300. Telegram From the Department of State to the Embassy in Peru1

33623. Subject: Washington Visit of Peruvian Foreign Minister. Ref: State 25339 (NOTAL).2

Summary: Long meeting between Secretary and Peruvian Foreign Minister focused on: A) general North/South issues—LDC commodity and debt questions, MTN, and LOS; B) OAS; C) regional issues—relations with Chile and Ecuador, access to sea for Bolivia; D) two strong U.S. policy concerns—arms limitations (including re Peru) and human rights (de la Puente urged against over-emphasis on Latin America, in particular against “cornering” Chile); E) Peruvian foreign policy (of peace with neighbors) and internal political situation. Exchange was wide-ranging, frank and cordial. President Carter and Secretary were extended invitations to visit Peru.

1. En route back to Peru through U.S. from official visit to Spain, Peruvian Foreign Minister Jose de la Puente was invited by Secretary to luncheon meeting February 10 (reftel). Also had session with Senate Foreign Relations Committee and called on Vice President.3 Held press [Page 851] conference, which covered by news agencies.4 Left to return to Peru evening February 10.

2. Report on two-hour meeting with Secretary follows. In attendance on Peru side were Foreign Under Secretary Wieland, Ambassador to U.S. Garcia Bedoya, Ambassador to OAS Alvarado, Ambassador to UN Alzamora, three others; on U.S. side, Ambassador-designate to LOS Richardson, Assistant Secretary-designate Todman, Ambassador-designate to OAS McGee, Devine ARA/AND, Einaudi S/P, Frank E. Fuller, Peru Desk.

3. CIEC issues—Secretary started off formal exchange at luncheon by stating that new administration begins with predisposition to engage third world problems actively and constructively. Invited de la Puente’s views on issues facing CIEC.5 Identifying conference as an important opportunity for progress on North/South issues, de la Puente described first 8 months as spent in “serene analysis”—performed with excellent spirit but without much substantive result. Now that new administration in power in U.S., CIEC participants must start in earnest on negotiation of restructuring of market for LDC products, abandoning the commodity-by-commodity approach and evolving instead a “package”—including in particular non-traditional exports and invisibles like transport. No precise details given. Unless complete dialogue begins, scheduled ministerial meeting in April may have to be postponed again.

4. Secretary asked about Peru’s position on Common Fund.6 De la Puente indicated that Common Fund would be just a useless pot of money if serious efforts were not made to restructure individual markets. Frank said that U.S. viewed problem also from perspective of improving markets for individual commodities, but we are faced with a negotiation next month on Common Fund when we have just barely begun a 2-year cycle of negotiations on individual commodities. Common Fund will be first north/south meeting of significance for new Administration and it would be helpful if we could find a way that this first meeting could delay basic decisions until work on individual commodities were completed in UNCTAD framework.

5. Regarding LDC debt, de la Puente said inadequate DC response would annul results of discussion other issues. Later pointed out that [Page 852] debt in LDCS increasingly owed by state entities, not private sector. Change in mix suggests need for application of different standards. Debt issue should be handled on some kind of “global basis” as well as on case-by-case basis favored by DC’s; de la Puente said Peru’s experience with case-by-case negotiations had been favorable as in Paris Club discussions re Peru debt (where then Economic Under Secretary de la Puente worked with then Finance Minister Morales Bermudez). Trade-off there on accommodating debt problem was Peruvian resolution to try to accelerate foreign investment. Frank pointed out that debt problem would grow as most projections show $40 to $50 billion surplus of OPEC countries over the next five years. Since most of this surplus is deposited in institutions in Eurocur. Mkts., US, and Switzerland, international lending would have to continue to increase on a large scale despite fact that many countries, both developed and developing, are close to limits of their debt servicing capacity. Commercial banking sectors and international financial institutions have done most of required intermediation, but there were limits to their potential for future lending. New solutions would have to be found.

6. MTN—Secretary sensed rise in protectionism around world. De la Puente agreed, referring to it re negotiations in Geneva on tropical products7 and also in Lome Agreement.8 Richardson mentioned that trade expansion was vital in resolution of LDC debt problems, and de la Puente returned to theme of need for restructuring market for LDC products.

7. LOSRichardson acknowledged we did not see eye-to-eye with Peru on rights of passage by naval and merchant craft over economic zone (as differentiated from territorial sea). U.S. must make clear to non-aligned what our basic interests are. Then LOS conference participants must remember that they are not rug merchants in a bazaar but have potentiality to become architects of a structure capable of providing for the best interests of all. Point is illustrated by accommodation between freedom of passage over economic zone and recognition of right of coastal state to exploit resources of zone.

8. Regarding deep seabed resources, Richardson and de la Puente agreed on need to establish international authority capable of working with large corporations, which have the needed technology and can raise the needed capital. Would corporations’ participation be on turn-key basis or, as Nigeria had proposed, in joint ventures with coastal state enterprises? Noted that in absence of treaty or in anticipation [Page 853] of one, U.S. Congress might pass unilateral legislation. Financing of authority also an unresolved problem, even with U.S. putting up 20 percent.

9. OAS—Brief exchange held on need for reform of charter and difference in U.S.-Peruvian views.

10. Arms Limitations—Secretary expressed strong administration commitment for U.S. as “world’s leading arms seller” to rethink arms transfer policy with view toward significant overall reduction. Cited as instance refusal by USG to license sale of Kfir to Ecuador and also continuing policy versus sale of advanced equipment in Latin America.9

11. Regarding Peru, while reassured by GOP statements it had no aggressive intentions, Secretary urged leveling off of military acquisitions. De la Puente responded by giving long historical account of Peru’s procurement of Su–22 Soviet fighter-bomber and recent regional tensions.

12. Foreign Minister decried current campaign by parties he did not identify to sharpen for ulterior reasons animosity between Peru and Chile. Referred to traditional abrasions in South America: Argentina-Chile, Chile-Peru, Peru-Ecuador. Went on to affirm how Peru was “surrounded” while Chile had been helped extensively by U.S. Yet maintained that War of the Pacific had not, repeat not, created “feeling of revenge” in Peru (despite popular belief). On other hand, Peru must have sense of security—else would be more prone to provoke neighbors. Now, de la Puente continued, Peru was achieving military equality vis a vis neighbors and so was willing to call for limitations on offensive arms procurement in declaration of Ayacucho. Noted that Trilateral Commission considering arms limitations “meets regularly” (sic).10 In further deliberations of commission, de la Puente felt that U.S. as “world’s largest arms seller” could play constructive role, though precisely how de la Puente did not specify. Later said Peru, having reached “parity” with Chile and Ecuador, would like to stop purchasing more arms and hoped it would not be forced not to stop.

13. Turning to Peru’s procurement of Su–22, he explained PAF wanted only replacement aircraft, had been recommended McDonnel—Douglas A–4 Skyhawk, but had been obliged to negotiate with that company. Its price, terms far too steep. UK and France could not offer appropriate technology or terms. Then USSR came into picture and pushed a “very offensive” aircraft of a sophistication Peru actually [Page 854] did not want. “Tremendous discussion” ensued in GOP whether to take Su–22, and finally decision made to buy. (Foregoing represents interesting variant on sequence of developments as previously understood by US.)

14. With reference to relations with Ecuador, de la Puente said Peru trying to advance Andean Pact integration and joint border development projects. GOP recognized Ecuadorean aspirations to regain access to Amazon and has assured GOE it will try to help (without return of territory). Indeed, when Morales Bermudez met President Geisel last year on the Peru/Brazil border, Morales Bermudez recommended Brazil buy more oil from Ecuador, shipped down Amazon. However, Ecuador Foreign Minister made intemperate speech in General Assembly reinstituting claim to lost territory—largely, de la Puente asserted, for internal political reasons relating to instability of ruling junta.

15. In conclusion, de la Puente emphasized dialogue with neighbors would be pursued at highest level to work toward real and permanent peace. However, to be able to pursue such a dialogue effectively, a country requires “strength in arms”.

16. De la Puente did not raise cut in FMS to Peru for FY 77 (reftel) with Secretary, but did briefly with Todman.11 Foreign Minister minimized economic importance of $10 million reduction but trusted cut was not “a measure against Peru”. De la Puente urged cut be rescinded. No commitment was made.

17. As lunch ended, Secretary and de la Puente exchanged brief informal toasts to meeting frequently in future. De la Puente emphasized he had not come “to seek or reject” but to meet Secretary. Urged Secretary to call him by phone—just a few words might be helpful in “avoiding misunderstandings”.

18. Secretary then took de la Puente to his office, accompanied by Garcia Bedoya, Todman and Fuller, for more private meeting.

19. Internal political situation—de la Puente sketched history of first and second phases of Peruvian Revolution and referred to “great division” in government once leaders (of first phase) began to think they were sole possessors of truth. Lack of unity in government could lead to Peru’s falling to communists. New plan Tupac Amaru designed to reestablish and strengthen unity through slow transfer of power back to people. De la Puente referred to Apra as “one of great resources to control communism”. Apolitical Peruvian people can be effectively organized by skillful party like communists. If economic development of country continues (and opposition is given no economic reason to [Page 855] mobilize against government), national elections could take place in four years—probably of representatives of sector organizations rather than parties.

20. Later, after mentioning that Morales Bermudez was due to retire from active military service in 1978, de la Puente said President “will remain” (beyond retirement)—confirmed in his position by army, with more civilians like de la Puente and Barua in his cabinet.

21. Foreign policy—de la Puente quoted Morales Bermudez as stating “our reality is the hemisphere”, in proposing improvement of relations with neighbors. Good relations also desired with “socialist countries” and “truly non-aligned” countries. De la Puente reported on his attendance at Colombo Non-Aligned Conference last summer and said he was surprised by strength of new moderation among participants (cited specifically Tito, Sadat, Indian Foreign Minister). Extremist countries (Cuba, Algeria) were vocal but their confrontational tactics were ultimately rejected.

22. Human rights—de la Puente conveyed Morales Bermudez’ endorsement of recommendations of Linowitz Report12 and support for strong emphasis on human rights in conduct of foreign policy. Acknowledged Peru has 110 political prisoners. Felt U.S. was now taking positive attitude as “dominant (not dominating) country in hemisphere”, and could obtain results in HR field. However expressed concern regarding over-emphasis of focus on HR situation in Latin America. Example he cited was Chile, which we shouldn’t “corner”, which instead needed outside help so progress made in HR field wouldn’t be undone. Situation in Chile, de la Puente suggested, much better than in Rhodesia and South Africa, where a “race was being destroyed”.

23. Secretary spoke of problems of applying HR principles and later referred to a possible policy combining condemnation by USG of egregious violations of HR while dealing in a quiet way, without spotlight, with others. Todman suggested looking for positive things to be done in a HR country in order to “build to reduce the gap”.

24. Access to sea for Bolivia—Peru’s objectives were peace in the area, integration, and development (specifically a petrochemical project fueled by Bolivian oil down the existing pipeline). A sovereign corridor, as Chile has proposed for Bolivia, was never “an element of peace”, de la Puente maintained, whereas there were several cases of areas of shared sovereignty (proposed by Peru). De la Puente did not cite any [Page 856] specifically. GOB has had to react cautiously to Peruvian proposal, since the Bolivian people preferred it to Chilean proposal which called for transfer to Chile of Bolivian territory in exchange for the corridor. Bolivia’s own proposal, however, “poses complications”, de la Puente said. Chile must now respond to Bolivia; then Peru will be questioned.

25. Bolivians are spoiled children, de la Puente said, thinking that out of a situation of conflict between Chile and Peru a solution to the sea-access problem will emerge. This is simply not true.

26. Peace in area—de la Puente described the militaries of Peru and Chile as now embracing each other while the press describes just the reverse. He asserted “There is no possibility of conflict” between Peru and Chile. Peru simply “cannot waste resources on a 72–hour war”. Furthermore, it “has the planes but no ammunition”.

27. Invitation to visit—at end of private meeting, de la Puente stated that Morales Bermudez had expressed his desire to receive President Carter in Peru with friendship. If President should be touring Latin America, Morales Bermudez invites him to consider visiting Peru—also Secretary.

  1. Source: National Archives, RG 59, Central Foreign Policy File, D770052-0921. Confidential; Immediate; Exdis. Sent for information immediate to Santiago, and for information to La Paz, Quito, the U.S. Mission to the OECD in Paris, USUN, and the U.S. Mission to the EC in Brussels. Drafted by Fuller; cleared by E. Richardson, Tarnoff, and in E and S/S; approved by Todman.
  2. See Document 299.
  3. In a February 11 memorandum to Carter, Mondale reported on his meeting with de la Puente. (Carter Library, National Security Affairs, Staff Material, North/South, Pastor, Country Files, Box 43, Peru, 2/12/77) A record of de la Puente’s session with the SFRC was not found.
  4. For de la Puente’s remarks at the Peruvian embassy, see Karen DeYoung, “Peruvian Finds U.S. ‘Mature,’ Informal,” Washington Post, February 12, 1977, p. A9.
  5. For the U.S. post-mortem of CIEC, see Foreign Relations, 1977–1980, vol. III, Foreign Economic Policy, Document 266.
  6. For the U.S. approach to the UNCTAD common fund meeting, held in Geneva from November 7–December 2, 1977, see Foreign Relations, 1977–1980, vol. III, Foreign Economic Policy, Documents 280, 281, 284, 285, and 286.
  7. A reference to the Tokyo Round of negotiations under the aegis of the GATT.
  8. See footnote 8, Document 239.
  9. For the USG refusal to license the sale of Kfirs to Ecuador, see Documents 265 and 266. For the USG policy regarding sale of “advanced equipment,” see Foreign Relations, 1977–1980, vol. XXVI, Arms Control and Nonproliferation, Documents 259 and 271.
  10. Not further identified.
  11. See footnote 2 above.
  12. A reference to the 1974 report of the Commission on United States-Latin American Relations, chaired by Sol Linowitz. (Lewis H. Diuguid, “Linowitz Unit Bids U.S. End Covert Acts,” Washington Post, October 30, 1974, p. A2)