Foreign Relations of the United States, 1969–1976, Volume E–11, Part 2, Documents on South America, 1973–1976

306. Telegram 2060 From the Embassy in Peru to the Department of State¹

Lima, March 13, 1975, 2010Z.

2060. Subj: Assistant Secretary Rogers’ Meeting with Prime Minister Morales Bermúdez. Dept Please Pass to Secretary from Assistant Secretary Rogers.

1. Prime Minister Morales Bermúdez received Secretary Rogers for a half-hour visit this morning (March 13) following which PriMin was to proceed immediately to nearby Chaclacayo to participate in President Velasco’s meeting with UN SecGen Waldheim.

2. In his usual well-organized manner Morales Bermúdez proceeded through an agenda covering several topics. He first restated comments which he said he had made yesterday to SecGen Waldheim to effect developed countries “must do more” to help Peru and other LDC’s meet the current world problems of inflation and recession. He said Peru’s raw materials prices have declined, mentioning copper prices particularly, and adding that Chile suffers even more on this account, while prices continue to rise for Peru’s imports of manufacturers, intermediate goods, and foodstuffs. He briefly discussed Peru’s twin efforts to achieve basic structural reforms and economic development. He asked that US do more than in the past to help Peru. He said, as an example, Peru is looking for buyers for its excellent-quality cotton. But he stressed that Peru’s main problem now is to obtain imports at moderate prices. He later said GOP hopes for additional CCC credits to stretch out its repayment schedules for needed commodities.

3. Morales Bermúdez said he was sure FonMin de la Flor had discussed TRA issues, and Secretary Rogers assured him this had been the case. PriMin said that TRA impact will be greater elsewhere in LA than in Peru, but that here, too, USG—both by seeking modifications in TRA and in trade negotiations—could do more to be of assistance to Peru and LDC’s generally. Secretary Rogers discussed our interest in expanded world trade, and importance of the authority provided in TRA to executive branch to participate in the trade negotiations, which could greatly expand trade opportunities for the LDC’s. He assured Morales Bermúdez that USG will take LA views and interests fully into account in its MTN deliberations.

4. Morales Bermúdez then turned to bilateral issues, beginning with Braniff-Aeroperu negotiations. He said he hoped negotiations can be kept at airline-to-airline level, without involving the two governments in confrontation as in the earlier expropriation cases. He considers Braniff-Aeroperu dispute to be a lesser problem (de segundo plano) in our relations, and recommended that the two airlines be encouraged to keep talking, looking toward an equitable solution of their respective claims. Ambassador replied that USG likewise hopes to avoid a confrontation over the civil air issue, and would welcome further airline-to-airline negotiations to help avert such a confrontation. He pointed out that governments are necessarily involved in some respects, since air routes constitute a government’s rights rather than an airline’s rights, and the proposed addition of New York as an Aeroperu access point involves a USG and not merely a Braniff decision. Ambassador said USG hopes to avoid placing restrictions on Aeroperu operations to US, but negotiations have not yet been successful and restrictions may have to be imposed. He emphasized that the two airlines have not even been in contact recently. He and Morales Bermúdez then agreed to ask respective airline representatives to get together promptly to resume talks.

5. Morales Bermúdez then referred to the long-pending request for additional 280 APC’s, expressing GOP hope that they could be funded under the army portion of the $15 million FMS program. He said GOP is in effect paying cash for the initial APC purchase, but added that if USG does not choose to approve the additional request then GOP wants to be informed accordingly so that the army’s portion of the $15 million can be applied to the initial APC purchase or used for alternative purchases. Ambassador called attention to arrival in Peru of some 90 APC’s from initial purchase; Morales Bermúdez acknowledged this and repeated his request re army’s portion of new FMS package. PriMin then stressed that GOP has no aggressive intentions against any of its neighbors, saying emphatically that GOP does not even have any contingency plans for offensive actions (but rather only defensive plans). He said GOP needs more APC-type vehicles to defend its own large territory and its frontiers with five neighbors. He said the APC’s are needed to make up for the virtual total absence of such vehicles in the past.

6. Secretary Rogers said he appreciated receiving these comments. They would be most useful in the planning for a visit by the Secretary. He mentioned that everything was contingent on developments in the Middle East but that if all went well there and a trip to Latin America could then be finally arranged it would be most useful for relations between the two countries. Morales Bermúdez said he concurred fully and would be pleased to take part in the program to be arranged for the Secretary’s visit.

Dean

1. Summary: Rogers and Morales Bermúdez discussed bilateral issues.

   Source: National Archives, RG 59, Central Foreign Policy File, D750089–0247. Confidential. The Peruvian national airline (Aeroperú) and Braniff Airlines had been negotiating the allocation of air routes which would serve as the basis of an agreement between U.S. and Peruvian aeronautical authorities. (Telegram 54642 to Lima, March 11; ibid., [no film number]) On May 31, 1974, the Embassy of Peru requested Department approval for the sale of 280 APCs. (Memo from King to Winship, December 16, 1975; ibid., P760005–1330) Due to crises in Southeast Asia and the Middle East, Kissinger’s visit was postponed until 1976.