835.24/602: Telegram

The Ambassador in Argentina (Armour) to the Secretary of State

1115. Department’s instruction of May 1589 calling for reports on Argentine essential requirements for 1943 of 173 products or groups of products. Iron and steel report is required by July 18 and others by September 1st. The Department is aware that the Argentine Government, through the Central Bank, has cooperated in the preparation of all requirements reports and its further cooperation is essential in this undertaking. However, I feel that this is not an appropriate time to ask the Argentine Government to collaborate in the preparation of the number and type of reports called for by these instructions. For several months the Argentine Central Bank has employed a minimum of 30 to 40 people, on requirements studies requested by our Government. To date they have prepared 46 reports. Unfortunately, export licenses for Argentina have not been granted on the basis, either of their recommendation or of those of the Embassy nor have their certificates of necessity brought anticipated results. Consequently to ask the Argentine Government for these additional reports could not be other than embarrassing. Moreover, I feel that the entire problem is complicated by reason of the necessity of considering the ultimate use as of primary importance. I realize that this cannot be avoided. However, the principal criteria for end-use of any given material seem to be (1) contribution to the [Page 360]war effort and, (2) effect upon the national economy of the importing country. For practical purposes I feel that with very few exceptions, for example tungsten mining and possibly some of the work of the frigoríficos, Argentina makes no contribution to the war effort. This leaves national economy as the basic consideration. While realizing that to allow the exportation of material from the United States to Argentina for a use prohibited in the United States carries both substantial political and economic considerations, I feel that the fundamental differences, particularly now, of the economies of the two countries must not be disregarded.

If it were possible for the United States to let the Argentine Government exercise that control, subject only to general limitations, which I feel it would be glad to meet, the import requirements studies would be simple, accurate and practicable. Once the requirements were estimated and allocation made, control of allocation would still be exercised both as regards the Proclaimed List or suspect consignees, and as regards any preference which might be given to local entities such as Caporypf.

I realize that this suggestion requires a determination of policy, but I feel very strongly that this should be taken now rather than to continue as at present. Our further insistence upon detailed statistical studies, followed by unsatisfactory results, is increasingly irritating to the Argentine Government and, I might add, to the Argentine people. In fact I believe that if the Department feels that no consideration can now be given to making the Argentine Government primarily responsible for use-distribution of allocated materials, it would be better if the entire allocation system were abandoned for Argentina and if every order were simply made subject to individual export license, with the understanding that Embassy’s approval would be obtained for other than supply and use factors. While this system would not be entirely unsatisfactory, it should at least serve a dual purpose. Argentina would be made to realize that hers is a particular case as compared with other hemisphere countries, and the United States could not be accused of not attempting to fulfill implied obligations.

Armour
  1. Not printed.