Foreign Relations of the United States, 1969–1976, Volume E–11, Part 1, Documents on Mexico; Central America; and the Caribbean, 1973–1976

7. Briefing Memorandum From the Assistant Secretary of State for Inter-American Affairs (Kubisch) to Secretary of State Kissinger¹

Washington, October 6, 1973.

Summary Paper on Major Problems in Latin America

Attached is the paper on Latin America which you asked for in the September 27th Staff Meeting.

Since by far the most pressing problem we have is the reformulation and improved execution of our overall policy towards Latin America, I have made a summary treatment of that subject the major part of the paper. I have also covered the other major problems and will be sending you separately—where I have not already done so—further proposals to deal with them.

Your initiative with the Latin American Foreign Ministers in New York yesterday should provide just the right vehicle for the turn-around we so badly need in Latin America.

Attachment

undated.

Table of Contents

LATIN AMERICA: U.S. POLICY AND MAJOR OPERATIONAL PROBLEMS

I. U.S.-Latin American Relations: The Need For A New Conceptual Framework
A. The Historical and Present Concept: Pan Americanism	Page 1
B. The Main Outlines of a New Conceptual Approach	Page 2
II. A New Set of Relationships
A. A New Regional Relationship	Page 5
B. Sub-Regional Relationships	Page 6
C. Bilateral Relations	Page 7
III. New Policy Initiatives
A. A New Approach to Sanctions	Page 8
B. A Policy on Private Investment	Page 9
C. A Development Policy	Page 10
D. A New Policy for Military Relations	Page 10
E. The Conduct of Our Policy	Page 11
IV. Major Operational Problems: The Next Six Months
A. The OAS Reforms	Page 12
B. Cuba	Page 13
C. Panama	Page 13
D. Chile	Page 13
E. Peru	Page 14
F. Argentina	Page 15
G. The Fisheries Disputes	Page 16

LATIN AMERICA: U.S. POLICY AND MAJOR OPERATIONAL PROBLEMS

I. U.S.-Latin American Relations: The Need For A New Conceptual Framework

A. The Historical and Present Concept: Pan Americanism

The concept of Pan Americanism has guided U.S. policy towards the countries of Latin America for over a century. The notion has been of a community of republics, with a common history—a struggle to be independent of Europe—and a common ideal—representative democracy—which would cooperate to build a new order in the Western Hemisphere. Until recently this conceptual framework served us and the Latin Americans well. It provided a philosophical rationale as well as a juridical basis for what was in fact a hegemonic power system with the U.S. at its head.

By and large the Latin Americans acquiesced in having the United States shape the inter-American system. This attitude reflected their own weakness, but also their perception that it was in their interests to have the United States bound to them in a formal system in which they could attempt to inhibit the unilateral use of U.S. power or turn it to their own advantage.

Today we are in a very different world, and the changes have combined to render an inter-American system led by and dependent upon the United States unacceptable to Latin America and, indeed, to us as well.

While this situation was recognized as early as 1969, we have thus far been unable to establish a satisfactory new kind of relationship to replace the old one. The result in the multilateral framework has been to create a vacuum which some Latin American regimes highly critical of U.S. policy have exploited.

The sharp deterioration in multilateral relations has not been paralleled in the bilateral area, our bilateral relations with the majority of Latin American countries being quite satisfactory. Nevertheless, the two kinds of relationship—multilateral and bilateral—obviously interact. The inter-American system provides individual Latin American states with a sounding board for their attacks on us in the case of bilateral conflict. Otherwise friendly states are forced to take sides. The present multilateral relationship also is a vehicle for all the states in the region to press for non-reciprocal U.S. concessions which they could not expect to obtain in a bilateral context.

If we continue to operate with the old multilateral relationship, however, our bilateral relations will suffer. We will be increasingly subjected to a multilateralization of bilateral grievances. We will be increasingly embarrassed because our rhetoric about Pan Americanism will be belied by reality. Failing to see any response to their demands for unilateral U.S. concessions, the Latin Americans will be encouraged to unite around extreme Third World positions in global forums and to participate in economic arrangements inimical to our interests. We will be unable to manage our bilateral relations in isolation from these multilateral developments, and the result will be a spreading political alienation of the countries of the hemisphere.

B. The Main Outlines of a New Conceptual Approach

Latin America and the United States must draw back from their outmoded relationship in order to lay the basis for a more realistic interlocking once the region is stronger and more highly developed.

The shift from a bipolar to a multipolar world can only be transitional as political structures must eventually be adapted to the growing interdependence of nations. In the meantime, states which by themselves are unable to compete with the great powers—the two-military superpowers plus China and Japan—must seek to form blocs with other states in a similar position and with whom they have ties of culture, history, or geography.

Farthest along in Europe, the regional bloc concept is taking hold in Latin America as well. The Latins’ attempt in the 1960s to slavishly imitate Europe and form a common market failed to fulfill the high hopes held out for it because the economies of the area were too fragile and were competitive rather than complementary.

More modest attempts at regional collaboration have been more successful. Subregional efforts at economic union, such as the Andean Pact, the Central American Common Market, and the Caribbean Free Trade Area, have been able to make progress. Perhaps as significant in the long run, the Latins have shown themselves increasingly capable of acting in unison in international politics. The Latin American bloc in international forums is now a regular fixture. The Latins’ custom of caucusing to form a common front vis-à-vis the United States has been institutionalized in CECLA.

The United States attitude toward Latin American regionalism has been ambivalent. We have given economic assistance to the subregional economic groupings. On the other hand, we have expressed misgivings about Latin American political collaboration—e.g., CECLA—because it has been so obviously designed to strengthen the Latins’ hands in dealing with us. We have opposed proposals that a Latin American bloc be institutionalized in the inter-American system.

If we accept the proposition, however, that some such “dumbbell”—always latent in the U.S.-Latin American relationship—is inevitable and, indeed, responds to the deep psychological need of the Latin nations to assert their independence of the U.S., we might wish to make a virtue of necessity. Regionalism of Latin America, and sub-regionalism within Latin America, could serve as the new conceptual basis for relations in the Western Hemisphere.

This “new regionalism” would differ from the old regionalism—Pan Americanism—in that the United States would stand somewhat apart from it—supporting it when possible, dealing with it in a new juridical framework, differing with it on specific issues—but not as a participant on an equal footing with all of the other countries. There would be “linkage” but not 100% membership. The new relationship would not be unlike the one we are seeking to establish with Western Europe.

Such a conceptual framework should afford the United States a number of advantages:

1. The present de facto situation in which confrontations between the United States and the Latin American nations stem from a different perception of interests would be rationalized—would become in a sense de jure. While we would be confronted, as we now are, with a regional, Latin American position on a number of issues, it would be understood that neither we nor the Latin Americans had the obligation to conform our policies. There would be less grounds for recrimination that we were not living up to our obligations under Pan Americanism.

2. We would gain greater flexibility in the conduct of our relations with the rest of the hemisphere. We would have less inhibitions about discriminating among the nations of the hemisphere on the basis of their relative size, development, proximity, and interests. Instead of striving to achieve one lowest-common-denominator type policy for “Latin America,” we would have a more realistic web of policies—bilateral, sub-regional, and regional.

3. We would have a firmer basis for demanding greater reciprocity in our relationships with the other nations of the hemisphere. It should be clearer that an end to the hegemony and paternalism that was associated with Pan Americanism also means the end to a system in which only the United States had “obligations” and “commitments” and all the others had “rights.”

In the long run, such a system should strengthen the nations of Latin America and the Caribbean by fostering self-reliance and a sense of a destiny. Before the end of this century we should see another regional center of political and economic strength in the world, one with which, like Europe, we would deal as equals and have close political and economic ties, and which would be a constructive force for world order.

II. A New Set of Relationships

A. A New Regional Relationship

While much of the confrontation and recrimination which has characterized the inter-American system in recent years revolves around economic issues, at the heart of the problem is a deterioration in our relationships which is political.

There is a growing misunderstanding among the Latin Americans of our motives and our purposes. They continue to expect that we will behave in accordance with the old hegemonic relationship—in its benevolent aspects as well as its—from their point of view—diabolical ones. When we fail to respond to their demands for economic assistance, they see our behavior as denoting a lack of will, a desire to shun them, and perhaps to keep them in a position of economic inferiority and dependence. When we employ sanctions in reaction to bilateral disputes, they see it as a new, more sophisticated form of interventionism.

On our side, we have become increasingly exasperated with the Latins’ seeming failure to appreciate the constraints that are operating on us. We regard their refusal to admit our right to protect our nationals and our interests as unreasonable and immature. In short, we are fed up with the double standard implicit in the old relationship.

We must make an intense effort to bridge this gap. To a significant extent, we cannot expect to remedy the situation in the multilateral framework. Our policies, global and bilateral, must bear much of the burden. There is a need, however, to reform the regional system. We are badly in need of new principles and modalities of cooperation. Such principles would eliminate the worst features of the double standard and place our relations on a more reciprocal basis.

The new “regional” relationship should reflect the conceptual approach indicated in Part I. B above, and we would have to work out the kind of juridical and institutional arrangements which would link Latin America to the U.S.

B. Sub-Regional Relationships

To the extent that there is a growing unity among the other nations of the hemisphere in regard to their interaction with one another—as distinct from a common front vis-à-vis the U.S.—it is taking place at the subregional level.

These attempts at cooperation and integration—the Andean Pact, the Central American Common Market, the Caribbean Common Market—are taking place among countries with similar backgrounds, at similar stages of development, and with a common need for larger specific gravity in the world. These groupings are natural, healthy phenomena. They offer particularly promising opportunities for the United States.

Unlike “Latin America,” these subregional groupings have much more in common than their fear of, or dependence upon, an external big power. The common characteristics of each grouping, and what distinguishes them from one another, should permit the United States to tailor its policies to fit the peculiarities and needs of each group. Thus, instead of trying to shape one foreign policy for the Western Hemisphere—an effort to satisfy the requirements of twenty-five highly diverse nations—we can attempt to have a number of policies which are suited to these emerging subregional coalitions.

We might, for example, decide to try to work out the problems faced by U.S. investors with the Andean Pact—which has developed a troublesome Investment Code—in a quite different way than with a Brazil or a Mexico in which our investments are not giving rise to political problems. In the Caribbean and Central America, our posture is bound to remain somewhat more paternalistic than it should be with the larger South American countries. These smaller nations want it that way and it is in our security interests to preserve a discreet leadership role there. It would be consistent with this posture for our bilateral aid program to concentrate heavily on the Caribbean and Central America, as it has begun to do in recent years.

C. Bilateral Relations

One problem which our preoccupation with a Latin American policy has caused us is that we have tended to think that we have to have one policy that will be suitable for both Barbados and Brazil. One of the virtues of the regionalism approach that I have outlined above is that it would help us keep our bilateral interests in better perspective.

I feel strongly that we must exercise far greater sophistication and discrimination in bilateral relations in the Western Hemisphere than we have in the past. We do this in Europe, giving more emphasis to London, Bonn, and Paris than to other capitals. We should do the same with Brasilia, Buenos Aires, and Mexico City.

[Page 8 of this document is missing.]

[. . . ] economic and foreign policy relations. This deterioration will eventually force us to rescind our sanctions policy, as it exists in the legislation, if we do not wish to gravely damage our broader national interest. To move in this direction sooner will both reduce the foreign policy costs and perhaps give the U.S. some positive bargaining influence.

B. A Policy on Private Investment

Private investment disputes are at the heart of many of our foreign policy problems with Latin America. While unsettled expropriation cases exist in only four Latin American countries, i.e., Chile, Peru, Ecuador, and Cuba, they significantly color the image of the U.S. throughout Latin America. The Latin Americans as a whole view the issue of compensation for long-held properties of natural assets within a very different set of ethical considerations than does the United States and reject recourse to other than national tribunals. In addition, the increasing internationalization of the multinational corporations will make it increasingly difficult in the decades ahead to definitely ascribe specific country nationality to entities with operations in many countries drawing financing, personnel, and expertise from throughout the world.

In the light of the above, the U.S. Government needs to rethink its policies with regard to U.S. private investment in the LDCs and in Latin America in particular. We are currently in a halfway house in which we “encourage” and “protect” U.S. private investment with very little control over the behavior of the investor. This approach gets us the worst of both worlds. We need a new set of rules for U.S. Government-U.S. private investor relations which will give the U.S. Government more flexibility and leverage in dealing with this problem.

Similarly, we need to reach some modus vivendi with the Latins on our mutual rights and obligations vis-à-vis American private investment. In the present situation, in which the Latin approach is based on the Calvo Doctrine, we have almost no recourse to protect our investors save unilateral measures like withholding aid. Both sides need to surrender some part of their sovereignty and find a mechanism for settling investment disputes.

C. A Development Policy

Our trade and aid policies toward Latin America should no longer be based on the “special relationship,” which implies that the United States has some moral obligation, compounded of guilt and fear, to provide hand-outs to Latin America. We should tell the American people and the Congress that the economic development of the Western Hemisphere is in our own self-interest. We should articulate the benefits for us in moving that region of the less-developed world that is farthest along towards achieving modern societies toward that goal.

Our case rests fundamentally on the search for a new world order characterized by peace, interdependence, and prosperity. On a less visionary plane, outside of the developed countries, Latin America is our most important trading partner and the site of the greatest part of our foreign investment. In twenty-five years Latin America may have a population of 600 million. Per capita income will double. The larger nations should have moved into the ranks of the developed countries as defined today and Brazil will enter the club of major powers.

We can and should undertake an action program designed to demonstrate to the Latins that, while we cannot accept some of their more extreme proposals to bind the U.S. into new economic commitments, we do intend to revive our flagging support for their development.

D. A New Policy for Military Relations

Our military approach to the Hemisphere is anachronistic. It is a vestige of cold-war hegemony.

We have a unified theatre command in the Canal Zone whose major purpose appears to be to provide billets for a dozen flag-rank officers. It is completely unnecessary for the defense of the Canal (its alleged primary mission) and its very presence is of questionable legality. It is also a major irritant in our bilateral relations with Panama. SOUTHCOM administers a miniscule military assistance program to Latin America for which the major decisions are made in Washington. The elimination of SOUTHCOM would be a tangible sign to Latin Americans that the U.S. means what it says about non-intervention and an end to hegemony. At present, its removal to the United States is under consideration by the Under Secretaries Committee. This is a less satisfactory solution than disestablishment, and even removal is being fought tooth and nail by the Pentagon.

As part of the unified command approach we have maintained since the early sixties MILGPs in most Latin American countries, even though many of the host nations refuse to recognize them and prefer to deal with service-to-service missions. We should eliminate the MILGPs and move back to the service mission relationship.

Existing congressional ceilings on military grants and sales to Latin America and congressional restrictions on the sale of sophisticated weapons are paternalism at its worst. The Administration should continue to press hard for their elimination from the legislation.

E. The Conduct of Our Policy

U.S. foreign policy has been conducted in recent years with the appearance of a low level of concern for Latin America. This was perhaps inevitable given the imperative of dealing with problems like Vietnam, détente, and the balance of payments crisis.

The term “low profile,” rather than connoting to the Latins a more modest U.S. presence, has come to mean neglect, if not disdain. This has contributed to the spread among Latin Americans of political alienation from the United States. Examples of our believed indifference range from stockpile disposals announced unexpectedly and implemented with minimum consultation to cutbacks in P.L.–480 programs adversely affecting both developmental and humanitarian objectives.

I am convinced that our inability to meet all or even many of the Latins aspirations would be accepted or at least understood if high U.S. officials took the time and effort to consult and dialogue regularly with Latin American leaders on our problems and our actions which affect them. Moreover, I feel that in a number of cases the U.S. can improve the substance of its policy if, instead of being stymied by middle-level officials in the U.S. Government whose natural inclination is to say no to LDC problems, we could have our proposals considered at a high level and with a predisposition to taking some positive steps in Latin America even if it requires some straining to do so.

Finally, perhaps nothing we might do in the next year can have such a positive effect on our relations with the region as your already commenced personal attention to, and public involvement with, Latin American relations.

[Omitted here is discussion of specific operational problems.]

1. Summary: Kubisch provided a study reviewing the state of U.S.–Latin American relations and highlighting the need for a new conceptual framework for policy towards the region.

   Source: National Archives, RG 59, Records of Henry Kissinger, Entry 5403, Lot 78D217, Box 3, Nodis Letters HAK, 1973–1977, Folder 3. Secret; Nodis. Page numbers reflect original pagination. All brackets are in the original except those indicating missing text or text omitted by the editors. No record of the September 27 staff meeting at which Kissinger requested this paper has been found. At an October 5 luncheon in New York honoring Latin American delegations to the UN General Assembly, Kissinger offered a toast inviting the region’s Foreign Ministers to take part in a “new dialogue” with the United States. (Department of State Bulletin, October 29, 1973, pp. 542–543)