48. Message From Mexican President Echeverría to President Nixon1
1. It would not be difficult to agree that it is necessary to restructure relations in general between the United States and Latin America. In fact, these relations have shown an increasing tendency to deteriorate in recent years. Almost all observers and analysts agree that the last serious attempt on the part of the U.S. to define an attitude towards Latin America took place during the “Kennedy” era, through the Alliance for Progress.
2. After the “Good Neighbor” policy, and when the U.S. emerged as a great power with commitments in all areas of the world, Latin America became of secondary concern within the overall international interests of the U.S. This trend, which reached critical levels at the end of the decade of the fifties, was emphasized even further by the needs of the “cold war.” It was then that the electoral platform of the Democratic Party proposed a new approach through its “New Frontier.” It is generally believed that the Alliance for Progress failed from its inception due to the weakness and inconsistency of its assumptions and plans. This opinion, however, was not definitely and officially accepted until Mr. Richard Nixon became President of the United States.
3. The policy of the U.S. toward Latin America is characterized by its imprecision. Even though it is less paternalistic than the positions adopted by recent governments of the Democratic Party, the “discreet presence” only conceals the absence of a defined position, if not the presence of concrete or definite interests. Actually, President Nixon’s policy is outstanding for the way in which it has disregarded Latin America in comparison with other areas of the world. The “self help” policy has been insisted upon, though it is not acceptable to the peoples of Latin America who have a great need for equitable treatment in order to meet the demands of economic development.[Page 151]
4. At present the U.S. seems to want to relinquish the role of “world policeman,” which it has performed for many years, and urges its allies to share responsibilities which during the “cold war” period were almost exclusively under U.S. control. This attitude applies equally to matters of war and finance as well as aid for development.
5. At the same time U.S. objectives in Southeast Asia—to withdraw under the most honorable terms possible from Vietnam and remodel its policy toward the People’s Republic of China—seem to have crystallized. The foregoing could lead to the assumption that the U.S. will have an increasing interest in other areas, among which Latin America could be of foremost importance. Another factor in support of this assertion is the clear trend of the world toward trade by geographical regions, with a view of complementing economies. Because of the consolidation and importance of other economic centers of world importance, particularly the European Economic Community, Japan and the Socialist Bloc, the U.S. will find it necessary to give more attention to the countries which are closer to it geographically.
6. On the other hand, different circumstances have appeared in Latin America which prefigure the need to change hemispheric relations. The relative failure of the main projects created during the last decade, such as regional integration and the Alliance for Progress, have led to a new type of nationalism. This nationalism is not in all cases of a socialist nature, such as in Chile, but it does seek to change the perspectives of inter-American relations at both the multilateral and bilateral levels.
7. There has been no resurgence of any type of radicalism of the traditional left. Socialists or communist groups have made no important headway, except in Chile. Neither Peruvian or Ecuadorian nationalism, internal movements in Argentina and the struggle for hegemony over the Southern Cone, the measures implemented by the Government of Venezuela on the exploitation of its petroleum, nor the system for the treatment of foreign capital adopted in common by the countries which form the Agreement of Cartagena, mean that the government or parties in power have, in any way, come close to Marxist currents. In almost all cases, Latin American nationalism identifies with the principles and ideals of western democracy, whose economic and political values no government doubts. On the other hand, what we do find is that the deterioration of hemispheric relations and the seriousness of the domestic problems of all Latin American countries have favored an ever greater, and above all persistent, search for the diversification of trade with the rest of the world.
8. With reference to Mexico, the fact is that the process of industrialization has underlined the need to acquire capital goods and technology abroad. More than 60 percent of its transactions abroad are with [Page 152] the U.S., however, and this is the most important point, during the last four years, Mexico’s deficit in its trade balance with the U.S. has tripled. This is why it is urgent for Mexico to exert even greater efforts to reduce its foreign debt and promote its sales on the international markets.
9. Mexico must promote its development with a higher proportion of domestic savings. Due to its unfavorable trade balance with the U.S., which is aggravated by American protectionist trends and laws, it is necessary to simultaneously reorient trade relations abroad. President Echeverria has already pointed out at the Mexican-American Chamber of Commerce that protectionist barriers “relieve immediate problems but overlook long term benefits and the real national interest of the U.S.” He added that “if instead of importing capital goods and a proper technology on which to base a reasonable prosperity, Mexico should continue to import American inflation (amplified by U.S. trade barriers), in the long run it will inevitably cause Mexico to export social problems.”
10. Mexico has chosen the way of a mixed economy which has permitted the emergence of new social classes. A sector of businessmen has developed and consolidated its position. The GOM is interested in strengthening this sector as long as it continues to take part in and support national objectives. Foreign investments are considered in Mexico as a complement to domestic savings and efforts. For this reason foreign corporations must meet a number of requirements among which the most outstanding is that they must adjust to domestic development policies and associate on a basis of equality with Mexican businessmen. President Echeverria has insisted that “foreign investment will be welcome to the extent in which it contributes to an improved technology, promotes the development of new and dynamic enterprises, directs its efforts to the production of goods for export to all the countries of the world and contributes to the achievement of our national objectives.”
11. It is evident that the Government has made efforts to modify many harmful aspects of the strategy of Mexico’s economic growth which, by unduly stressing industrialization through basically protectionist measures, resulted in a growing concentration of the national income in certain sectors of the population and in certain areas of the country. To continue its process of development, Mexico needs to reorient the structure of its system of production in order to pay off the enormous deficits which have been created by the excessive import of capital goods and insufficient exports; to adopt measures for a fair distribution and decentralization of the productive activities that will satisfy an increasing demand for employment occasioned by demographic pressures; and, at the same time, to expand its domestic market. Otherwise, domestic industries can hardly attain the levels necessary for international competition.[Page 153]
12. The Mexican Government is attempting to carry out these changes without disturbing political stability and social peace. The present administration has made an enormous effort to create a clear awareness of the magnitude of these national problems in all sectors of the population, so that the most important groups of power will become jointly responsible for their care and for the measures to solve them without any major frictions or breaches in harmonious relations.
13. The President of Mexico has frequently defined himself as a coordinator of the national effort. He has made it clear that he does not propose to set some groups against others or destroy the present harmonious relations between the business, labor and rural sectors and, in general, between all sectors of the country but rather strive for unity and coordination. A symbol of this attitude is the National Tripartite Commission, which he created on May 1, 1971, in which workers and entrepreneurs openly discuss with the Government the main problems which arise from the adoption of a more advanced social policy and the reorientation as a whole of existing economic policies.
14. In recent months it has been said that serious disagreements have arisen between the U.S. and Mexico due to the unfair nature of trade relations and to “the Mexicanization process,” which supposedly is aimed at the elimination of foreign capital. The truth is quite different. What has happened is that the domestic level of savings now permits enterprises, which in the past were financed by foreign businessmen, to be funded by Mexican capital. This is a totally valid phenomenon within a system of a free economy. It might even be added that many times American companies themselves have initiated such disengagement operations, possibly because they have found better fields for investment in other countries, including their own.
15. It is true that foreign capital does not enjoy a privileged status in Mexico but neither is it subject to discriminatory treatment. President Echeverria referred to this subject during his visit to the U.S. when he explained that “our country does not create incentives or grant artificial concessions to attract foreign resources. Foreign investment finds security of our legislation, political stability, a wide infrastructure framework, unrestricted exchange convertibility, and a sound financial and credit system.”
16. He also reminded his audience that although Mexico is a developing country, its dynamic institutions, which favor social justice, guarantee a sustained rate of development, even without taking into consideration that the magnitude of its economy and the potential size of its domestic market are enormous.
17. Furthermore, we all know that uneven treatment is not new and should surprise no one. In addition, we realize that the internal decision-making process in the United States is extremely complicated [Page 154] and in the last analysis requires full consultation among all the interested parties within the U.S. Government.
18. Therefore, it is not difficult to understand why President Echeverria, who intended to state our problems clearly and objectively during his official visit to the U.S. last June, wished to establish direct communications with the representatives of the different groups of power and with significant currents of thought in American society. He also gave an explanation of the frank, though always cordial, terms which he had used before the Congress of the U.S.
19. Within this framework it is not conceivable that the visit of the President of Mexico to Canada, several European countries, the Soviet Union, and China in the near future could be construed as an attempt to find points of support to counterbalance the influence of the U.S.
20. Such an argument is not logical. In the first place, Mexico is not seeking to substitute influences. What it does want is to reduce intervention in its internal affairs to a minimum. Mexico seeks new markets. Its outward approach is in search of capital, technology and consumer centers for its products.
21. This position is not the result of a breach or even a weakening of Mexico’s relations with the U.S., as might be the case of other countries in the same area. Together with other mechanisms and thrusts, Mexico’s position stems from the need to complement these relations with those of other countries which can offer new perspectives serving to continue to stimulate its growth. To channel or direct Mexican foreign trade either exclusively or excessively toward the U.S. would condemn us to stagnation and dependency. We know that Mexican relations and trade with the U.S. for several decades, or perhaps forever, will, on their own, be insufficient to avoid deterioration in these sectors.
22. No such breach exists. Mexico has not taken any measures or decisions that would have an adverse effect on American enterprises as a whole. The decision that has been adopted on the acquisition of technology as well as on any technical or capital investment from anywhere in the world, is based mainly on the fact that Mexico must intensify its economic relations abroad, within a new and more precise framework.
23. Basically, it is a matter of searching for ways to diversify Mexico’s trade with other countries in order to reduce its present condition of vulnerability, since the U.S. has proved unwilling, or unable, to bridge many of the existing gaps in the field of technological cooperation. It would be well to remember that due to its present stage of development, our country requires a certain type of technology that our own resources are still unable to provide. Looking at the problem from another angle, it might more precisely be said that the viability of maintaining our industrial development is directly related to the acquisition and use of that technology. To cancel or even delay our development [Page 155] would be to emphasize the social injustice that is this country’s main problem. It would mean to submit ourselves to tensions that would compromise the proper functioning of all our national institutions, including the political system as a whole. On the other hand, everything that favors and allows the continuation and expansion of economic development, such as reinforcing foreign trade which is an important aspect of our economy, would provide added assurance of achieving our national objectives within a climate of peace and stability. It would also be the means, therefore, that would enable us to contribute, indirectly, to maintaining the stability of the U.S.
24. There have been attempts, in some cases malicious ones, to interpret President Echeverria’s words to the United States Congress as a sign that the dialogue between the two nations has suffered a breach. In the first place, it should be remembered that it has been the U.S. that has neglected fair and just treatment in bilateral relations and has even affected fundamental interests of Mexico with its unilateral decisions. In the second place, however, the true philosophy of the position adopted by the GOM should be sought in President Echeverria’s speech to the Third UNCTAD Meeting. There one finds the basic principles ruling Mexico’s conduct in world affairs, and our concept of what cooperation among nations should be. On that occasion President Echeverria postulated the need for the creation of a Charter of Economic Duties and Rights of States “that would guarantee to every nation the free use of its natural resources, assure stability and justice in the price of raw materials, improve the general conditions under which new technology and financing for development are offered, avoid the use of instruments and economic pressures to impair the sovereignty of states, expressly prohibit intervention by foreign corporations in the domestic affairs of nations, and allow the people of every country to adopt the economic structure most fitted to its needs and to give private property the position dictated by public interest.”
25. In his second annual Government report, President Echeverria stated that, at this stage in its development, what Mexico needed was “to multiply and intensify its relations with all other nations and not forgo any exchange that might favor our evolution.”
26. In addition, while requesting the approval of Congress for the trip he is soon to begin, President Echeverria provided a full explanation of the motives and basis for the trip. He stated: “The future of developing nations depends on their possibility to broaden and modify their traditional links with the great industrial societies. We have an increasingly diversified production and insufficiently exploited human and natural resources. A vast system of reciprocal trade would allow us to accelerate our industrialization, increase the supply of employment, and raise the standard of living of our peoples. At the same time, the [Page 156] more advanced nations will be better able to fulfill the requirements arising from their own progress, such as the supply of food and manufactured goods. If the international economic order is currently undergoing transformation, so too are the internal structures of the different areas of the world. Countries, like ours, which have begun their industrial development, are facing enormous problems that can only be solved by increasing foreign trade. Mexico has a growing need for equipment and technology. To obtain them without decreasing Mexico’s sovereignty and monetary stability, we must acquire knowledge and capital goods that imply no ties of any kind; we must have a real opportunity to select the techniques and procedures that best adapt to our needs and will favor the progress of research within our country. It is the Government’s duty to offer the forces of production a wide range of stimuli and options that can give added impulse to our growth, increase employment opportunities, and consolidate independence. The country’s population growth, together with structural deficiencies in the economy and the insufficient development of our foreign trade, are, in the long run, largely responsible for the low incomes and low employment levels that affect large sectors of our population. We have no desire to obtain any advantages, concessions, or privileges that are not the result of mutually advantageous trade. But we are engaged in a brave struggle, in accordance with the principles of cooperation which are freely accepted by all nations, to achieve access to markets in the great consumer centers, just and stable prices for our products, and trade conditions that take into account the differences arising from Mexico’s present state of development.”
27. In the same speech, President Echeverria referred to a basic point regarding these considerations: “Mexico has its own well-defined political system, born of its experience, and consecrated by its Constitution. The national unity that it has attained makes it possible for Mexico to act today with full maturity on the international scene. It does not fear any type of ideological contagion and respects the way of life adopted by other peoples just as it demands respect for its own way of life.”
28. If many countries that are relatively, even less developed than our own—including some of the Latin American countries—have an active foreign trade policy, it would hardly seem logical for Mexico to fail to accept both its own responsibilities and its proper role in the present-day world. We would also have no difficulty in agreeing with all aspects of this policy.
Summary: Echeverría conveyed his views on U.S. relations with Mexico and Latin America, and on internal Mexican affairs.
Source: [text not declassified]. Secret; [handling restriction not declassified]. Sent to Kissinger under a March 15, 1973, covering memorandum [text not declassified], that noted the paper was received on March 12 and was probably intended “to inform President Nixon what the Government of Mexico’s concerns are so that your [Kissinger’s March 26] meeting with him can start on that level of frankness which Echeverría appreciates and finds useful.” (Ibid.)↩