14. Telegram 1100 From the Embassy in Argentina to the Embassy in Brazil1

1100. Brasilia for ARA Asst Secy Kubisch from Krebs. Subject: Kubisch/Vignes MemCon: Cuban Denial Policy.

1. Summary. Asst Secretary Kubisch told FonMin Vignes that potential sales by Argentine subsidiaries of US firms to Cuba has raised very serious problem for USG. He asked Vignes whether, in light of foregoing, GOA might be disposed to consider alternative procedures in order to prevent this problem from doing damage to our overall bilateral relations at a time when latter are entering new and promising phase. Vignes said GOA problem is that firms are located in Argentina and operate under Argentine law and GOA cannot allow either home governments or company headquarters to dictate policy. He agreed on desirability of exploring other possibilities and said that matter could have been resolved much more easily if it were not for extensive publicity to date. End summary.

2. Meeting took place 12:30–1:30 Feb 11 in FonMin Vignes’ office. Beside Kubisch and Vignes, participating were Argentine Undersecretary Foreign Affairs Carasales, Ambassador Hill, Minister Krebs and Mr Eaton.

3. At close of discussion on possible change in USG posture regarding Cuba and how that subject might be treated at FonMins meeting in Mexico, Kubisch recalled that nearly 10 months have elapsed since Argentina re-established relations with Cuba and asked Vignes how relations developing. Vignes replied “very well”, that Cuban representatives behaving and Cuba is a good trade partner because it pays promptly. Kubisch asked how Cubans were paying. Vignes said that GOA believes it can discount credit documents in Switzerland. Vignes went on to describe credit line as totalling $1200 million at $200 million per year exclusively for purchases of specified classes of Argentine manufactured goods, principally vehicles, tractors, heavy equipment.

4. Kubisch said the possible participation in this trade by US subsidiaries located in Argentina raises very serious problem for USG, not only in that it would establish a precedent for other countries but in [Page 47]that it would affect our compliance with OAS sanctions and would jeopardize the stand we have taken throughout the world. To Vignes’ observation that Canadians are selling to Cuba, Kubisch replied these are wholly Canadian firms. Vignes countered that the firms involved here are established and operating under Argentine law.

5. Kubisch said if Argentina is determined to proceed with these sales, it will create a serious problem both for the US subsidiaries and for the USG. We would like to know whether Argentina intends to go ahead in the light of the foregoing and of the effect it would undoubtedly have on our bilateral relations at this juncture. Vignes said he had been told yesterday that there would be no problem for the firms and turned to Carasales, who nodded confirmation. (Comment. This may have referred to allegations appearing in local press, presumably based on so-called “inside information”, to the effect that USG would grant waivers. End comment.)

6. Vignes went on to say that problem is much more serious for Argentina because it cannot allow each country or each company headquarters to dictate Argentine commercial policy. He cited Fiat case as an example; company headquarters had approached GOA seeking relief for local subsidiary on supplying Cuba as the company wished to have the Italian parent company do business with Cuba.

7. Kubisch asked whether there might be some alternative procedure, such as arranging the sale through “third party”. Vignes replied “this will have to work itself out. We cannot allow this issue to become an element of discord”. At the same time he stated firmly that Argentina must be in position to set its own commercial policy and he asked if Kubisch could agree with this formulation. Kubisch concurred that the firms involved are Argentine firms and that we would hope to explore other possibilities and that we too wished to avoid having this damage US/Argentine relations.

8. Concluding the discussion, Vignes observed that the whole matter could have been resolved a great deal more easily except for the fact that it has been extensively publicized over these past months.

Hill
  1. Summary: In a meeting with Vignes, Kubisch noted that possible sales to Cuba by U.S. firms in Argentina had created a problem for the U.S. Government and wondered if the Argentine Government might consider alternative policies.

    Source: National Archives, RG 59, Central Foreign Policy File, [no film number]. Confidential; Immediate. Kubisch traveled to Brasília after his February 10–11 stop in Buenos Aires. Repeated to the Department.