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

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

Washington, August 31, 1978

SUBJECT

• U.S. Policy to Argentina

In my last memorandum to you on this subject,² I told you that Vaky had assured me he would keep NSC fully informed as we developed an overall strategy to deal with our deteriorating relationship with Argentina. I regret that this has not been the case. Decisions are beginning to be made by the State Department in a haphazard, uncoordinated manner. I understand that Newsom has approved the licensing of several munition items, and today Christopher’s staff called to inform me that Christopher had approved the sale of two Boeing helicopters for the Argentine army.

I asked Vaky what had happened to our agreement to develop an overall strategy, and he said that he had a strategy, and it was “in his head”. Vaky said that these individual decisions are designed to send positive signals to Argentina, thus improving the atmosphere in our relationship and providing an inducement for Videla to agree to meet with Vaky.

Vaky’s strategy may be correct, but I think there are serious holes in it, and continue to believe very strongly that unless we sit down and develop a paper which sets out a coherent strategy, we will run the risk of having these steps seriously misinterpreted by our domestic audience while at the same time losing potentially significant leverage on the Argentines. For example, when the U.S. business community learns that the Export-Import Bank has, at State Department request, denied issuing a letter of interest on a $270 million sale of hydro-electric equipment,³ while a few weeks later State recommends the issuance of a license for the sale of two Army helicopters and other military equipment,⁴ the President and our policy will look foolishly inconsistent. In other words, while individual decisions may appear right one day, they may (appear to) be inconsistent. Unless we put all the steps together in a logical and coherent strategy which is publicly defensible, we will leave ourselves open to serious and legitimate criticism.

After requesting an accounting of items currently being withheld by the State Department for months, finally Pete Vaky gave me a list, and I am absolutely astounded by the sheer quantity of the trade we have, in effect, embargoed against Argentina.⁵ There are now pending 210 munitions lists license requests, valued at $145 million; 29 Commerce license requests, valued at $31 million; and approximately 11 Export-Import Bank transactions, valued at nearly $600 million. (The latter figure I obtained in the brief which Coleman left with Owen;⁶ the brief indicated that the State Department had estimated that there was $1.25 billion in non-military exports to Argentina being held up for human rights reasons.) The list is so staggering that I am led to wonder just how much U.S. trade world-wide is being held up by the State Department; it may be enough to have a significant impact on our balance of payments. The letter from Harold Brown to Secretary Vance (he sent you a copy at Tab B)⁷ unfortunately does not offer us any guidance. DOD has no strategy, except to open the floodgates.

I believe that there are certain steps that we can take:⁸

—(1) I would send our Ambassador Castro in to see President Videla (or General Viola) to convey a personal message from President Carter of concern about the state of our relationship and a wish that we both take steps to improve that relationship. As a positive gesture, Castro can inform Videla that we have approved licenses for the helicopters and for several other safety-related equipment. He should also state that President Carter would like it if President Videla could receive Ambassador Vaky to discuss ways to improve our relationship in greater detail.

—(2) We approach the Inter-American Commission on Human Rights in an informal way and suggest various formulae which could possibly break the deadlock and secure an agreement from the Argentine Government for an early visit. (Once an agreement is reached, we are in a legitimate position to begin moving on a large share of those items which are currently suspended.)

—(3) In advance of Vaky’s visit, the Export-Import Bank should begin approving several loans which are from our private sector to their private sector. We can justify that by saying that these loans cannot in any way be interpreted as supportive of the Government if they go directly to the private sector.

—(4) The Vaky visit should be more than just atmospherics, although that should be an important element. He should make clear to Videla that we are prepared to move immediately on a large number of items if Videla reaches agreement with the Inter-American Commission on Human Rights and takes several other carefully calibrated steps.

These four steps are actually a rough outline of what a strategy paper should look like. I have drafted a letter at Tab A⁹ which suggests a high-level review of this issue. I recommend that instead of sending it to Secretary Vance you use it as guidance, and that you call Secretary Vance instead.

I don’t believe that a major paper is required, but if State squawks at drafting a paper quickly, I would be prepared to do it.

RECOMMENDATION:

That you call Secretary Vance and urge him to have a paper drafted which sets forth several objectives for an overall strategy.¹⁰

Alternatively, that you send the letter at Tab A.

1. Source: Carter Library, National Security Affairs, Brzezinski Material, Country File, Box 4, Argentina, 1/77–12/78. Confidential. Copies were sent to Owen and Denend. At the top right-hand corner of the first page of the memorandum, Brzezinski wrote: “set up meeting, incl. McGiffert, you, DA, & Vaky ZB.”
2. See Document 86.
3. Reference is to Ex-Im Bank financing of the Allis Chalmers project for the Yacyreta dam. See Document 83.
4. Not found.
5. An unknown hand underlined the second part of this sentence, beginning with “absolutely astounded” and ending with “Argentina.”
6. Not found.
7. Tab B, attached, is printed in Document 87.
8. An unknown hand underlined the phrase “certain steps.”
9. Tab A is attached but not printed.
10. Brzezinski checked the approve option, and wrote “spoke to him” above it. In an August 31 note to Brzezinski, Pastor wrote: “As I was about to send this package across the street, Orfila called and told me that he had just received a phone call from the Argentine Army Chief of Staff that the Army has recommended that General Videla meet with Vice President Mondale in Rome next Monday. I think that is the opportunity that we have been waiting for.” Inderfurth concurred and wrote: “but only if the VP has something to say (e.g. meaning that a coherent strategy on U.S.-Argentine relations has been worked out & agreed to).” (Carter Library, National Security Affairs, Brzezinski Material, Country File, Box 4, Argentina, 1/77–12/78)