76. Memorandum of Conversation1


  • 1. The Trade Act
  • 2. The Charter of Economic Rights and Duties of States (CERDS)
  • 3. The Buenos Aires MFM and Cuba



    • Foreign Secretary Emilio Rabasa
    • Ambassador Jose Juan de Olloqui, Ambassador of Mexico to the U.S.
    • Mr. Mario Espinosa de los Reyes, Economic Director, Mexican Foreign Secretariat
  • U.S.

    • The Secretary
    • Mr. William D. Rogers, Assistant Secretary of State for Inter-American Affairs
    • Mr. John T. Dreyfuss, Country Director for Mexico

The Secretary: Well, Emilio, you’ve been beating us half to death for the past few days.

Secretary Rabasa: Not as much as you deserve. We consider your Trade Act to be discriminatory and in violation of a number of international agreements. I have two aide-mémoire to leave with you on the Trade Act. One is an analysis of relevant international agreements that discriminatory provisions of the Trade Act violate and the second more specifically about Mexico’s concern about the Act.

The Secretary: Before we go on with this—What’s it going to lead to? Are you going to go out there and tell the press you delivered an official protest to me?

Secretary Rabasa: No. I’m not using the word “protest.” Just that I delivered two aide-mémoire relating to international agreements the Act violates and Mexico’s specific concerns about discriminatory provisions of the law you approved.

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The Secretary: No one opposed the discriminatory provisions more than I. Don’t say we approved them. Senators Mathias and Kennedy are proposing legislation to change the restrictions about OPEC. We agree with this.

The language used by Echeverria and others about this Act was especially strong. Do you know that Mexico gets three hundred and fifty million dollars of exports included under this law? The law is not without benefit for Mexico. We did fight against the restrictive provisions.

I liked your first statement on the law, but not the second. I’m tired of this constant threat to end the New Dialogue. If Mexico wants to end it, we’ll end it.

Ecuador has a good case against the OPEC restriction. It is ridiculous to apply the OPEC restriction to Ecuador. The OPEC restriction should not apply to Venezuela because it is a member of the OAS, but on strict economic grounds, it does not have such a good case. It has a strong economy and the only case we can make is that it should have a special exemption because it is a member of the hemisphere. But Venezuela’s case is weakened by the battering we get. We are willing to ask for exemptions on the OPEC provision for all countries of the hemisphere.

I don’t like the whole Trade Bill. I don’t like the immigration provision—we would consider this intolerable. I don’t like the special exclusions. India has pointed out to me that eighty-five percent of their exports are excluded. We are willing to get these things changed. You should make a distinction between Governmental and Congressional action, and Congressional action should not be used against us. The U.S. mood is such that it will not react positively to being attacked by foreigners. They’d like me to say “to Hell with all foreigners.” If I told everyone to go to Hell, my popularity would go up another five percent. You must realize that our Congress is getting tough. We are having a difficult time with the Aid Bills. The constant attacks are not helpful.

Secretary Rabasa: Frankly, Henry, I’m not a popular Foreign Minister in Mexico, but I’m trying to be effective rather than popular. I’m trying to be effective for Mexico and for Latin America in general. Statements I make are not an effort to cater to the press or other special interests. Mexico does not attack the U.S. every day and hour as the press would like.

The Secretary: If you attacked us every hour, they’d want you to increase it to every half hour.

Secretary Rabasa: I don’t do this. I’m trying to be an effective Foreign Minister.

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The Secretary: You could be effective by showing sympathy and understanding of us. You’ve really gotten a lot done.

Secretary Rabasa: I’m not guided by what the papers say. I hope to have straight, honest talks with you to see what can really be achieved.

Secretary Kissinger: What did Echeverria say in his statement?—that Mexico’s attendance at Buenos Aires would depend on the outcome of this talk with you? I didn’t know there was to be an outcome.

Secretary Rabasa: We have to talk about Buenos Aires.

Secretary Kissinger: If one or two more Latin American countries make an issue out of attendance at Buenos Aires, I’ll cancel my participation. You convinced me the New Dialogue was a good idea and to have the B.A. meeting. We didn’t think the Dialogue could resolve all of our difficulties in one year, but it has been useful. Some difficulties have been resolved.

Secretary Rabasa: You know that we Latin Americans at Inter-American meetings like to make speeches for the news media. This is not the way to resolve problems. We need an atmosphere like we had at Tlatelolco.

The Secretary: Tlatelolco was one of the best meetings I have seen. Even though they criticized us a lot then, I felt I was working with friends and that we accomplished something. A lot of that was due to you.

Secretary Rabasa: Have you thought of calling the Foreign Ministers of Ecuador and Venezuela—Lucio Paredes and Schacht—and ask them to take their grievances to you at Buenos Aires.

Secretary Kissinger: I sent a message to the President of Ecuador explaining our position and our desire to rectify the exclusions and he was very happy. But then the press got after him again and someone made a decision to deny Ecuador a soft loan at the IDB, and he’s back where he started. I have asked the Venezuelan Foreign Minister to come here so many times it is embarrassing.

Secretary Rabasa: Can I tell the press that I suggested you call the Ecuadorean and Venezuelan Foreign Ministers?

The Secretary: Is Schacht the man to talk to?

Secretary Rabasa: Personally and off the record, I think that Perez is so intent on being the leader in the hemisphere that Schacht does not have a great deal of influence—he does not have a great deal of stature with Perez.

The Secretary: But it is with the Foreign Ministers that I should talk.

Secretary Rabasa: Can I state I asked you to call them and you said you would.

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The Secretary: Say you suggested I call the Foreign Ministers of Ecuador and Venezuela and I said I would send them a message first and then I would be in contact with them.

Secretary Rabasa: You told me you would seek the exclusion of Ecuador and Venezuela from the OPEC provision. Ecuador and Venezuela did not participate in the oil embargo.

The Secretary: There are two questions—the embargo and raising oil prices. But I don’t want to apply the OPEC provision to Ecuador and Venezuela.

Secretary Rabasa: We have problems other than OPEC—Title V of the Act, particularly the part that deals with discriminating against States that form producers’ organizations. Your Constitution and mine provide the right of free association.

The Secretary: Yes, but we have antitrust laws too. When producers organize it’s fine. But when I try to bring consumers together, everybody screams “confrontation.”

Secretary Rabasa: You’re right, but don’t quote me! If we can have producers’ organizations, in my opinion you should have the right to have consumer organizations.

The Secretary (to Mr. Rogers): Is there a restriction on Producer Associations as such?

Mr. Rogers: No, not against associations as such—only if their actions disrupt world trade. As of now, only OPEC falls in this category.

Secretary Rabasa: Can I quote Henry Kissinger on this?

The Secretary: Quote the briefing memo we are giving to the Latin American Ambassadors later this afternoon.

Secretary Rabasa: I am giving you this paper outlining what we think is discriminatory and in violation of Articles of the UN Charter, the UNCTAD Declaration in New Delhi, the OAS Charter, and the Charter of Economic Rights and Duties of States.

The Secretary: You say that to me and all the people I argued with against voting “no” on the Charter will prove that they were right.

Secretary Rabasa: In the article-by-article vote on the Charter you voted for these articles.

This second memo deals specifically with Mexico and is of particular interest to me. You will remember that President Ford at the Tubac-Magdalena meeting said (quoting from memo): “I am happy and greatly satisfied that you have asked a question regarding the new Trade Legislation. This is one piece of legislation which we expect the House of Representatives and the Senate to approve before the year is over. It is legislation which will increase considerably the trade between the United States and Mexico, and will help to balance the deficit in the trade of Mexico with the United States. The Trade Act is some[Page 258]thing on which I have worked hard and long, in order to promote it, and I hope it will be approved by the Senate and the House of Representatives and will undoubtedly contribute to better trade relations between both countries.” The Mexican Government has several preoccupations regarding the Trade Law and the effect it will have on the spirit of what President Ford said, principally, Section 502B (2), excluding from preferential treatment countries participating in agreements made to establish better conditions for the sale of their raw materials. Section 503C (1) relative to the possible exclusion from the preferential system of products which may be deemed sensitive, particularly electronic products, steel products, and particularly Paragraph G, which authorized the President of the United States to designate any other product imported as sensitive within the context of the generalized system of preferences.

Secretary Kissinger (to Mr. Rogers): What is our position on these provisions?

Mr. Rogers: We do not know yet. This is a complicated technical subject that it will take some time to work out. We have a commission working on these problems.

The Secretary: We should instruct the commission to be forthcoming on these things with regard to Mexico.

Secretary Rabasa: I would like a commitment that, as promised under the New Dialogue, there be previous consultation with Mexico before the implementation of any of the provisions that might be harmful to Mexico. Do I have that commitment?

The Secretary: Yes, you can say that.

Secretary Rabasa: Can I announce that?

The Secretary: You can say that we will try to interpret the law in a manner most favorable to Mexico and that we will consult with you prior to taking any actions that might be harmful.

Secretary Rabasa: All of this could be avoided if you would adopt the Charter of Economic Rights and Duties of States. With regard to the Charter, I’m not angry. I hold no grudge against you personally, but I think you did not give enough attention to what for us was a very important matter. You left it in the hands of bureaucrats and people who stuck on words. I won’t mention names—and I’m certainly not speaking of Mr. Rogers. He’s a man who when he says “no” means “no” and when he says “yes” means “yes,” and is very pro-Latin America. I just can’t understand how it fell into the hands of the bureaucrats. Why not Mr. Rogers or Maw or Ingersoll? Why was this put in the hands of Percy, who has been head of a transnational company. This is what hurts me. My concern was why you put it in his hands.

The Secretary: Because I knew about that concern I stayed away from Acapulco and took my vacation in Puerto Rico where it rained every day.

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Secretary Rabasa: You know you are always welcome in Acapulco—and I’ll be there with you. We were not properly taken care of.

The Secretary: Right, I agree. I’ve been raising hell with my people around here. I feel we let you down. We handled it from a purely legal point of view. I’m to blame for not taking full personal charge.

Secretary Rabasa: Mr. Schwebel and your other people stuck on words, they treated it legalistically and not politically. What’s wrong with Article 2?—it provides for payment in the case of nationalization, or if someone wants to make a special arrangement with a Government they can do that. What’s the uproar about? You’ve had no problem with Mexico. We paid for the expropriations in the era of Cardenas. Echeverria has not expropriated anything.

The Secretary: If someone like Algeria had put forth the Charter, we would have killed it long ago, but we let it go this far due to our friendship.

Secretary Rabasa: During our last meeting you told your people to be as cooperative as they could and not to stick on words.

The Secretary: I thought my people were to go as far as they could cooperatively, but they clung to words. In reality, don’t tell Echeverria, but I think it is nonsense. I don’t think the Charter will make any difference, that it will not change anything. Don’t you agree?

Secretary Rabasa: No. It is a framework for cooperation and friendship. What about the future? President Echeverria very much wants an expression of your agreement with the Charter.

The Secretary: Impossible. How can we support it at this point if there are no changes in it? Is there a forum in which it will be renegotiated?

Secretary Rabasa: Yes, it will be reviewed at the UN.

Secretary Kissinger: What are we against, Article 2?

Mr. Rogers: Article 2 and several other things. There is a provision for reparations for the ravages of colonialism.

Secretary Rabasa: That is a bad provision. The big issue is nationalization. There is already adequate coverage of compensation or special arrangements. Mexico has not expropriated anything under Echeverria. I don’t understand what the problem is.

Mr. Rogers: There’s no problem with regard to new investors. They would have to invest under the rules of the game as they exist at the time. The problem is the existing investor—the one already in place. But there’s no problem with Mexico.

The Secretary: What can we reasonably do now?

Secretary Rabasa: Echeverria wants a statement that you will reconsider your vote and we will have negotiations on the Charter.

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The Secretary: If I say that and then there is no substantial change as a result of the negotiations, what good does that do?

Secretary Rabasa: Can I say you promised you would reconsider and we’d negotiate?

The Secretary: I could do that but the problem is that if we couldn’t agree we’d have a mess next September.

Secretary Rabasa: We can arrange things by September. We would handle it, not with bureaucrats, but men of political sensitivity.

The Secretary: Rather than saying that I will reconsider the vote, I would prefer to say that we will discuss the Charter and negotiate to see what might be possible. I don’t believe it’s possible that we can reach agreement. Even if you and I do, can you convince the 77?

Secretary Rabasa: I can try. I think I can. With regard to your opposition to the Charter, I was particularly upset by your lobbying with the Japanese to vote against it. They told me you had put pressure on them.

The Secretary: The Japanese make a habit of going around saying we are putting pressure on them. If we do say we will reconsider, what will it do to the other countries that voted against? We could say we will have consultations with Mexico to see what is possible before the Charter is voted on again.

Secretary Rabasa: I would like to talk about the OAS and the Rio Treaty. The Special Committee concurs with the idea of changing the Rio Treaty to get rid of that absurd provision in Article 18 that requires a ⅔ majority to lift sanctions. They will propose a simple majority. I would like to announce that we are in agreement on this.

The Secretary: If you announce this today, what will you announce in Buenos Aires?

Secretary Rabasa: In the Special Committee of the OAS the United States has already agreed to this. In Buenos Aires we would make the change official. Are you going to do something pertaining to Cuba?

The Secretary: Not before Buenos Aires.

Secretary Rabasa: Vignes has given indications he might not be going to invite Cuba, despite the mandate we gave him.

The Secretary: The mandate was not to invite Cuba, but to consult with the nations of the hemisphere about it.

Secretary Rabasa: He has not consulted me. When he consults you I hope you will say “yes.”

The Secretary: We will not say “yes.” We don’t want Cuba at Buenos Aires. Buenos Aires is to lay the groundwork for Council action on the lifting of sanctions.

Secretary Rabasa: I said at Quito that Venezuela and Colombia would renew relations with Cuba on their own. Venezuela has and Colombia will soon.

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Secretary Kissinger: It’s inevitable. We are not trying to stop the eventual renewal of relations, it’s a matter of timing.

Secretary Rabasa: I think you’re wrong in not establishing relations with Cuba. Venezuela, Panama and others have. Most nations are in favor of renewing relations. You don’t have to consult them. Frankly, Mexico has induced other countries to renew relations with Cuba.

The Secretary: Why don’t you ask Vignes to consult?

Secretary Rabasa: I think he’s backing out.

The Secretary: We prefer no movement on Cuba until after Buenos Aires.

Secretary Rabasa: With regard to the Buenos Aires Meeting, countries should put their complaints before the U.S. at Buenos Aires.

The Secretary: The dialogue cannot prosper if the U.S. is consistently put in the guilty book.

Secretary Rabasa: Should I call Venezuela and Ecuador and tell them to go to the meeting?

The Secretary: I’ll send a message first and will be in touch with them.

Secretary Rabasa: Can I say that?

The Secretary: Yes. What have we each agreed to say? That we would engage in discussions on the Charter to see what could be done. That we would consult with Mexico prior to applying any provisions of the Trade Act that might be harmful and apply the Act as favorably as possible with regard to Mexico, and that I would be in touch with the Foreign Ministers of Ecuador and Venezuela.

Subsequent to this, the Secretary and Rabasa had a private meeting for about 15 minutes.

  1. Summary: Kissinger and Rabasa discussed the Trade Act, the Charter of Economic Rights and Duties of States, and the planned Buenos Aires meeting of the hemisphere’s Foreign Ministers.

    Source: National Archives, RG 59, Central Foreign Policy File, P820123–1140. Confidential; Nodis. Drafted by Dreyfuss on January 18 and approved by Parker Borg in S on January 26. The meeting was held in the Secretary’s office. In telegram 24303 to Mexico City, February 3, the Department transmitted to the Embassy its response to the two aide-mémoire on the Trade Act left by Rabasa with Kissinger on January 14. (Ibid., D750039–0472) In telegram 1062 from Mexico City, February 4, the Embassy suggested changes to the U.S. responses and stated its intention to deliver the aide-mémoire to Rabasa in an upcoming meeting. (Ibid., D750041–0102)