendencies now evident of pro-US, pro-West, moderate democratic policies and the elements advocating them by strengthening friendly relations with the present regime and extending constructive assistance to it in meeting the immediate and serious problems it faces; 2) to demonstrate to the Argentine political leaders and the people the value of cooperation with us and 3) to firm up these tendencies and build a tradition of co-operation which would be difficult to reverse and thus lessen the danger of a later shift of political policy to an anti-US orientation.

I submit that given the present opportunities, the attempt to create such a relationship with Argentina should be one of our most important goals in our Latin American policy.

II. Present Situation

The following factors appear to characterize the recent situation in Argentina in the status of US-Argentine relations:

1) As indicated the present leadership is as sincerely pro-US as any in recent history. It is frankly friendly to us and has turned to us for assistance in meeting problems. It desires to cooperate with us.

2) Military leaders in important command posts in all three services are friendly to the US and disposed to a policy of cooperation with us. Interestingly enough some of the more realistic thinking going on in Argentina about Argentina’s problems is centered in the military rather than among the “politicos”.

3) There is a remarkably widespread public acceptance of the notion that closer ties with the US are desirable, although sensitivity to the terms under which such ties should be established is also widespread.

4) The Provisional Government has sought to move Argentina out of its traditional neutralism. Argentina has in fact begun to play a more affirmative role in international organizations, ratified many international pacts and otherwise started to swing away from neutralism. The Government has also sought to move toward freer economic policies. These trends have been acquiesced in by the public.

5) Such trends however, can hardly be said to have hardened into a firm orientation. Given the imbedded tradition of isolationism and neutralism it is quite possible that these could be reversed.

6) As Ambassador Beaulac has pointed out, no significant party or political leader has embarked on any anti-US campaign in the present electoral period, although it would have been easy to do. There has been much talk about economic imperialism and exploitation of natural resources, but this has been largely in an introverted Argentine context. Such “mystiques” have not been identified with US policy as they might well have been. The result is that there has been no anti-US sentiment whipped up and no apparent inclination to do so for political gain.

7) The Provisional Government has shown extreme sensitivity to its status as a de facto government and has considered itself unable to make many basic decisions which would have been fundamental in determining Argentina’s future orientation. These are being passed on to the elected government for decision.

Most of them will by May have become more acute than they are now. The elected Government will have to face up to them and cannot evade that responsibility as did the present regime by claiming it was de facto. Therefore, Argentina will, in a very real sense, be at something of a cross-roads after May 1.

It is probable that any government likely to be elected will be more “political” than the present government, more sensitive to the old traditions, probably more nationalistic at least in economic policies. It is likely also to be less affirmatively friendly to the US, and more inclined to examine critically any relationship to us. However, whatever may be the sentiments of the leaders of any elected government as regards the US, it is certain that they cannot ignore their country. Consequently, almost the first task of the new government will be, of necessity, to reassess Argentina’s relationship to us in the light of their problems and needs, and to decide on economic and international policy orientation (which itself affects Argentina’s relationship to us). Therefore the extent to which their judgments as to the value of cooperation with this country may be influenced either now or in the future becomes very important.

The deteriorating economic situation will clearly be the most significant problem the new government will have to face. Due to the criticalness of the economic situation the new government will have to show some results and will not be able to temporize or muddle through for long. Its choices will be few—either it swings toward freer economic policies including greater utilization of the resources of private foreign capital or it will try to swing left toward greater controls and statism. It will be a painful dilemma, given the mystiques imbedded in the Argentine psychology. We may be sure that the Communists will try and influence that decision, primarily through exploitation of domestic issues by the native Party, and possibly through an economic offensive designed to give the Government an “out” from this dilemma and increase economic orientation toward the Bloc. Opinions will differ as to the probability of such an eventuality as the latter point, but it seems to me we cannot deny Soviet capability of launching such an offensive if it wants to nor dare we ignore the possibility that it may want to.

If this is so, we can well ask, given the short time remaining for the Provisional Government, why we should not back off, wait and see what type of government is elected and be prepared at a later time to step in with help and try and influence the new government.

The answer to such a question, I strongly believe is that it is essential for the US to maintain a frankly friendly policy toward the present regime and to continue, and indeed increase to the extent possible, tangible help and gestures of support. In fact I believe it is particularly important to do this at the present time despite the limited tenure of the Provisional Government. This is so because:

1) The Provisional Government is committed to a pro-US orientation and is identified in the public mind with such an orientation. It has sought our assistance and is likewise identified in the public mind with such a seeking. It has favored, at least publicly, moderate democratic policies similar to those we would like to see developed. However ineptly it may have done this and however limited its success, it again is associated in the public mind with such policies. It can fairly be assumed that the reaction of the US to all these factors particularly in terms of what we do with regard to Argentine problems, is being closely watched by political and military leaders and the public in general. To a real degree future judgments that may be taken by a new government are already being influenced by present events. It might be said in short, that what we do now will have an important effect on the new government by example.

2) We should continue our support of the Provisional Government in order to maintain the cooperative feeling that has already developed (this is important) and to solidify it as much as possible. The more that is done now and the longer the experience of friendship and cooperation the more difficult it will be to reverse. Although the remaining tenure of the Provisional Government is short, now is the time to “nail down” to the extent possible this “tradition” of cooperation and support, simply because this is the most propitious climate. Despite the few months that remain before May 1, much of significance can be done. For example, sound beginning to implementation of the technical assistance agreement, possible further gestures of support in the financial field, waiver of PR 17 and similar items.

3) Given the fact that the Government is frankly desirous of our continued support and aid—probably as much in the next few months as it has been previously—a continued policy of open and frank support will strengthen the future posture and influence of those elements which advocate and wish to see a pro-US orientation. Even though recent Government leaders have disqualified themselves from participation in the next government, they will undoubtedly have considerable influence on the political scene. Aramburu, for example, may become something of an elder statesman. To the extent that they will have influence, the more they will have been able to demonstrate the wisdom of cooperating with us and adopting moderate policies the stronger will be their arguments for continued orientation of this type. This is true also of those political leaders and sectors which are disposed to and advocate cooperation with us. This argument applies with special force, however, to military leaders who are favorably disposed toward this policy and who will continue in power. The military will continue to exercise important political influence. Virtually any government which may be elected will have to obtain military support, and the more controversial the government the more necessary such support. Therefore the more such military leaders are convinced of the necessity of a pro-US, moderate, democratic political and economic policy, the less danger there is of a shift to an anti-US, nationalistic orientation.

4) In the same view, to slacken our support now (i.e. to decline for tactical reasons to do things it is in our power to do) and then to move in again later to try and influence the new government and prevent an unfavorable shift in policy, is likely to encourage a cynical judgment of the value of working with us. That is to say, political elements will be encouraged to conclude that we react better against threats of what might happen if we do not help than to positive sincere attempts to follow moderate policies, and that protestations of friendship need only be tactical.

III. Course of Action

If all the above is true, the next question is what can we do to achieve our objectives. The following are suggested courses by specific operational area:

A. Psychological. The Argentines are a peculiarly sensitive, egocentric and to some degree naive people. I know of few countries where the psychological element is as important as here, that is to say the tactics, the appearance, the manner in which dealings take place. The Argentines attach a great deal of importance to these matters. In the present context, the Provisional Government attaches considerable importance to expressions of support for it and in particular is anxious for signs of approbation, support and friendship from the US. We should not underestimate the value of this element in our developing relations. There are several ways of doing something—or not doing it—and it will repay us to take pains in how matters are handled. While we may be limited in the amount of tangible assistance we can extend, we can do something about the psychological element.

There are concrete examples of this. On the positive side, the USAF participation in Argentine Aviation Week was a very effective psychological operation.⁴ On the negative side, our handling of four problems to which the Argentines attach importance—tung oil, request for PL 480 cotton, CAB approval of Transcontinental schedules to the US, and request for a PR 17 waiver—has not been such as to create confidence in our announced intentions of cooperating with Argentina. Delays in these matters may perhaps have been unavoidable, and they are mentioned here merely to emphasize why we should be alert to avoiding a poor psychological effect to the extent that we can.

The considerations posed here would apply not only to our dealings on individual problems, but to such things as exchange of persons programs, and protocol visits as well. Specific policy guides in this operational area are suggested as follows:

1) Maintain an attitude of frank, sympathetic friendliness in the discussion of all political and economic issues which may arise; and avoid unexpected unilateral action to the maximum degree possible, emphasizing a consultative approach, and thus cushion any unavoidable blows.

2) Handle Argentine requests in various fields with promptness and tactfulness. Where necessary refuse requests, do so with a maximum of tactful consideration and based upon sound explicable reasons. Now specifically, seek expeditious resolution of the Transcontinental and PR 17 problems.

3) To the extent that regional considerations will permit, accede to the Argentine desire for prestige in international organizations and support Argentine international candidacies.

4) Promote the exchange-of-persons program in both directions to the maximum extent possible.

5) Capitalize on the importance Argentines give to personal relationships by extending to highly-placed Argentine officials all available protocolary and personal courtesies. Consider, as factors will permit, arranging for visits to this country of strategically placed and influential Argentines. Now specifically, consider the feasibility of a presidential visit next year.

B. Economic. The economic sector is clearly the most critical area of our relations. The need for external assistance is clear, as is the Argentine aspiration for help from us. This is also a field in which it would appear that we could extend additional help. It is not suggested that anything we could possibly do would solve Argentine economic difficulties. However where there are sound projects for which debt servicing capacity and our own over all loan policy would not preclude our assistance, it seems to me we should meet these requests. Aside from the intrinsic economic aid this would mean, the moral and psychological support it would imply, would seem of prime importance as outlined above. I believe, moreover, that these questions deserve a high priority, and I strongly concur with the recommendations of Ambassador Beaulac in his cable 890.⁵

In addition to financial aid, US interests would also indicate the importance of avoiding US actions adverse to Argentine economic interests to the maximum degree possible, such as trade restrictions.

Specific policy guides in this operational area suggested as follows:

1) Support and urge consideration of, and extension where economically indicated, of financial assistance to projects of US and Argentine interests, with due regard to Argentine progress on economic policy and problems affecting US interests. Now specifically, undertake immediate study of this matter based upon Ambassador Beaulac’s cable.

2) Seek to avoid new, and if possible remove old, restrictions on the importation into the US of Argentine commodities.

3) Conduct the PL 480 program with due regard for avoiding displacement of Argentine marketing of affected products; and consult as promptly and fully as possible in connection with prospective transactions.

4) Encourage investment of US private capital in constructive Argentine ventures on mutually satisfactory terms.

5) Receive sympathetically and endeavor to meet any reasonable Argentine request for special economic assistance, as, for example, requests to purchase US surplus commodities. Now specifically, be prepared to meet any Argentine request for cotton.

6) Be alert to the development of a sound and productive technical assistance program, taking especial care to demonstrate to the Argentines the value of such assistance.

7) Encourage in appropriate fashion, as we have in the past, Argentine cooperation in achievement of Battle Act objectives, and discourage receptivity to Soviet offers of technical and economic assistance.

C. Military. The important and politically influential role which the military may be expected to play has been referred to above. Considering the fact that the Army particularly had in the past been the depository of much rabid nationalism and totalitarian feelings, and the present apparent disposition to orient toward the US, it seems highly important that we not miss this opportunity to make our influence felt among these leaders.

We should be alert to all appropriate means of encouraging cooperation and friendship toward the US, such as training Argentine officers, protocol visits and similar items. Where the Argentines take the initiative in seeking to formalize such cooperation, as in mission agreements or a bilateral agreement, we should take advantage of that barring any over riding political risk. In the case of a bilateral, should the Argentines again request one we would find it difficult to refuse having already negotiated bilaterals with some of Argentina’s neighbors. In such eventuality however, it would be essential to give the Argentines in advance a realistic and clear understanding of what they may expect, so as to avoid the danger of any illusion that this is a bonanza for military equipment.

Specific policy guides in this area are suggested as follows:

1) Should the Argentines wish at some later date to negotiate a formal bilateral military agreement, be prepared to move in that direction, but with clear prior understanding by all parties as to what may be expected from such an agreement.

2) Stand ready to respond sympathetically to any Argentine overtures for other forms of military cooperation of less-than-pact nature, such as service missions and training of military officers.

D. Political The present attitude of both Governments would seem to minimize problems in this area. One possibility of future trouble worthy of mention however, could be the Antarctic issue. There is probably no issue in which the US could get in hot water faster than than on this issue if maladroitly handled.

Specific policy guides in this area are suggested as follows:

1. Utilize consultative approaches wherever possible in discussions of political issues, particularly in such matters as that reflected in conflicting Antarctic claims.

2. Tactfully and as appropriate opportunity offers, seek to stimulate the awareness of the Communist danger and to encourage continuance of the present anti-Communist orientation of the country; and correlatively, seek to encourage Argentina in its more affirmative orientation toward the West.

3. Seek to encourage and have continued Argentina’s more positive participation in international organizations. (See also A-3, above).

IV. Recommendations

A. I recommend that we give immediate thought to what our overall approach to Argentina should be in the next year or two, to the extent that this is practicable. I believe it important for us to formulate consciously and concretely specific coordinated guide-posts or “plan” and to avoid to the extent we can handling our relations with Argentina on an “ad hoc” basis.

B. In this connection, I recommend that we give high priority to immediate consideration of what steps we might take in the financial field, and that Ambassador Beaulac’s recommendation (Embtel 890) be a point of departure for this. If we are able to do anything at all we here should do it very soon.⁶

1. Source: Department of State, Central Files, 611.35/12–1657. Confidential
2. Public Resolution 17, enacted by the 73d Congress on March 26, 1934, required that U.S. Government-financed cargoes must be shipped in 100 percent U.S. bottoms, but that this requirement might be waived in certain cases. For text, see 48 Stat. 500.
3. Drafted by Vaky.
4. Documentation is in Department of State, Central Files 711.5835 and 835.424.
5. In telegram 890, December 9, Beaulac recommended the following: “In circumstances and as gesture our willingness continue economic cooperation with Argentina, I suggest EXIM Bank give consideration to prompt announcement decision to send group to study possible credit for Rio Turbio coal mines as requested by Argentina. Assume in this connection would assure itself Argentina would welcome such study.” (Ibid., 103–XMB/12–957)

6. A handwritten comment on the source text by Rubottom reads: “An excellent memo. Thanks.”

   On January 27, 1958, Rubottom forwarded this paper to Acting Secretary Herter with a brief covering note summarizing its major conclusion. (Ibid., 611.35/1–2758)