34. Briefing Memorandum From the Director of the Policy Planning Staff (Lord) and the Assistant Secretary of State for Inter-American Affairs (Rogers) to Secretary of State Kissinger 1

The Lesson of the New Dialogue

We face a curious paradox: our relations with Latin America have improved significantly in the past 18 months—yet the renewed “inter-American solidarity” promised at Tlatelolco in February 1974 remains as elusive as ever. In fact, the New Dialogue meetings themselves have been dropped, the MFM Working Groups disbanded.

Underlying this paradox, we believe, is the fact that regionalism can no longer serve as the primary focus of U.S.-Latin American relations. Our inability to translate generally positive bilateral relationships into a similarly positive regional environment stems from the ambiguity of the “special relationship” between Latin America and the United States, and the hemisphere’s growing diversity. So long as we approach Latin America primarily as a unit, we will engender a suspicious common front against us—and diversity will paralyze action.

This is not an insoluble dilemma. Regionalism does provide a convenient mode of interaction with the smaller countries and is an unavoidable and convenient rationale for specific initiatives. As a practical matter, however, the increasingly varied interests of the hemisphere’s more powerful countries—including our own—requires a mix of relationships tailored to specific needs and situations, most of which are not susceptible to “regional” solutions. Two of the most striking de[Page 107]velopments of the past decade—the rise of sub-regional politics and the proliferation of extra-hemispheric linkages—are a direct reflection of the growing industrial power and diversification of key countries, particularly Brazil and Mexico, which is driving them to seek capital, technology and markets in a manner reminiscent of 19th century European competitions.

The implication is clear: we should approach individual countries and groups of countries in Latin America in a differentiated fashion, placing greater emphasis on bilateral and sub-regional relationships, and attempting whenever possible to implement our global economic policies in a way that will engage Latin America’s new middle powers in productive commercial relationships and contain the inevitable conflicts their global emergence will entail.

This conclusion is more easily stated than implemented. The classic instrumentalities of bilateralism in the hemisphere—U.S. military and economic assistance programs—are not only declining and hedged with restrictions, but are either inappropriate or simply unavailable. The three countries where our interests are greatest: Brazil, Mexico and Venezuela, are rightly no longer eligible for concessional AID programs, just as they have received no grant military equipment since 1968. U.S. responsiveness to their clamor for “trade, not aid” has been limited by competing domestic and international pressures. But we have also limited ourselves conceptually by searching for nonexistent “regional” solutions.

We thus face in Latin America a situation similar to the one you described in your September 1 Special Session speech: “no panaceas, only challenges.” But if we deemphasize regional multilateralism, we will limit the occasions for generalized confrontations. And if we focus instead on two or three pressing specific issues in addition to Panama and Cuba, such as resolving trade conflicts with Brazil, or developing positive interactions with the Andean Pact, we have a solid chance of consolidating the more favorable climate generated by your UN Special Session initiatives, which have great potential significance for many Latin American countries—whose growth, though substantial, remains fragile, and thus both vulnerable to uncontrolled fluctuations and susceptible to positive influence.

Your September 30 luncheon with Latin American Foreign Ministers in New York is a classic exercise in “regionalism.” But it, and your separate bilaterals, will move us in the right directions should you:

—specify our openness to implementing the Special Session approach in a manner beneficial to the concerns of particular Latin American countries and groups of countries;

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—stress our interest in Latin America in contemporary rather than traditional terms (e.g., interdependence and trade rather than special relationship and aid); and

—ascribe to the New Dialogue experience a major role in the development of the United States proposals at the UN Special Session, reemphasizing the need to work out hemispheric problems in global as well as regional fora.

Some details of such an approach are set forth at the conclusion of this memorandum following a review of some of the reasons that lead us to recommend it.

I. The Absence of Regional Unity

Our continuing efforts to stimulate our missions in the field recently led an American official in Guatemala to respond that:

“Our problem, our struggle, our mental anguish in dealing with Latin Americans derives from the fact that, as has been often stated but not recognized in the highest levels of our government or in its organizational structure, Latin America is really extremely diverse and getting more so. Now, with the inclusion of the West Indies, it is more diverse than ever. Add the emergence of Brazil and Mexico, and to some extent Venezuela, as first-rate powers approaching equal importance to Italy or even France or the UK: Brazil because of its economic explosion and nascent military power; Mexico because of its rapid growth, intellectual leadership, and contiguity to the United States; and Venezuela because of its petro-power; and the answer is that we should stop trying to deal with Latin America as a region.”

The prescription is so stark as to provoke incredulity. Yet you will remember that our planning talks team returned from South America ten months ago emphasizing the differences among the countries visited. And a recent S/P traveler to Central America was struck by the individuality of each of the five lovely countries normally lumped together under the “banana republic” label. Have we been pursuing a will-o’-the-wisp in seeking to find a common denominator?

Abstracting somewhat, daily events in the hemisphere reveal numerous signs of fragmentation both internally and internationally:

Latin America’s capacity to mobilize for positive international purposes is sharply limited by pervasive internal preoccupations and local rivalries. Despite visible industrial and institutional progress, the generalized commitment to “national development” has not led to a generalizable developmental pattern. Economic growth remains uneven and vulnerable to international fluctuations. Politically, lack of confidence compounds authoritarian tendencies and feeds foreign scapegoatism. Though competition for “regional leadership” is rampant, no one country is dominant.

The “hemispheric security” rationale that inspired U.S.-Latin American cooperation during World War II and to some extent the Cold War, has become increasingly marginal. Bilateral assistance programs, which during the 1960s frequently involved the U.S. Government deeply in [Page 109] Latin American life, have largely evaporated. They leave a residue of mutual disillusionment—just when internal scandals and self-doubt have tarnished the power of example of U.S. society. Meanwhile, détente, renewed interactions with Europe and Japan, and the emergence of “Third World” attitudes have broken down Latin America’s global isolation and heightened its diversity.

Venezuela’s President may ultimately be right in arguing that “Latin America is a nation in formation.” But the indisputable fact is that, in the wake of local growth and the relative decline of U.S. hegemony, the hemisphere’s daily life is increasingly marked by the discord of virulent provincialisms.

Not all of this discord is due to internal factors. Unprecedented economic growth—an average of more than seven percent for all countries each of the past three years—has been fed by growing dependence on external markets and capital now threatened by international inflation and economic controversy. Even progress has thus come to appear suspect. In theory growing interdependence could lead to a greater willingness to cooperate internationally. In practice, the addition of economic uncertainties to the domestic social and political pressures that have already tended to undermine democratic regimes in most countries appears to be fueling pessimism and inability to cooperate.

II. Consequences of Disunity

The extent of regional disunity and differentiation has tended to be disguised by the existence of the inter-American system, and by the fact that our regional overtures now typically encounter the Latin American states aligned in a common bloc to which the United States is expected to respond, but from which it is excluded. Disunity, however, affects relations among Latin American states almost as much as their relations with the United States. The parallel fates of the informal New Dialogue MFMs and of the Mexican-Venezuelan initiative to establish SELA, a purely Latin American economic organization, are instructive.

A. The New Dialogue MFMs

In taking up your offer of a New Dialogue, the Latin Americans established a confrontational agenda, rejected your call for “community,” and insisted on a format that essentially called for U.S. concessions.

Despite our best efforts to establish a framework of mutuality in the two MFM Working Groups, the Latin Americans remained committed to their strategy of seeking to force concessions by an adamantly unified approach. We, in turn, made clear that we were prepared neither to legislate unbalanced restrictions on multinational corporations, nor to engage in a massive new assistance program for the transfer of technology.

Then, in sharp contrast to the EEC’s forthcoming Lome posture, the 1974 Trade Act conditioned GSP with the restrictive provisions—anti-OPEC, Gonzalez, Hickenlooper, and so forth—that the Latins had [Page 110] been pleading with us to end, and which to them foreshadowed U.S. opposition to their commercial expansion. The Trade Act fiasco sealed the conclusion already beginning to be shared by most governments, including ours: although a catalog of problems had indeed been identified, the New Dialogue offered few immediate prospects for concrete action as it was then evolving.

B. SELA

The Mexican-Venezuelan initiative to establish SELA as a vehicle for coordinating regional economic relationships without the United States is now running into difficulties strongly reminiscent of the original New Dialogue meetings, but on a Latin American scale. The smaller countries are invoking “regional solidarity” in an effort to extract concessions for the “relatively less developed.” Brazil, meanwhile, is quietly repeating its New Dialogue performance: accepting participation in principle, so as not to be isolated, but deferring practical commitment so as not to lose global flexibility.

The unenthusiastic reception accorded SELA has already forced its sponsors to argue that they do not seek “universality” and are willing to proceed without the participation of all governments. Even in this reduced format, it is unlikely that SELA will prosper—except at a largely rhetorical level in non-regional fora—without resource commitments its sponsors are unlikely to make.

The primary lessons are identical in both cases: for all its rhetorical uses, regionalism is politically more effective as a negative than as a constructive force: furthermore, leaving politics aside, regional economic problems are not susceptible to exclusively regional solutions. In the absence of massive infusions of resources that enable choices to be postponed and differences set aside, most of the practical issues affecting the countries of the hemisphere are not subject to resolution in regional terms.

III. The Special Problem of the United States

Though it is comforting to realize that disunity hinders the regional efforts of others as well, there is no question that regionalism now tends to work to the particular disadvantage of the United States.

The reason is that regionalism has historically been shaped by the United States through its domination of the inter-American system. As the Latin American countries have increasingly abandoned their earlier policies of automatic alignment with the United States, they have also increasingly come to question the structure and functioning of the OAS, the principal inter-American institution, and to use it as a forum for pressuring the United States.

Underlying these tendencies is the fact that influential sectors of Latin American opinion—including for the first time members of the ubiquitously powerful military elites—now believe (or fear) that there are now fewer fundamental interests in common between Latin America and the United States than between the United States and [Page 111] other industrial powers (including the Soviet Union), or than between Latin America and other developing countries in Africa and Asia. These beliefs—which are scarcely incentives to active cooperation with us—are not infrequently supplemented by the conviction that Latin America is engaged in a struggle for independence from the United States.

This concern with conflicts of interest has brought back an earlier focus of inter-American relations: the attempt to use regionalism to limit the exercise of power by the United States. This happened in the 1930’s. Now, as then, the inter-American system has become a forum for the reaffirmation of the principle of non-intervention. The non-intervention issue was revived at the height of the cold war by American military intervention, indirect and direct, in Guatemala (1954), Cuba (1961), and the Dominican Republic (1965), and by clandestine operations in a number of Latin American countries, highlighted by U.S. interference in Chilean politics from 1963 to 1973. In addition, these political-military manifestations of interventionism are now frequently perceived as having been supplemented by economic ones, such as assistance cut-offs and corporate bribery. Hence, attempts to codify regional relations have come to include proposals for sanctions against “economic coercion” and rules of conduct for transnational enterprises—measures aimed essentially at creating a juridical structure curbing the uses of U.S. power without reciprocal concessions in return.

It is not surprising, therefore, that the only notable change wrought thus far by two years of work on reforming the inter-American system has been the change in the voting requirement for lifting Rio Treaty sanctions. The requirement for a two-thirds vote, written in the heyday of U.S. regional influence (1948), was designed to prevent the U.S. from wielding a tyranny of the majority. Today, with U.S. domination much attenuated, the two-thirds rule is seen as a way for the U.S. to mobilize the tyranny of the minority. But the essential point is that this reform is aimed at inhibiting the U.S. power to interfere with the freedom of action of the other members of the OAS.

In the long run, now that the present “imperial” encumbrances like the OAS sanctions against Cuba have been modified, and assuming that the OAS does not again serve as a fig leaf for U.S. intervention as happened in 1965 in the Dominican Republic, it may be possible gradually to restore confidence in a regional system responsive to all of its members. The latest OASGA and the special conference on the Rio Treaty in San Jose are optimistic signs. In the short run, however, the hemispheric institutions to which we belong do not stir the imagination. Even the smaller countries for whom the OAS technical assistance programs are still a significant resource, and who look upon the Rio [Page 112] Treaty as their first line of mutual defense, do so without enthusiasm, faute de mieux.

Moreover, the dominant political fact is that the United States remains the one country in the hemisphere able to evoke regional unity—against itself.

IV. Resolving the Paradox

It is rather common to see these centrifugal tendencies as too strong to overcome and to prescribe disengagement as a damage-limiting device. Your former Harvard colleague, Albert Hirschman, for example, argues that traditional inter-American relationships have neo-colonial connotations and carry such a weight of emotional distance that voluntary association can come only after both sides have “lived apart.” He advocates U.S. private disinvestment from Latin America and an “arms length” political relationship as prerequisites for constructive intercourse in the future. Hirschman’s views express the instincts of many veterans of the diplomatic wars of the Alliance for Progress who feel that U.S. engagement with Latin America is either futile or counterproductive.

These are powerful, but incomplete insights. They overlook the fact that disengagement and “non-intervention”—no matter how apparently positive in comparison to certain patterns of political and economic interventionism—are as futile and counterproductive as the attitudes and conventions they are intended to replace. Political passivity and bureaucratic inertia cannot lay the basis for adjusting the many conflicts that will continue to arise. As Chile under Allende demonstrated, events in Latin America sometimes force a U.S. response. Similarly, as the Trade Act demonstrated, events in the United States sometimes force a Latin American response.

This dilemma can be resolved, not by disengagement, but through a new form of engagement that combines a low-key regional approach with more active bilateral and subregional relationships tuned to specific issues and particularly to our global efforts to deal with trade and development problems.

Our recent experiences, in fact, suggest that our relations with Latin America are already improving significantly, if sometimes imperceptably, along these lines. The evidence of recent months even suggests that the tide of regional confrontation is receding; the San Jose meeting reaffirmed the principle of collective security between Latin America and the United States. Potentially disruptive trade and investment conflicts with Brazil, Peru, and Venezuela are being contained—at least for now.

One reason is progress on important symbolic issues. The Cuban issue has been removed as a source of generalized controversy. A new Panama Canal Treaty seems conceivable. Another reason is that Latin American leaders have realized that constructive relations with the [Page 113] United States will not be facilitated by replacing inter-American organizations with purely Latin American organizations. They are also increasingly aware of your efforts to revitalize U.S. policy and leadership are bearing fruit, both in ARA and globally. There is even some sensitivity among Latin Americans that they have not contributed more themselves.

This changed atmosphere has critical policy implications. Lacking confidence in their individual countries’ capacity and bargaining power when facing a presumably hostile United States, Latin Americans sought refuge in numbers and attempted to use the New Dialogue to force a general change in the structure of international relationships without making “bilateral deals” with the United States. This approach also underlies proposals such as CERDS, the various codes of conduct for multinational enterprises and transfer of technology, and the search for a system of “collective economic security.”

Though we still cannot disregard this defensive multilateralism, the cumulative impact of recent events and particularly the new global approach symbolized by your UN Special Session speech may now enable us to free ourselves from the straightjacket of regionalism. And by abandoning regionalism as our primary focus, we will add a paradox of our own to the hemispheric scene: a greater ability, where circumstances warrant, to develop regional approaches including most, if not all, of the hemisphere’s countries.

V. Some Specific Challenges

A more differentiated approach to Latin American policy will require a sharper definition of our interests as well as greater flexibility in our choice of fora and policy instruments. A reorientation of this magnitude cannot—and need not—be accomplished overnight. But the fact is that we have already begun. Implementation of GSP is being structured through bilateral talks rather than through the OAS. We have recently instituted processes of consultation with Brazil and Venezuela on global economic issues, and are considering internally the options for strengthening interaction with these and other key global “middle powers.”

In the months ahead we will generalize these incipient efforts. As noted earlier, for example, our bilateral concessional AID programs have already been phased out in the major countries. We now need to reassess AID priorities to give particular attention to the “post-AID linkage” problem: how to continue to infuse technical cooperation, training and services into the great majority of Latin American countries which are now no longer receiving concessional assistance. To take another example, we will be working to direct the OAS toward those activities least amenable to unilateral or bilateral approaches [Page 114] such as human rights and regional peacekeeping. With regard to inherently multilateral issues like codes of conduct, the role of the OAS as opposed to the UN or other fora remains unclear. One possibility would be to attempt to work on the political aspects of corporate activities in the OAS, and on economic aspects in the UN. But there is no reason to follow a single track. Greater interaction with the Andean Group, which has now resolved its automotive policy, could set useful precedents for increased private investment and technology transfer.

You will be hearing more from us on these and other issues: the impact of détente, trends in the Caribbean, and the evolution of Mexican policy. But we would like to draw your attention now to your September 30 luncheon toast and to three specific problems areas:

—trade with Brazil;

—subregional integration; and

—the regional safety net proposal,

that exemplify the real tests to our policy in the period ahead.

First, your New York luncheon toast. You are receiving a draft separately. Your basic approach should be to develop the implications for Latin America of your September 1 UN Special Session speech, stressing that the New Dialogue contributed importantly to our appreciation of developing country issues, that our resulting global approach has been shaped with Latin American interests in mind, and that unlike the proposals of the past two years, which have mostly concentrated on the most severely affected and least developed countries, this approach also holds particular benefits for the global middle powers clustered in Latin America.

We are suggesting one change from the themes of your previous Latin American speeches: that you keep the new focus on industrial-developing country relations, but drop the “special relationship.” When the United States can arrange assistance of $2 billion or more for Israel—but can-not provide an emergency loan of $150 million to Argentina; when grain deals are possible with the Soviet Union—but countervailing duties are levied against imports from Brazil, talk of a “special relationship” implying that the United States has a special interest and responsiveness to Latin America sounds hollow. And it is unnecessary. The reason cooperation is profitable among our countries is not that we have historic relationships—for the reference introduces memories of past conflicts and patronizing attitudes—but simply that we are relatively developed and accustomed, if not always comfortable, in dealing with each other.

The tests. Your toast will demonstrate progress in identifying the shape of the problem and the direction of future efforts. But sustained momentum will depend on our ability to move on specifics like the following:

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(1) Trade with Brazil: The consolidation of our relationship with this most important Latin American country requires a special effort to resolve growing trade conflicts. Similar issues are already foreshadowed with Mexico, and will arise increasingly elsewhere in the years ahead. In particular, we should use the recently established U.S.–Brazil Consultative Group on Trade to make a serious effort to resolve the export subsidy-countervailing duty problem that threatens an increasing range of Brazilian exports to the U.S. If necessary, we should consider explicitly shaping our approach to these questions in the Geneva MTN so as to reach an accommodation with Brazil. Evidence that the U.S. was making a real effort in this regard would confirm Brazil’s general moderation and offset other conflicts inherent in Brazil’s emergence on the world scene.

(2) Sub-regional Integration: Together with the Central American Common Market and Caribbean integration efforts, the Andean Group provides a potential framework for sub-regional relationships and a practical opportunity to increase cooperation in science and technology in a way that could ultimately pay significant dividends. In addition, the Andean Pact provides a political offset to Spanish-American suspicions that we are too close to Brazil, and a counter to fears—fanned by our recent strictures against bloc politics—that we oppose integration efforts generally.

(3) A Regional Safety Net: Adverse political dynamics and impending economic disaster face several countries of the southern cone (Argentina, Chile, Uruguay and to some extent Brazil and Peru). Though most of these problems are fundamentally internal, there are also severe short-term balance of payments problems that can be alleviated through international cooperation. The financial safety net proposal—which you endorsed in your UN speech—could be critical here (regionalized implementation would also bring many “Third Worlders” up short). It would respond to a Latin American initiative and utilize the technocratic economic skills that are far more prevalent in Latin America than in other developing areas, while strengthening countries whose development, though still fragile, is currently along mixed economy lines congenial to us.

Each of these three cases highlights limits on our current negotiating authority or organizational structure. Each will require sustained attention and political will at the highest levels of our government. But the shape of the future is clear: either we engage in an interdepartmental and even congressional war of attrition with those who refuse to see the future, or we will face a similar war of attrition in our own hemisphere.

There are palliatives: greater use of professional and technical exchanges, more emphasis on cultural programs and delaying actions on traditional relationships. But unless we begin to move now on the specifics of trade and investment, and thereby facilitate Latin America’s global emergence, we will soon have little to talk about, and will almost inevitably face what we now only fear: isolation in the very region with which we have had the most intimate historical ties.

  1. Summary: Noting that the ideal of inter-American solidarity remained elusive while relations with individual Latin American countries had generally improved since the launch of the New Dialogue, Lord recommended a U.S. policy that would focus more on bilateral ties, eschewing the regionalist approach that posited a “special relationship” between the United States and Latin America.

    Source: National Archives, RG 59, Records of Henry Kissinger, Entry 5403, Lot 78D217, Box 14, Briefing Memoranda, 1975, Folder 4. Confidential. Drafted by Einaudi and Bloomfield on September 17 with contributions from Lewis, Luers, and Fishlow. Kissinger’s remarks at a September 30 luncheon in New York in honor of Latin American Foreign Ministers and Permanent Representatives to the United Nations are published in the Department of State Bulletin, October 20, 1975, pp. 584–587. According to a memorandum of conversation Kissinger told Argentine Foreign Minister Robledo on September 28, 1975, that he did not “think it is possible to find one policy that applies to all of Latin America and one label for that policy.” Instead, Kissinger said, the United States would “concentrate on a few key countries, and not have any label, such as the ‘New Dialogue,’ and say that takes care of everybody.” The text of this memorandum is published in Foreign Relations, 1973–1976, vol. E–11, Part 2, Documents on South America, 1973–1976, Document 29.