DEPARTMENT OF STATE
Memorandum of Conversation
DATE: September 30, 1971
SUBJECT: Call of Colombian Finance Minister
Minister of Finance Rodrigo Llorente
Ambassador Botero of Colombia
Mr. Charles A. Meyer, Assistant Secretary (ARA)
Mr. Edward S. Little, Director, Office of North Coast Affairs (ARA)
Mr. Charles J. Stockman, Deputy Director, Office of North Coast Affairs (ARA)
E/ORF - Mr. Katz
E/ORF/TRP - Mr. Ingersoll
Paris, Ambassador Martin (DAC)
The Minister opened the discussion by expressing appreciation for the larger sugar quota for Colombia included in the legislation recently passed by the U.S. Congress. He said that this increase was very important for his country.
He next turned to the subject of coffee, describing recent developments as of great concern to Colombia. He pointed out that coffee prices had dropped approximately ten cents per pound in the last year and that this represented close to $100 million in foreign exchange for his government. He said that up to several weeks ago the price of coffee had been [Page 2] fairly stable owing to extra purchases in anticipation of a U.S. dock strike but that now the market was weaker and the price of coffee had recently fallen by another cent. He further pointed out that the drop in coffee prices had created a serious problem for the Colombian internal budget; the price reduction had reduced funds available to the central government by 1.5 billion pesos which, of course, had restricted investments and other expenditures within the country. He stressed the importance to Colombia of the $77 million in sector loans made available by AID at a critical moment in their dealing with these financial problems.
Mr. Meyer said that, as the Minister knew, the U.S. executive branch has strongly supported the passage of the implementing legislation for the coffee agreement. Chairman Mills had been fully occupied in the past weeks with new tax legislation related to the President’s August 15 economic program. Nevertheless, he continued, during the past week several contacts have been made by the executive branch with the House Ways and Means Committee and a further one was planned in the next few days. He said that we are hopeful but, of course, did not know when the implementing bill will be passed. Ambassador Botero said the present time is a good one to push this legislation since the fishing season is over and there are no current problems in this respect. He hoped the executive branch would redouble its efforts to obtain the passage of this legislation. Finally, he commented that the outcome of this matter was important to Colombia as next month it would begin to examine its position with respect to a new coffee agreement when the current one expires in September 1973.
Minister Llorente turned to the IMF meetings at which he had been the spokesman for the Latin American delegations. He particularly called to Mr. Meyer’s attention the speech he had made the previous day at the meetings and said that one paragraph synthesized the Latin American view on the current situation. This position is that Latin Americans are strongly in favor of elimination of the ten percent surcharge for all countries, not only for the less developed nations. He said that this is the only logical position which they could take. At the same time, he added, the Latin American countries felt that arrangements which would be made on the monetary plane would mean a deterioration in their terms of trade with non-dollar area countries.[Page 3]
In view of this, the Latin American countries felt that they should receive additional foreign economic assistance. In response to Mr. Meyer’s question, the Minister said he meant aid from all developed countries and that he would be sending a copy of his address to Ambassador Edwin Martin of the DAC in Paris.
- Source: National Archives, RG 59, Central Files 1970–73, POL 7 COL. Limited Official Use. Drafted by Little. Written at the bottom of the memorandum, in an unknown hand, was “Thus aid could be in the form of generalized preferences as part of Latin American’s concept of ‘compensation’ for commercial dislocations.”↩
- Colombian Minister of Finance Rodrigo Llorante and Assistant Secretary Meyer discussed commodity and trade issues.↩