S/S–NSC files, lot 63 D 351, NSC 5432 series
Memorandum by the Assistant Secretary of State for Inter-American Affairs (Holland) to the Under Secretary of State (Smith)1
- Briefing for Council Meeting on NSC 5432 “United States Policy Toward Latin America”,2 Thursday, September 2, 1954
There are three main points at issue in this paper to which I would like to call your attention.
- Trade Policy—The paper as now proposed states that the U.S. should adopt stable, long-term trading policies with respect to Latin American countries including gradual selective reduction of U.S. barriers [Page 66]and tariffs on trade. There is some possibility that the Treasury representative may wish to change this to gradual selective “revision”, that being the word used in the President’s message to Congress on foreign economic policy. The whole context of the President’s message establishes that by “revision” he meant “reduction” and not simply change upward or downward. Maintenance of stable trade relations is the most important single factor in our total relations with Latin America. It was Dr. Eisenhower’s No. 1 recommendation regarding economic cooperation.
- Loan Policy—The paper as now proposed would state that the U.S. should be prepared to assure the financing of all sound economic development projects, for which private capital or IBRD financing is not available, through Export–Import Bank loans, subject to certain specified conditions. The Treasury representative is likely to urge that this be changed to “assist in the financing of” such projects. I hope that you will vigorously oppose the Treasury viewpoint, especially since this is the one instance in which it may be possible for us to make any significant advance of position at Rio over that which we took at Caracas. It is estimated that loans meeting the very strict criteria, which are enumerated on page 1 and also in paragraph 9b on page 8 of the document, will not amount to more than $200 million per year, on the average. In my judgment it is imperative to the success of the Rio Conference that we positively assure either that (1) we will finance all loans meeting those standards, or (2) that we will do so up to some such figure as $1 billion over the next five years.
- Stockpile Policy—FOA and ODM have proposed an addition to the statement which would broaden the present stockpile policy to permit acquisition of non-deteriorating reserves beyond the present strategic reserves for strictly defense uses. In view of the importance of minerals production to the Latin American countries and of the adverse effect which decreased stockpile purchases will have on them, we believe that NSC should study this matter in all of its ramifications, but do not recommend approval of the ODM–FOA proposal in its present form.