138. Summary Notes of a Meeting of the Subcommittee on the Buenos Aires Economic Conference, Department of State, Washington, May 28, 1957, 3 p.m.1


  • State:
  • Mr. Rubottom (Chairman)
  • Mr. Kalijarvi
  • Mr. Turkel
  • Mr. Sanders
  • Mr. Corliss
  • Mrs. Mulliken
  • Mr. Briggs
  • Mr. Robinson
  • Mr. Chase
  • Mrs. McClung
  • Mr. Favell
  • Agriculture:
  • Mr. DeFelice
  • Commerce:
  • Mr. Knowles
  • Mr. Poirier
  • Defense:
  • Mr. Kenny
  • Export-Import Bank:
  • Mr. Rowntree
  • ICA:
  • Mr. Atwood
  • ODM:
  • Mr. Winant
  • Treasury:
  • Mr. Willis
  • Mr. Korp
  • Mr. Arnold
  • Interior:
  • Mr. McCaskill

Mr. Rubottom said he had received inquiries as to whether the Argentine Government might not request deferment of the Economic Conference, which is scheduled to open in Buenos Aires on August 15, 1957. He had raised the question with Ambassador Beaulac, who thought such a request unlikely. The US must therefore proceed rapidly to prepare its position for the conference.

The first item on the agenda is a proposed General Inter-American Economic Agreement, a preliminary draft of which had previously been circulated to all agencies represented on the committee.

Mr. Rubottom said that the Department of State assumes no responsibility for the draft agreement and that it has no official status. The Inter-American Economic and Social Council was directed, by Resolution 39 of the Rio Conference (1954), to prepare an economic agreement for submission to the forthcoming Buenos Aires Conference. The Council was unable to reach accord on a text and turned the work of preparing the draft over to the Secretariat. Many of the provisions of the present draft are clearly unacceptable to the United States Government and also may not have the support of other governments. At the same time, the US has a firm commitment to consider an inter-American economic agreement of some sort.

Mr. Rubottom had discussed with Mr. Gerald Morgan of the White House Staff and Mr. Carl Marcy, Chief of Staff, Senate Foreign Relations Committee,2 the various forms which an economic agreement might take, and there are at least three possibilities, i.e., (1) an executive agreement, (2) a treaty to be submitted to the Senate for consent to ratification (or it could be an agreement for approval by joint resolution of both Houses of Congress), or (3) a declaration of principles which would have the status merely of recommendations to governments. Decision as to the form which the agreement should take will depend on the type of document which is developed in the course of negotiations.

The Inter-American Economic and Social Council will discuss the paper beginning Monday, June 3, and these meetings will afford the US an opportunity to judge whether other governments are prepared to eliminate the provisions to which the US could not agree [Page 507] and reduce the document to least common denominators or whether they will insist on including provisions on controversial issues.

Mr. Rubottom said that all agencies had been invited in April to submit comments on the draft agreement but that observations had been received from only four agencies. A meeting will be held at 10 a.m., Friday, May 31 to afford all interested agencies an opportunity to present their views and discuss the draft.

Mr. Kalijarvi doubted that the Senate Foreign Relations Committee would give serious consideration to an agreement of the type circulated. It dislikes vague commitments, and the draft would have to be much more concrete and specific if treaty form is to be considered. Also, the agreement is unbalanced. It calls for many concessions from the US and very little from the Latin American countries. A one-sided proposal is not likely to be approved by the Senate.

Mr. Kalijarvi added that US trade policy is likely to come under attack at Buenos Aires. In the past week we have agreed to raise taxes on imports of lead and zinc and imposed restrictive quotas on woolen textiles and linen toweling.

Mr. Rubottom said the US was failing to live up to commitments made at the Rio Conference in at least two respects. We had undertaken to keep our markets open to Latin American products, and the new lead-zinc duties would hurt several Latin American countries. Also, we had announced at Rio the establishment of an International Finance Corporation which would help these countries finance their economic development. After two years, not a single loan has been made.

Mr. Atwood said that the US record on some of its undertakings at Rio was good. The Export-Import Bank has provided large credits. The technical cooperation program has advanced, partly because of funds made available through our surplus disposal program, which was not foreseen at Rio. He agreed with Mr. Kalijarvi that the draft agreement is weighted in favor of the Latin American countries, and he recommended that the US request concessions to compensate. A strong offensive is the best strategy in such negotiations, and the US record is good enough to permit its use.

Mr. Rubottom agreed that the US need not be on the defensive. He thought the US platform at Buenos Aires should be the same as at Rio—a strong presentation of the benefits of private investment and free private enterprise. To support this the delegation will need a detailed statement of Latin America’s total dollar receipts from the US. The Commerce Department agreed to provide this information.

Mr. Willis questioned the desirability of proceeding with the negotiation of an agreement. He thought it would inevitably be vague and meaningless unless the Committee determined promptly [Page 508] what type of agreement the US is shooting for. The proposed draft waters down the US philosophy materially, and even after negotiation we may well come up with a draft that the US could not accept.

Mr. Rubottom saw no need for backing away from a discussion of an agreement just because the first draft is poor. He regarded it as a working level paper which will be materially changed when it comes before the Council. If the Council does not produce a draft which we regard as suitable for negotiation at Buenos Aires and possible submission to the Senate, the Committee can then recommend that the objective be changed from a treaty to a declaration of principles. The latter could be our second line of defense.

Mr. Willis asked whether there should not be a US position developed on the paper prior to the meeting of the IA–ECOSOC.

Mr. Rubottom said that was the purpose of the meeting scheduled for Friday.3 It was agreed that the US would take a strong stand against objectionable portions of the present draft and that the US representative on the Council would obtain guidance, as needed, from the interested agencies as changes in the draft are proposed.

Mr. Knowles asked whether it was not clear in advance that neither a treaty nor an executive agreement was a real possibility.

Mr. Rubottom said Mr. Marcy of the Senate Foreign Relations Committee had told him that the Committee was, in general, favorably disposed toward Latin America. Mr. Marcy thought that if an agreement could be developed at Buenos Aires in conformity with the well known principles of US foreign economic policy, it might be approved in the form of a treaty.

In conclusion, it was agreed that there will be circulated to the CFEP Subcommittee a list of topics expected to be discussed at Buenos Aires. A brief indication of the current US policy on each one will be included. After approval or amendment by the Subcommittee, the working group will prepare the position papers, which, in turn, will be presented to the Subcommittee for approval.

  1. Source: Department of State, OAS Files: Lot 60 D 665, BAECCFEP Subcommittee. Confidential. No drafter is indicated on the source text.
  2. A memorandum of Rubottom’s conversation with Marcy, drafted by Sanders, is ibid., Central File 365/5–2357.
  3. May 31.