Foreign Relations of the United States, 1950, The United Nations; The Western Hemisphere, Volume II

365/6–2050

The Chairman of the United States Delegation to the Special Meeting of the Inter-American Economic and Social Council (Miller) to the Secretary of State

confidential

Washington, June 20, 1950.

Inter-American Economic and Social Council Special Meeting, March 20–April 10, 1950

Dear Mr. Secretary: I have the honor to submit the confidential report¹ of the United States Delegation to the Special Meeting of the Inter-American Economic and Social Council which convened in Washington on March 20, 1950 and adjourned on April 10, 1950.

This was the first Special Meeting of the Inter-American Economic and Social Council. Henceforth, these Special Meetings will be held annually. They were provided for in the Council’s statutes in the hope that they would stimulate the interest of the member countries in the Council’s work and make its activities more effective. This hope appears justified, if the results of the first Special Meeting, which although not spectacular were highly satisfactory, can be taken as a valid criterion.

There were four items on the agenda of the Special Meeting, namely:

1. Consideration of the Preparatory Work for the Inter-American Economic Conference and Decision on the Future Action of the Council in this Regard.

2. Reservations to the Economic Agreement of Bogotá.²

3. Technical Assistance Program.

4. Economic Effects of Currency Devaluation.

Four committees (A, B, C and D) were set up to consider these agenda items.

Committee A, which addressed itself to agenda item 1, considered several reports³ prepared by the Inter-American Economic and Social Council pursuant to resolutions adopted at the Ninth International Conference of American States at Bogota. These reports consisted of the following:

1. Report on the proposed creation of an Inter-American Institute of Immigration.

2. Study of the possibility and advisability of creating an Inter-American Bank or an Inter-American Development Corporation, or Both.

3. Report on the proposal for the creation of an Inter-American Institute of Commerce.

4. The Commercial Credit Policy of the American States.

5. Report on Economic Conditions and Problems of Development in Latin America.

The Committee agreed⁴ with the reports’ negative findings with regard to the establishment of an Inter-American Institute of Immigration, an Inter-American Bank, an Inter-American Development Corporation, and an Inter-American Institute of Commerce. It likewise agreed with the conclusion reached in the report on the “Commercial Credit Policy of the American States” that the principal obstacle to the granting of more favorable credit terms in inter-American trade was the existing disequilibria in the payment balances of most Latin American countries rather than any lack of credit facilities.

With regard to the report entitled “Economic Conditions and Problems of Development in Latin America” which contained a number of conclusions with which we disagreed,⁵ Committee A found that while it constituted a noteworthy effort it was not sufficiently complete to provide any definite orientation and that considerable further study of this important subject was required.

The action taken by the Committee in these matters was entirely in accord with the position of our Delegation.

With respect to the Inter-American Economic Conference (Buenos Aires Conference), Committee A resolved that the Inter-American Economic and Social Council give this matter further consideration at its regular sessions and that the advisability of holding the conference be further discussed at the next Special Meeting. This is tantamount to an indefinite postponement and while the United States Delegation would have preferred a resolution abandoning the idea entirely,⁶ it now seems improbable that the Conference will be held, at least within any presently measurable period.

Committee B dealt with the most difficult agenda item, namely, the reservations to the Economic Agreement of Bogotá.

While the United States Delegation did not deviate from its official position with regard to the reservations, which made the Agreement unacceptable to the United States⁷ and had prevented its submittal to Congress for ratification, it did not attempt to impose our views on the other delegations. In refraining from pressing too strongly for acceptance of the United States position, the United States Delegation was guided by the following considerations: 1) the growing feeling within our Government that the Agreement was not too suitable an instrument and that our economic problems with the countries of Latin America could be more satisfactorily resolved by bilateral treaties such as the one recently concluded with Uruguay,⁸ and 2) the increasing opposition to the Agreement on the part of a number of leading United States business groups which made its ratification (even without reservations) highly problematical.

The absence of any pressure tactics on our part was generally well received although a few delegations appeared disappointed over our failure to take a more aggressive stand. On the other hand, the Guatemalans, Mexicans and Venezuelans, who were unable to agree with our views on the investment provisions of the Agreement found our attitude highly gratifying. They had from the outset shown concern over the possibility of finding themselves isolated in the event that a move to reach an agreement among the sixteen or seventeen countries disposed to accept our position were to gain momentum.

The fact that the majority of the delegations were in favor of the Agreement and of eliminating the objectionable reservations is difficult to explain considering that only two countries (Costa Rica and Honduras) had ratified the Agreement and that the others had shown little or no interest in it. It is possible that they sensed the United States was not overly interested in the Agreement and that this may have led them to believe it was more advantageous to them than they had previously thought. Some of the delegations doubtless assumed that the Agreement was a prerequisite to the extension of wide-scale United States technical assistance and to the proposed Export-Import Bank guarantees on new private United States investments abroad. A few countries may have felt that if the Agreement became effective, it would obviate the need for bilateral treaties which in their opinion might be less desirable from a political viewpoint. In the case of a few countries, notably Panama, their interest in the Agreement centered around Article 38 which, in accordance with their interpretation, would permit economic disputes to be submitted to the Organization of American States instead of being handled through regular diplomatic channels.

Although a wide area of agreement was reached, it was not possible to eliminate all the objectionable reservations. Committee B therefore referred the problem back to the Inter-American Economic and Social Council for further study recommending, in a carefully worded resolution,⁹ that the American States in their economic relations with one another be guided by those of the Agreement’s principles on which unanimous agreement had been reached. The resolution also contained an indirect endorsement of bilateral treaties and was entirely satisfactory to the United States.

Committee C took up the proposed Technical Assistance Program of the Inter-American Economic and Social Council. A resolution¹⁰ was adopted providing for the administrative machinery and establishing the guiding principles for such a program. These guiding principles included all those which the United States had considered basic to the program’s successful formulation and execution.

No attempt was made at the Special Meeting to approve any specific technical assistance projects which will be prepared by a Coordinating Committee on Technical Assistance, the technical body which, according to the resolution, is to prepare and carry out the program under the Council’s supervision. The Special Meeting likewise did not attempt to obtain financial contributions or pledges. The resolution provides, however, that all member countries should contribute to the program from their available technical and financial resources and the Inter-American Economic and Social Council in the course of its regular sessions will, in due course, endeavor to determine how such contributions should be made.

Committee D dealt with agenda item 4, “Economic Effects of Currency Devaluations”. Discussion in this Committee was largely academic and no resolutions were adopted. The rapporteur’s report¹¹ merely summarized the views expressed by the several delegations and concluded that sufficient time had not yet elapsed to permit a proper evaluation of the effects of recent European currency devaluations on Latin America’s economy. Brazil was critical of the efforts of certain European countries to stimulate colonial production (allegedly with ECA funds) of commodities which compete in world markets with those of Latin America. This Brazilian argument was also repeated by the head of the Brazilian Delegation in a lengthy speech at the closing session …

The members of the United States Delegation were impressed with the calibre of the delegates that most of the Latin American countries sent to the Special Meeting. Four of the delegates were of cabinet rank and many were top-flight government officials handling economic and financial matters in their respective countries.… The choice of Dr. Ramón Cereijo, Argentine Minister of Hacienda, as Chairman of the Special Meeting was in many ways a logical one. Cereijo proved to be a competent chairman. He was dynamic and affable and managed to keep things moving smoothly and rapidly.…

Although no spectacular results were achieved at the Special Meeting, it was a highly successful one at least from the viewpoint of hemispheric solidarity. The atmosphere of frank cordiality which prevailed throughout did much to improve our relations with our good neighbors and I personally am convinced that most of them returned to their respective countries better friends of the United States than when they arrived here.¹²

Respectfully submitted,

Edward G. Miller, Jr.

1. Not printed; filed with this letter.

2. Text (including reservations) of the Agreement, which was opened for signature May 2, 1948, is printed in Annals of the Organization of American States, 1949, pp. 99–108.

   For previous documentation, see Foreign Relations, 1949, vol. ii, pp. 424 ff.

3. None printed.
4. For the report and resolution of this Committee, see Annals, 1950, pp. 255–258.
5. The U.S. position paper on this subject may be summarized in part as follows: it stated that the report in question accepted uncritically the benefits of government intervention (especially exchange controls), took inadequate note of varying economic conditions from country to country, reached the questionable conclusion that the terms of trade for American Republics had lately deteriorated, tended to promote autarky, and contained no unified discussion of labor and manpower problems. (Enclosure No. 5 to the instruction of March 20, 1950, from John D. Hickerson, Jr., Assistant Secretary of State for United Nations Affairs, writing on behalf of the Secretary, to Mr. Miller, 365/3–2050.)

6. The U.S. position paper on this topic read in part:

   “The U.S. has never been anxious to have the Special Economic Conference at Buenos Aires held. In the past the chief reason has been that at such a Conference all or most of the Latin American countries would be in practically a single position of requesting things, while the U.S. would stand alone as the country in a position to provide the resources to do them. While this view still prevails to some extent, it is now believed that most of the Latin American countries realize that the U.S. will insist that these countries first prepare a favorable environment for any assistance rendered, and consequently the U.S., especially since Mr. Miller’s trip, does not feel so fearful of what might happen at the Conference if it should be held. The U.S. does not feel, however, it should take the initiative either way; if any other country moves to postpone or cancel the Conference, the U.S. will support such a motion, but it would not take the initiative.” (Enclosure No. 6 to the document cited in the preceding footnote.)

7. In a memorandum of August 3, 1949, to Willard F. Barber, Deputy Assistant Secretary of State for Inter-American Affairs, Ambassador Albert Nufer, U.S. Representative on the IA–ECOSOC, had stated in part: “No action on ratification has been taken by the United States because of the many reservations (including our own) which were entered at Bogotá, especially those reservations made by Mexico, Venezuela, and Guatemala which substantially impair the effectiveness of Chapter IV on private investments.” (810.50 Buenos Aires/7–1449)
8. For an editorial note regarding the Treaty of Friendship, Commerce, and Economic Development between the United States and Uruguay, signed in Montevideo November 23, 1949, see Foreign Relations, 1949, vol. ii, p. 794. For text of this Treaty, which has not gone into effect, see Department of State Bulletin, September 25, 1950, p. 502.
9. Text is printed in Annals, 1950, pp. 258–259.
10. For text, see ibid., pp. 261–267.
11. Annals, 1950, pp. 267–269.
12. Mr. Miller’s remarks made at the closing session of the Special Meeting on April 10 are printed in Department of State Bulletin, April 24, 1950, p. 650.