Foreign Relations of the United States, 1977–1980 Volume XXIV, South America; Latin America Region

29. Memorandum From Robert Pastor of the National Security Council Staff to the President’s Assistant for National Security Affairs (Brzezinski)¹

Washington, May 8, 1978

SUBJECT

• Beyond Panama: A PRC on Latin America/Caribbean?

The most difficult and important issue in inter-American relations—the Canal Treaty—is now behind us. Your question² whether a PRC meeting on Latin America/Caribbean (LAC) would be a useful way to take stock of where we’ve come and chart a course for the next year(s) is timely. The President’s trip to Panama³ provides us the perfect opportunity to set in motion the next steps in our policy.

In this memo, I propose to summarize what we have achieved in the last 16 months, analyze where we have failed, and suggest those areas where we should begin to work. In the final part, I will make some recommendations on the next steps we should take.

I. The First Sixteen Months: What Was Achieved

I think we can take great pride in the accomplishments of the Carter Administration in its policies to Latin America and the Caribbean. Indeed, it wouldn’t hurt to get the President out talking about it since there are few regions where we have done more or been as successful. At Tab A is a brief summary which I prepared describing these accomplishments.⁴

II. Our Failures

There is no question that the major area of failure for the Carter Administration is in the economic area, and it threatens to undermine our success primarily because it is this area which is of highest priority to LAC.⁵ Though some might argue that our most serious problem is lack of progress in the North-South dialogue, I would disagree. We have been criticized most vigorously not for what we have failed to do, but for what we have done. Specifically, the decisions which hurt include: the doubling of the duty on sugar; the support of legislation to dispose of 50,000 tons of tin; the failure by Congress to appropriate funds for the International Development Banks as pledged by the USG; the failure to significantly increase the proportion of meat quotas for the Latin American meat producers (as opposed to Australia and New Zealand); and the decision to countervail against export subsidies by Brazil. These decisions do not seem terribly important to us, but each has provoked a bitter response in Latin America, and they have a cumulative effect.

Previous administrations have, at times, analyzed similar decisions and established coordinating and monitoring devices to prevent such adverse decisions, but these mechanisms have proven ineffective and naive. The problem is that, at times, other interests—either domestic or diplomatic—do prevail and sometimes should prevail. Perhaps, all we can reach for is a deeper understanding and sensitivity to the likely impact of such decisions on LAC by people like yourself, Stu Eizenstat, Secretary Vance, Bob Strauss, etc. Perhaps the mechanism warrants another examination.

In the other North-South economic issues—the Common Fund, development bank replenishment, trade policy, etc.—progress has been slow and our position exceedingly cautious.

III. Opportunities Lost or Not Yet Taken

Let me suggest four areas where we should focus our attention:

(1) Consultations on Global Issues

In my opinion, the one achievement in the first 16 months with the greatest potential importance is the decision to view Latin America in a global as opposed to a regional context. But “globalism”—as a strategic approach to eliciting support and advice from the hemisphere’s leaders in addressing global problems—has scarcely been explored, though there have recently been a few excursions into this new area. My memo on gaining Latin American support in the NAM as a way to pressure Cuba is one such excursion.⁶ Another example is the amount of time and effort the President spent with Perez and Geisel on issues like Africa and the Middle East.⁷

The strategy of extensive consultations on a wide range of issues is based on the premise that we will increasingly need Latin America’s support for a wide assortment of issues—not just North-South issues, but also East-West, African, non-proliferation, etc. To obtain support for positions we consider important, however, we need to be prepared to be forthcoming on issues which they deem important. One could distinguish between the input and the output parts of consultation:

—Input. We need to not only touch base, but to solicit reactions and be genuinely prepared to alter our position if a reasonable case is made.

—Output. Once our decision is made, we should be sensitive to informing the governments, to solicit their reaction, and if possible, their support.

Organizational Problems. State should be asked to prepare a paper explaining how it would organize itself internally to undertake a large number of consultations with a great many governments on a great many issues not always the responsibility of the area. ARA is not only unable to deal with this approach, but there seems little interest in exploring it. Of course, the strategy is as important as the organization, and I would recommend that the PRC discuss both within the context of the other issues considered below. In addition, a thorough review of the North-South economic issues of bilateral and multilateral concern to Latin America is an essential element in our overall review.

(2) A Fast-Disbursing Balance of Payment Support Fund

In the past 16 months, we have had to stand defenseless, unable to respond to a problem which keeps repeating and threatening to get worse. As a result of the leap in petroleum and food prices in 1973 and 1974 and a decline in concessional assistance to the LAC, the region is falling under a more and more severe debt burden. Peru, Jamaica, Bolivia, and Guyana are the worst cases now, but most of the countries in the region suffer from varying degrees of the problem.

We have found ourselves totally unable to respond since our aid instruments have been phased down and out. The problem becomes a doubly troublesome one when the governments are democratic or are trying to become democratic. Then, inevitably, people question the sincerity of our human rights policy—why we fail to follow our words with dollars.

There are several options available to us including: an expansion of security supporting assistance to the region; creation of a new fund for democratization, financed by aid re-flows (which currently exceed aid loans to the region); or an expansion of Treasury’s Exchange Stabilization Fund.

(3) Arms Sales and Restraint

We have a two-edged problem in this area as well. On the one hand, we will not have any military relations with Brazil, Argentina, Guatemala and Chile as of October 1978. In effect, we will have a total arms embargo with these countries, which is really unprecedented in relations between allies. Obviously, DOD is having fits about this prospect, and they have a point. Of course, any change in military relations with these countries would require new legislation, and that is not likely to be easy.

We need to simultaneously approach this problem from a different direction: we need to seek support for an arms restraint agreement in the region. We have held discussions with the Venezuelans, and they are extremely enthusiastic. Perez asked us for detailed papers, and we have forwarded them to him. He, in turn, has asked that we undertake simultaneous discussions with arms suppliers.⁸ In another two weeks, we’ll be in a position to evaluate the chances of moving towards a genuine arms restraint program for the region which would be as unique as the Treaty of Tlatelolco is for nuclear weapons.

(4) Caribbean

Since the December meeting at the World Bank establishing the Caribbean Group, the Bank has been preparing papers for the May 26 Donors Meeting and the June 20 meeting of the Group. The Bank’s analysis of the economic problems of the region and its recommendations for ways to raise the level of structural and human development are excellent, and the USG will have to make some hard decisions between now and then. In particular, the Bank has drawn up two proposals:

(a) A Caribbean Development Facility for channelling $125 million annually for three years to the region to serve as local counterpart costs for projects financed by the Development Banks. With rigorous stabilization programs, most countries have had to sharply curtail their investment programs, and this facility would enable them to continue these programs.

(b) A Caribbean Technical Assistance Fund (about $12 million/per year) to develop regional project proposals.

In addition, it is necessary to develop a strategy of consultation with other governments to insure that our goals in the Caribbean are shared and the proposals can be implemented.

IV. Next Steps

I have focused on four issues not because I believe they are exhaustive, but because I think they represent areas worth pursuing at this time. In particular, each of these areas contain initiatives for the U.S. to take in tandem with the other leaders—particularly the democratic ones—in the hemisphere.

Torrijos has invited the Presidents of Venezuela, Colombia, Costa Rica, and Jamaica to Panama for the ratification ceremony, and President Carter will have a 1–2 hour meeting with these Presidents there.⁹ That seems like a perfect opportunity to discuss these issues and try to obtain a common view.

If I had to circle a theme for the correct approach to Latin America in the next 16 months, it is that Latin American nations are important actors in the world. We need to demonstrate our respect and responsiveness to gain their cooperation in dealing with the global problems which face all of us.

The President should reiterate this theme in his speech in Panama.¹⁰ (The main thrust of the speech should be to place the Canal Treaties in the context of his other foreign policy accomplishments in the hemisphere. I will prepare a suggested outline for you this week.) But instead of just having the President state this theme and our position and goals on the four issues outlined above, it would be appropriate and extremely effective if we could translate our positions into a Declaration of Panama, which could be issued by the five democratic leaders at the ratification ceremony.¹¹ That would embody in a document the theme of a multilateral, cooperative approach. For too long, the President of the U.S. has been asked to state his policy to Latin America. When President Carter stated his approach last year and explained why it no longer made sense for the U.S. to have a policy, few understood what he was saying. The way to get the message of multilateralism and globalism across is to issue a multilateral statement. And there is no more legitimate vehicle than the five Democratic Presidents invited to Panama. This idea also dovetails with Hamilton’s desire to turn the Panama ceremony to our advantage, underscoring the new era which the Treaties will bring.

The PRC should consider policy options for each of the four issues described above. To permit us sufficient time to consult with the Five to gain their support for our positions and to negotiate a “Declaration of Panama”, a PRC meeting should be held by the third week in May.¹²

We may also want to consider at the PRC meeting whether the USG should support Panama’s request that the O.A.S. move its headquarters to the area near the Canal. I think the idea is ripe, but I know there are many in State who prefer the status quo. Therefore, a position paper would be in order.

RECOMMENDATION:

If you approve, I will draft a PRM which follows the outline of this memo, consult with ARA, and forward it to you for signature as soon as possible.¹³

1. Source: Carter Library, National Security Council, Institutional Files, 1977–1980, Box 38, PRM–17 [2]. No classification marking. Copies were sent to Erb, Mathews, and Denend. Inderfurth and Hunter initialed the memorandum. At the top of the memorandum, Brzezinski wrote: “Good memo base PRC discussion. ZB.”
2. Not found.
3. June 16 and 17. See footnote 4, Document 25.
4. Tab A, an undated paper entitled “The First Sixteen Months: What Was Achieved,” is attached but not printed.
5. Hunter highlighted this sentence and wrote in the left-hand margin, “agree! RH.”
6. Dated February 28. Pastor wrote, “I think we should begin communicating with receptive or potentially receptive members of the non-aligned in an effort to influence the direction of the non-aligned conference. We should brief them on events in the Horn and encourage skepticism about whether Cuba can realistically consider itself non-aligned when it is fighting the Soviet Union’s wars.” (Carter Library, National Security Affairs, Brzezinski Material, Country File, Box 45, Latin America, 12/77–7/78)
7. See Documents 345 and 172.
8. Not found.
9. See Document 30.
10. June 16. See Foreign Relations, 1977–1980, vol. XXIX, Panama, footnote 2, Document 185.
11. A “Declaration of Panama” was not made. On June 17, the leaders of Colombia, Costa Rica, Venezuela, Jamaica, Panama, and the United States made a multilateral statement, affirming that they were “determined to build on this example,” a reference to the Panama Canal Treaties, “so that attention can be focused on economic cooperation and integration in order to promote socio-economic development and thereby strengthen soidarity among the peoples of the Americas.” (Department of State Bulletin, July 1978, p. 51) See Foreign Relations, 1977–1980, vol. XXIX, Panama, footnote 3, Document 185.
12. Brzezinski underlined the phrase “held by the third week in May.” No PRC meeting on Panama, Latin America, or the Caribbean took place.
13. Brzezinski checked the approve option. A draft PRM, dated May 12, is in the Carter Library, National Security Affairs, Staff Material, North/South, Pastor, Subject Files, Box 65, PRM–17 (Latin America), 3/15/77–5/78. No final version of the PRM was issued.