148. Memorandum From the Deputy Assistant Secretary of State for Inter-American Affairs (Snow) to the Secretary of State 1
- The Inter-American Economic Conference at Buenos Aires
The Buenos Aires Conference is, in essence, a continuation of a long-standing effort by the Latin American countries to obtain from the United States special economic concessions which we are not prepared to grant.
The main issues, in the probable order of their importance to most Latin American countries, are as follows: [Page 526]
- Special regional facilities for financing economic development. We believe existing institutions and private investment provide ample sources of development capital.
- Stabilization (at high levels) of prices of Latin American primary product exports. We oppose endorsement of the principle of commodity agreements.
- General inter-American economic agreement. The substantive differences that separate us from the Latins on many issues are so marked as to make agreement on a binding treaty of this kind almost out of the question. The Mexican delegation is attempting to line up the other Latin American delegations in favor of a declaration of general principles in place of a treaty. We might be able to approve such a declaration if our views are properly taken into account in it.
- Regional trade arrangements. The European common market has given considerable impetus to the movement for some kind of Latin American economic regionalism. So far nothing concrete has been proposed, but some definite plan may emerge as a result of studies now being carried out by ECLA. We are willing to consider on its merits any definite proposal that is economically sound and consistent with our general trade principles. In this connection, the U.S. recently assisted Nicaragua in obtaining provisional approval at GATT of plans for the formation of a free trade area and eventual customs union among the five Central American states.
- U.S. surplus disposal. The force of the criticism on this score has been mitigated (a) by our demonstrated desire to protect the legitimate interests or other suppliers, and (b) by the fact that seven Latin American countries have entered into PL 480 agreements with us, with others definitely interested.
- Reduction or complete elimination of U.S. taxes on income earned by American business firms in Latin America. We oppose this and favor bilateral tax agreements to eliminate tax obstacles to the flow of capital. We have indicated our willingness to include “tax-sparing” provisions in such treaties.
Our position at the Conference has been made more difficult, first, by recent or imminent actions affecting certain important Latin American exports (petroleum, lead and zinc,2 tung oil, long staple cotton) and secondly, by the recent House action reducing the Economic Development and Technical Cooperation funds and eliminating the special regional fund for Latin America (Smathers Fund).3
As the Conference committees started their work only yesterday, it is too early to forecast results.4
- Source: Department of State, Cabinet Meetings: Lot 68 D 350, CP–7. Official Use Only. Drafted by Rosenson, cleared by Turkel, and concurred in by Willis C. Armstrong.↩
- Reference is to Congressional efforts to raise import fees on lead and zinc. In Soaec 19 from Buenos Aires, August 19, Anderson and Dillon state in part the following: “We strongly urge that administration stand firm against alteration of lead zinc bill [H.R. 6894]. In our efforts allay fears Mexicans, Peruvians and Bolivians, who so far very friendly to US, we have stressed limited amount of increase, fact that rates would be reduced and removed as prices increase, and intentions US carry out its trade-agreement obligations.” (Department of State, Central Files, 365/8–1957)↩
- For documentation, see Documents 56 ff.↩
- An attached agenda of the Conference is not printed.↩