Foreign Relations of the United States, 1969–1976, Volume E–10, Documents on American Republics, 1969–1972

14. Minutes of National Security Council Meeting¹ ²

Washington, October 15, 1969

LIST OF INVITEES FOR NSC MEETING
WEDNESDAY, OCTOBER 15, 1969, 10:00 A.M.

• The Vice President
• William P. Rogers, Secretary of State
• Melvin R. Laird, Secretary of Defense
• General George A. Lincoln, Director, Office of Emergency Preparedness
• David M. Kennedy, Secretary of the Treasury
• John N. Mitchell, Attorney General
• Clifford M. Hardin, Secretary of Agriculture
• Rocco C. Siciliano, Under Secretary of Commerce
• Elliot L. Richardson, Under Secretary of State
• General Earle C. Wheeler, Chairman, Joint Chiefs of Staff
• Richard M. Helms, Director, Central Intelligence Agency
• John A. Hannah, Administrator, Agency for International Development
• Carl J. Gilbert, Special Representative for Trade Negotiations
• Henry A. Kissinger, Assistant to the President
• Raymond A. Ioanes, Administrator, FAS, USDA
• Charles A. Meyer, Assistant Secretary of State
• Nathaniel Samuels, Deputy Under Secretary for Economic Affairs (State)
  Kenneth N. Davis, Jr. (Commerce)
• James R. Schlesinger (Budget)
• Viron P. Vaky (NSC)
• William Watts (NSC)
• C. Fred Bergsten (NSC)
• Robert E. Osgood (NSC)

Minutes of the NSC Meeting on Latin America, October 15, 1969

RICHARDSON—We have developed choices in terms of certain criteria. In looking at relative liberalization, we asked what it would do for Latin America. They have 300 million in annual exports, compared to $2 billion by all LDCs. Thus, we might achieve an aggregate figure more toward tariff preferences.

Total U.S. imports are $30 billion; Latin America’s share is $100 million. The Latin Americans have placed much political emphasis on liberalized trade.

There could be the following approaches:

(1) There could be tariff breaks for the LDCs, including elimination, a percentage figure from zero to the present, or a list of excepted products.

(2) There could be a tariff quota scheme. It has been promoted by the Europeans. You could limit the impact of total imports by a quota, or limit each country to a quota.

(3) There could be an exception list. The LDCs would receive tariff benefits, so long as their exports to the U.S. did not exceed 10%. If they did, then there would be reversion to Most Favored Nation status.

We could adjust tariff levels under each option.

There is also a market disruption concept. We would impose restraint when U.S. manufacturers were hurt.

The State view is that we should first decide what level of tariff benefit we will provide (say 50%), and then use internal safeguards.

Secondly, there could be a tariff quota. And third, there could be a percentage limit—many countries would go up to that limit. This has disadvantages compared to a general quota.

RN—The majority view is to leave things as they are. I have heard them before. What do the Departments think we can do?

RICHARDSON—They all want change.

RN—What? The LDC’s know what is phony.

SICILIANO—We could go any one of the three ways.

DAVIS—We don’t need to be specific now.

RN—I want a general preference scheme.

DAVIS—How do we conduct the negotiations. We need guidance. We must sell it to Congress and business. They look for a safeguard. They want something automatic, with no new bureaucracy.

Competition needs a scheme under which the preference goes to the countries who need it. It should be quite automatic, so that we know when it reaches 10%. This would be salable to Congress, and Congress favors it.

ROGERS—Do any of the options please the Latin Americans?

SICILIANO—All.

SAMUELS—The more advanced of the Latin American countries would benefit most.

RN—Those are the ones with the most political influence. Others would not be in the game for a while.

ROGERS—We can add to the others.

GILBERT—Textiles are out and shoes are out. The most rudimentary exception list cuts out most items most suitable for production in LDC’s. We need to add a further inducement to Mexico border-type problem. Any sophisticated producer will look with concern.

ROGERS—This is your conclusion?

GILBERT—Preference schemes have very real dangers. They must be made realistic. Otherwise they are just rhetoric. We haven’t thought this through, but it is difficult.

RN—Shoes and textiles are not from Latin America. They are from Hong Kong, Western Europe and Japan.

GILBERT—A general preference scheme is conditional on application to those who don’t have preference schemes elsewhere. This means only Latin America and the EEC. The UK won’t give up their special schemes. If primary products as well as manufactured products could help the Latins later, then get them to go to Europe.

RICHARDSON—The Council of Economic Advisors and State favor an approach with no exception list or a short one. Any general exception scheme such as textiles would operate separately. It would be the same with coffee, sugar, etc.; these would be handled another way.

Why limit out some areas? The Latin Americans have urged general preferences, as did Governor Rockefeller in his report. It would have problems with Africa.

The speech would be a general statement of support for tariff reform. We need guidance on the tariff question in the OECD and also in the IE–ECOSOC.

RN—Why borrow trouble, if the Latin Americans say let it apply to all LDCs? If they don’t care, why should we?

ROGERS—You shouldn’t make an empty gesture in your speech. We must produce. We can’t have exceptions wipe out the advantages.

GILBERT—It would be difficult to justify to Congress any preference which discriminates against the U.S. It gives a preferential tariff to imports from the other countries.

KISSINGER—You should therefore have a generalized approach which benefits Latin America.

RN—We all know that many Latin American manufacturers are primitive now; their manufacturers are a long time away.

They think we have prejudices against them, and that we won’t help them. The Latin Americans will remain that way unless something happens. We must take some political risk. We need the psychological impact of some real movement.

SICILIANO—Japan is the enemy.

RN—The Japanese will work longer. They are smart. The Congress is not afraid of Latin America. The Latin American ambassadors think we must do something.

ROGERS—They were very emotional at the OAS meeting.

RN—We should zero in on Latin America. We should keep it as simple as possible. We should take political risks, and give it to Congress.

GILBERT—On their efficiency, (my firm) opened a plant in Mexico City in 1949. By 1950 it was our most efficient plant. It had a very good blades per man-hour record.

RN—That is what we want. We must go that way. We must take risks. I want to make a strong statement that we will take some risks in Latin America. The people will welcome it.

KENNEDY—We are best off in Latin America.

RN—The Latin Americans must know it applies to Latin America.

KENNEDY—But I worry about reverse preferences.

SAMUELS—The Latin Americans now favor generalized preferences. They have moved from regional preferences. There are two kinds:

(1) the Africans have access to their former colonial masters.

(2) The Europeans want preferences for their goods in the LDC’s. This works against us.

All agreed if we do generalize preferences, their must be negotiation in the OECD to seek to eliminate reverse preferences.

There is also the question of multilateral granting of funds.

RN—Who gets control?

ROGERS—We should first lean in the multilateral direction. Second, we should emphasize greater Latin American participation. Third, we should emphasize shared responsibility. Fourth, we should emphasize partnership, but all partners are not equal. To get this through Congress, we must have principal control.

RN—Congress asks if there are a bunch of Latins helping Castro.

RICHARDSON—There would be controls and vetoes. All sources of support would be subject to review by this body. We could draw a distinction between funds made on a multilateral and those on a bilateral basis.

KENNEDY—We will be the main contributor. They want the control. This is a problem. It would be OK if done on a project basis.

HANNAH—If not carefully worded, it then looks as if we put in the money and they make the decisions. Maybe this can be worked out.

KENNEDY—It is a question of internal competition.

HANNAH—There will be cases which must be bilateral.

SAMUELS—If we go multilateral, we must give the Latin Americans, through the IADB, etc., a greater role. It would require limited funds out of our total budget. There would be greater cooperation between the World Bank and the IADB through a structure in which we have confidence.

RN—The Latin Americans don’t have competence. It would be money down a rat hole. But we must make it appear that we are doing something. We must bring them along and help them. This gives the right appearance. On a Western Hemisphere development committee, this may be worthwhile, if the change in substance is not that great.

Bring Canada in as it pulls it out of Europe.

We should use the word “Latins” less.

ROGERS—The Canadians are thinking of joining the OAS.

RN—Do it. Let them do China.

We should work on the name thing.

ROGERS—The Alliance for Progress? Should we change the name? How about Partnership for Progress.

RN—We need a new name. The special relationship. Call it that.

ROGERS—Special partners in progress.

RN—The Latins know they are not special. When you say they are, they like it. Put the word merchants to work.

I like the new world business. How about New World Policy? Bring Trudeau in. Give him a beard, and let him play with Castro.

KISSINGER—With regard to tied loans, we have the following options:

(Mr. Kissinger then discussed pages 18–20 of the Agenda paper, in the attached NSC book.)

RICHARDSON—A decision is required.

RN—Option 5 is out. Option 1 is questionable. The Latin Americans say yes to it.

HANNAH—Either of the first two are too token.

RN—We need something for Latin America only. The middle one? We should move to number 3. Don’t make it too complicated in the speech.

ROGERS—It doesn’t hurt us and it helps them.

RN—It is quite real and quite substantive.

ROGERS—We could do some of this administratively.

RN—We should move administratively where we can. Make it strong in the speech. Pick a date. I will sign an executive order. Call in the ambassadors. I will sign the order and give them pens.

GILBERT—Rockefeller’s Report recommends Option 2.

KISSINGER—Debt rescheduling, in the Rockefeller Report. Treasury doesn’t want it in the speech.

RN—I even understand we can’t cover it in the speech.

I do not want to give the impression we ignored the Rockefeller report. Go the Rockefeller people and explain it must be done country by country.

SAMUELS—Don’t use debt rescheduling. We should say we must take into account the debt problem, which is a serious one. We recognize this is a problem worldwide.

RN—We are pursuing the Rockefeller recommendations. We are studying them further. They are very important. Say so in the speech.

Talk with Woods and others. Get language from him.

KENNEDY—We should send the text to Woods.

RN—On the military issue, we face a different kind of military leader in Latin America. Coups have brought to power Nasser types. They don’t come from the elites. They are nationalistic, revolutionary, and anti-American.

The influence U.S. military personnel can have is enormous. Look at Indonesia. It probably wouldn’t have happened without Suharto, and without our ties with the military.

My feelings are mixed. We must lower our profile. Senator Church and other types will come up with questions, which would throw out the baby with the bath water. Yet we must influence their leadership through close contact between our military and theirs. We should do it but not appear to be doing it.

Governor Rockefeller noticed that our visibility is too high, yet he felt that some military leaders are most deserving of support. There are not very many leaders among political scientists. The military are bad but political scientists are worse.

On the question of recognition, we should go for automatic recognition. We shouldn’t bite on the Cuban problem. It must be mentioned in the speech. Automatic recognition avoids the problem of judgments whether regimes are good or bad.

We should get away from the automatic, knee-jerk reaction that a democratic government in Chile is more to be admired than another. Our attitude should depend on their attitudes toward us, their chances to survive and the degree of stability.

ROGERS—I agree. This is State’s position. The Cranston Resolution helps.

RN—Isn’t it meant against China?

ROGERS—Yes, but it is helpful with Bolivia, for example.

WHEELER—The Rockefeller recommendations are contradictory. On the one hand they call for getting rid of U.S. military missions. On the other, they call for increased grants for training, etc. I have instructed CINCSOUTH to stimulate contact between our military men and US-oriented Latin American military. We do have many Latin Americans in schools here. I have talked with the JCS and other military leaders. I have also talked with DIA [text not declassified] asking them to keep contact with comers.

Deputy Secretary Packard has started a survey of all military groups in Latin America. It will be completed before the end of December. It will study which missions should be terminated, and how we can reduce personnel and lower our profile.

I am convinced that some are helpful. We must be sure about the size and function. We want this laid out so we can judge.

With regard to whether defense attachés can replace military groups, this may be possible in some places but not in others. The defense attachés have an intelligence function.

Your views are being implemented or surveyed.

RN—I suggest you meet soon with Governor Rockefeller and discuss this with him. We should not cover this publicly until we look into it.

ROGERS—How are the military missions there? At the request of the host country?

WHEELER—Usually. The host country funds most activities.

ROGERS—Is there much criticism?

WHEELER—Some. They are sometimes incompatible. We then snatch them out.

HANNAH—Governor Rockefeller has in mind helping training police for internal security. AID brings police chiefs into the International Chiefs of Police Academy. Maybe we should mention this Academy in the speech. It teaches police science and police administration.

RN—Some military establishments in Latin America are status symbols. But maybe this is an anachronism dating from World War II. Maybe this is irrelevant by now.

WHEELER—There is emphasis in our military missions on internal security. They can assist the police when the latter is in trouble. Venezuela is a good example. There was an incipient insurgency nipped by the police and the military. We set up the command post, and we got the Navy to speak to the Army and Air Force. They have some capability in anti-submarine warfare. This is their main external capability and our main concern. The status symbol aspects are important to them. With regard to manpower and money, their expenditures on military are very low per capita. The lowest in the world.

RN—This is an important point.

LINCOLN—Their schools are good. Police training is important and good.

RN—Don’t get caught being for the status quo and the forces of reaction. But we are for the forces of stability and for our friends. We must play the game, and here I differ with Governor Rockefeller; we must strengthen the hand of those governments friendly to us and which have promise of stability.

It is question of revolution versus stability. The latter are not always wrong. We shouldn’t be apologetic about standing by our friends.

Don’t cut off contact between our military and theirs. They may run the place some day.

On internal security, a Venezuelan coup possibility is as great as in the Middle East. Venezuelan oil might be cut off.

Don’t be overwhelmed by fashionable and popular arguments that the military in Latin America are bad. It is not so. They are good. They play an important part in internal security. They shore up the government.

They are a status symbol.

RICHARDSON—Stability requires responsiveness to change. It is a careful balance to encourage countries to maintain stability, but not to refuse to recognize change. It is a difficult line which requires flexibility.

RN—OK, but look at Cuba. Look at Batista and Castro. It is easy to be obsessed with change for the sake of change.

State was not for Castro. CIA and everyone else were.

ROGERS—We could have saved Batista. But there was no decision.

RN—We saved him and then we overthrew him.

MEYER—I would come close to the Rockefeller Report on military-military relations. It would be the lowest possible fixed military silhouette. It would include the technical training and visiting training aspect. This can be done with much fewer people.

1. Source: National Archives, Nixon Presidential Materials, NSC Files, NSC Institutional Files (H-Files), Box H–109, NSC Meetings Minutes, Originals, 1969. Secret. According to the President’s Daily Diary, the following attended the meeting, the meeting lasted from 10:05 a.m. to 12:20 p.m. (Ibid., White House Central Files, President’s Daily Diary)
2. The participants discussed United States-Latin American economic issues, particularly trade. President Nixon concluded the meeting by stating that the United States needed to firmly support its friends in Latin America, including military governments in the region.