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members of the Latin American free trade tributing to the export earnings of less de- at the 20th session, the representative of the area from the application of temporary meas- veloped countries.
Belgian Government informed the contractures adopted to safeguard the balance of Several countries commended Austria and ing parties that, while conditions in his payments. They stressed the economic dis expressed the hope that the move would serve country were such as to require the conadvantages of such discrimination and urged as an example to other European countries. tinued application of restrictions on certain that it be eliminated.
With respect to restrictions still remaining, products by the expiry of the waiver, BelA scheduled consultation with Chile was Austria announced that their gradual re- gium would not seek an extension of the postponed until the spring of next year to moval will continue,
that global quotas have waiver. He stated that Belgium would notify give the contracting parties an opportunity been instituted for OECD countries with re- these restrictions to the GATT Secretariat to appraise complex new financial develop- spect to all industrial and some agricultural in accordance with established procedures. ments which occurred in that country just products, and that it is intended to extend Several contracting parties expressed conprior to the 20th session.
these quotas to all GATT countries in the cern over the prospect of the continued apnear future.
plication of Belgian restrictions and asked 3. The 1963 consultation arrangements
Since Austria emerged from balance-of- that a working party meet during the session The Committee on Balance of Payments payments difficulties and disinvoked the pro- to examine the situation in greater detail. Restrictions also proposed and the contractvisions of article XII (see section IV(a)) in
In the plenary and working party discusing parties approved consultations to be con
November of 1961, it is under obligation to sions, the United States and other agriculducted in the spring and fall of 1963 with remove all import restrictions inconsistent tural exporting nations expressed
disappointBurma, Chile, Denmark, Finland, Indonesia, with GATT provisions. In this connection, ment that after such a long period, certain Israel, Japan, New Zealand, South Africa, Austria has stated its readiness to enter into import restrictions would remain. The U.S. Turkey, United Arab Republic, and Yugo- consultations with any interested contract- representatives pointed out that tariff conslavia.
ing party on these remaining restrictions. cessions granted to the United States by 4. Expiration of the "hard-core" waiver
the EEC on apples, pears, and hops would be D. GERMAN IMPORT RESTRICTIONS
considered to be impaired if import restricThe contracting parties agreed that the
The contracting parties approved the re- tions on these products were applied beyond validity of the "hard-core" decision of March port of the working party on German import the expiry of the waiver, and that the United 5, 1955, should not be further extended. restrictions, noting that the waiver granted States would have no alternative but to inOnly two contracting parties (Belgium and to the Federal Republic of Germany on May voke the procedures of article XXIII in order Germany) had even made limited use of
30, 1959, of certain obligations under article to redress the balance of benefits and obligathe procedures established in the decision XI of the general agreement, would expire tions under the general agreement. of March 5, 1955, whereby contracting parties at the close of the 20th session. The U.S. emerging from balance-of-payments difficul- delegation and the delegations of several
F. U.S. IMPORT RESTRICTIONS ties could retain restrictions for a temporary other other contracting parties expressed dis
The eighth annual report to the contractperiod, not to exceed 5 years. The U.S. appointment that the Federal Republic in- ing parties was submitted by the United delegation, in suggesting that the "hardtended to retain restrictions on a number of
States under the decision of March 5, 1955, core” decision be permitted to expire upon products beyond the expiry of the waiver, which granted a waiver to the United States its termination date (December 31, 1962), despite the fact that such restrictions would to exempt from the provisions of the GATT noted that the decision contained criteria then be applied in a fashion inconsistent import restrictions maintained under secwhich would be useful if the contracting with the provisions of the general agreement.
tion 22 of the Agricultural Adjustment Act, parties were requested in the future to grant Referring to these restrictions in working as amended. The waiver laid down certain a waiver of a similar nature under article party discussions, the U.S. member stressed reporting requirements on activities under XXV.
that certain of these restrictions fell on section 22 which the annual report is deB. RESIDUAL IMPORT RESTRICTIONS
products, i.e., apples and pears and some signed to meet.
Continued progress toward removal and At the 20th session, the contracting parties agreed to continue notification and examtariff concessions to the United States; and
liberalization of import regulations under that unless these restrictions were to be re- section 22 were indicated in the report. In ination procedures designed to maintain maximum pressure for the removal of quan
moved, the United States appeared to have introducing the report, the U.S. representatitative import restrictions still applied by no alternative to taking action on this prob- tive summarized actions taken during the
year as further evidence of judicious use of some countries in contravention of GATŤ lem under article XXIII of GATT. rules.
The delegate of the Federal Republic the authority granted to regulate certain imThe adequacy of notifications of restric
pointed out that, leaving aside products for ports by both domestic legislation and by which specific dates of liberalization were
GATT. The commitment was also given to tions received from individual contracting
make continuing efforts to relax restrictions parties under these procedures was examined set, the remaining quantitative import re
strictions applied by the Federal Republic still in force as quickly as the situation perby a group of experts in February and May
mitted. 1962. On October 22, the council of repre
related to certain agricultural products, a sentatives reviewed the operation of the ennumber of textile products, and a few ce
The report noted that import restricramics. He stated that the Federal Republic
tions were removed during the year on tung tire arrangement, including consultations
was ready at all times to consult with con- nuts and tung oil. The quota for blue mold which have been held with a number of re
tracting parties about trade problems caused cheese was increased. The report was supstricting countries at the request of the
by these restrictions. He stated also that the plemented orally with announcement of the United States and Uruguay.
Federal Republic would always be willing to rejection, on the basis of an investigation The contracting parties of the 20th session take part in any common action by the con
and report of the U.S. Tariff Commission, of agreed to continue the procedures in their tracting parties toward seeking multilateral a proposal for an import fee on the cotton present form and urged governments to resolutions for certain of the products still
content of textile imports. This action had spond more fully to the invitation to notify under restriction.
been announced subsequent to the prepararestrictions. Lists of restrictions will be reviewed from time to time by the council.
While taking favorable note of the willing- tion of the section 22 report. Currently in The U.S. delegation, noting the value of outstanding problems, a number of the conness of the Federal Republic to consult on force at the end of the period covered, were
import regulations on wheat and wheat the notification procedures, stated that its
tracting parties emphasized that Germany products; cotton, cotton waste, and cotton Government expected to make energetic use of the consultation and complaint procedures bring its import regime into conformity with dairy products,
should take steps on its own initiative to picker lap; peanuts; and certain processed of GATT in dealing with residual restrictions GATT.
The usual working party was organized to adversely affecting U.S. exports.
examine the report. Its examination fol
E. BELGIAN IMPORT RESTRICTIONS C. AUSTRIAN IMPORT RESTRICTIONS
lowed the general lines of earlier meetings
At the 10th session, Belgium was granted with appreciation expressed where quotas Austria took the occasion of this session to
a waiver permitting the application of imannounce a program effective from January
were relaxed, and disappointment where 1, 1963, to reduce the disparity between libport restrictions until December 31, 1963,
progress was not possible (as in the case of some 50 agricultural products, to permit Beleralization actions applicable to countries of gian producers additional time to adjust to
cheddar cheese). Concern was centered, as the Organization for Economic Cooperation import competition. Most of the restric
usual, on dairy products. Also highlighted, and Development (OECD) and those apply- tions concerned have been removed, but a
however, were the new U.S. farm bill and the
proposed dairy stabilization scheme-both of ing to GATT contracting parties, not memfew remain, particularly on fresh fruits and
which were presented as giving promise of bers of the OECD. Under the new program, vegetables.
improved supply management through Austria's liberalization rate for GATT coun- At the 19th session, the Belgian delega- tighter production control. The United tries will amount to some 93 percent of its tion assured the contracting parties that States was urged, both in the working party imports. In making this announcement, the Belgian Government intended to take examination and in plenary session where Austria noted that this extension of liberali- appropriate action so as to remove all quan- the report was also considered, to consider zation was done not only in the interest of a titative import restrictions by December the possibilities of renouncing the waiver at liberal trade policy but as a means of con- 31, 1962, when the waiver expires. However, an early date. Emphasized throughout was the importance of the United States provid- of the NATO Parliamentarians Confer- ferment and economic pressures. Others ing a good example in progress toward trade
ence to bring together United States, have as yet no firm institutional base. liberalization. Latin American, and European capital in
Some are industrially developed, thanks in In closing, the U.S. representative recog- joint ventures in Latin America through from the same countries who sent the mil
large measure to immigrants from Europenized mutual responsibility in the "good ex
the Atlantic Community Group for Latin ample" idea, assured the contracting parties
lions of people that helped build our Nathat the United States would do its share, America--ADELA.
tion-Italy, Germany, England, Spain, and said that careful note had been taken of the
The potential of the enormous creative Portugal. Most are essentially agriculturalviews expressed (including consideration of powers of private enterprise remains yet with too many people working too hard to the possibility of renouncing the waiver), to be harnessed. We must encourage produce too little. and undertook to convey these to appropri- the flow of private investment to Latin
A few Latin American countries boast ate officers of the Government. America through every possible means highly developed educational systems, with
literacy rates comparing favorably to our including investment guarantees, tax incentives to private investors, technical resulting from mass illiteracy and to give
own. Most are struggling to reduce the waste ALLIANCE FOR PROGRESS assistance, as well as loans to build roads, their people the skills so vitally needed for
ports, power facilities, and so forth. Our modern development work. Mr. JAVITS. Mr. President, the cur
Government must be willing to work Some have gone through deep political and rent issue of International Commerce, a
closely with enlightened American busi- social revolutions. Most are now at a preweekly publication of the U.S. Department of Commerce, contains a series of role of our private sector-business, la
ness enterprise in further expanding the revolutionary stage, bent on massive change, excellent articles on the Alliance for bor, universities, individuals—in imple
role of our private sector—business, la- and challenging their own leaders and us to bor, universities, individuals—in imple, a minimum of violence. But changes they
help them do the job in freedom and with Progress by Teodore Moscoso and Sey- menting the objectives of the foreign aid mour Peyser of the Agency for Interna
want and they will get-either with us, or program in Latin America and elsetional Development, and experts of the
without (and possibly against) us. The man where.
with the hoe will make his voice heard. Department of Commerce and other
I ask unanimous consent to have Government agencies.
DEEP U.S. COMMITMENT printed at this point in the RECORD a There has been much criticism of the series of articles on the Alliance for
Since the early years of our Republic, the series of articles on the Alliance for United States has had a deep and unique Alliance both in the United States and
Progress from the November 4 issue of commitment to the struggle of our fellow in Latin America. Many feel that prog- International Commerce, including one Americans for political independence, ecoress has been limited, that there is much
by Teodore Moscoso and Seymour Pey- nomic growth and social justice. This comduplication and lack of coordination ser.
mitment has been embodied in the Monroe among U.S. Government agencies concerned, that the effort thus far has not were ordered to be printed in the Record, symbolizes the brotherhood of the Western
There being no objection, the articles Doctrine, the Pan American Regional Orga
nization and the good neighbor policy. It evolved into a cooperative effort of all
as follows: the members of the Organization of
Hemisphere—the common interest of the TWO YEARS OF THE ALLIANCE
American peoples for building societies caAmerican States, and so on. As the articles in International Commerce indi- (By Teodoro Moscoso, U.S. Coordinator of pable of providing solutions to popular
the Alliance for Progress) cate, there has been much, though often
But since World War II, none of these poliundramatic, progress since the signing of It is no longer necessary to give a reason
cies have been adequate to deal with the the charter of Punta del Este in 1961.
for discussing the problems of Latin Amer- rapidly growing problems of Latin America.
ica. Events there in the past 3 or 4 years An industrial ferment which began in the Tax and land reform, greater emphasis
have had a powerful impact on the Ameron education, increasing interest among
postwar years—induced in part by the near ican public. The area has moved from U.S. investors, have characterized the be
stagnation of rural economies--- brought new virtual oblivion to the front pages of our
millions of unskilled workers to the burgeonginnings of this great and vital effort.
newspapers. The image of the sleepy Latino, ing cities. One of the major shortcomings of the of the tourist paradise, of the fiesta that
Since the end of the war São Paulo's popU.S. contributions to the Alliance has yields good pictures for home movies, has
ulation has doubled. Mexico City's populabeen the limited role of private enter- radically and rudely changed.
tion increased by 58 percent between 1950
Now we think of Latin America as a hotprise in carrying out the basic objectives
and 1960. City after city has grown, and the bed of Castro communism, of feudal rule of the Alliance. Through the U.S. for
revolution of rising expectations has acceland unreasonable reluctance to go along eign aid program we have done much to with us in policies that we believe are good
erated in the cities. The back windows of provide essential financial support to
some plush apartment houses in Rio de for the region. The trouble is that these
Janeiro open out on a hillside of huts—the ward the building of roads, schools, hos- current notions are just as oversimplified favelas, homes without water, light or sewers. pitals, power stations, the provision of as the superficial romanticism that colored
NO LONGER VALID agricultural credit, and so forth. The our thinking about Latin America in the
The favela dwellers as well as more fortupast. specific investment guarantee program
nate citizens with a social conscience, began has done its part to maintain investor
The one thing that is unquestionably true
to ask "Why?” The answer-because this confidence in the potential of Latin is the simple but immensely meaningful statement President Kennedy made a few
has always been so no longer is good enough, American industry and agriculture. months ago: "I regard Latin America as the
Political and economic thinkers in Latin While our investments in Latin America most critical area in the world today.”
America have understood the seriousness of today remains substantial, $8.5 billion,
the problem for a good many years. The
VARIETY net capital outflow from the United
United Nations Economic Commission for States to Latin America has been lim- today is 19 different countries, with 19 dif
The Latin America with which we deal Latin America proposed comprehensive apited, averaging under $200 million be
proaches to the problems of social and ecotween 1957 and 1961. Since mid-1961, Most of the people speak Spanish. The sinferent sets of problems and opportunities. nomic development in the hemisphere early
in the fifties. there have been, on balance, net inflows gle largest nation-with a third of Latin In 1954, the Latin American countries proto the United States from the region. America's population—Brazil, uses Portu- posed to the United States the establishment Yet U.S. investments in manufacturing guese. But millions of people in these coun- of an inter-American Development Bankout of retained earnings-a major source
tries don't speak either of these languages. a regional equivalent of the World Bank-to of all such investments in less developed Guarani is the Indian language of Para- concentrate on planning and financing the countries have risen in the area.
guay. Quechua and Aymara are the major modernization of Latin America. We said penditures for fixed investments in plant many other dialects are spoken by smaller Nixon trip 4 years later to change our atti,
"no." It took the disastrous events of the languages of the Andean countries, and and equipment also show a relatively groups of indigenous people, most of whom tude. The Bank became a reality in 1960 and well-sustained activity.
do not figure in the money economy and has done a fine job ever since. Without the aid of private enterprise - hardly are aware that they are citizens of The Bank was only a partial answer. In United States, Latin American, and Eu- the countries in which they live.
1958, President Kubitschek of Brazil proropean—the Alliance for Progress can- Some Republics have long traditions of posed a comprehensive program of social not succeed. The senior Senator from constitutional democracy, while others are and economic development under the title
only now emerging from a succession of "Operation Panamerica.” Again, we failed Minnesota [Mr. HUMPHREY] and I are strongman dictatorships. Some have firmly to pick up a plan of action that a Latin Amercosponsoring an effort initiated by and rooted private and public institutions, which ican leader who knew the urgency of the under the direction of a working party need reshaping under the impact of social situation offered us. Another 2 years later,
reacting to the incidents involving the then made it a policy to work with Latin Amer- on involving the people of Latin America Vice President Nixon, we moved ahead an- ican Governments in generating internal directly and intimately in the development other step, with the act of Bogotá, in which sources of financing for government pro- process. we committed ourselves to a major attack on grams rather than seek unproductive budget Special efforts are being made to this end. Latin America's social ills. support from us.
Individual projects in community developBut it was not until 1961 that we faced up An agreement between our Agency for ment are underway in many countries to to the problem in all its complex and deep- International Development and the inter- make the people themselves protagonists in rooted aspects.
nal Revenue Service warrants special men- social, economic, and political development. TOTALLY NEW
tion. The IRS is undertaking not only to In Central America and Panama, the rural The Alliance represents a totally new ap
train Latin American officials in the United mobile health project combines minimum proach to U.S. cooperation with our Latin States, but also to provide technical assist- medical care for 600 villages with community American neighbors. It is not a projection ance on the spot in improving tax adminis- development efforts. The health teams, of the bilateral technical assistance programs tration. Cooperation between AID and IRS made up of local personnel, traveling by jeep, which were initiated during World War II has already achieved some notable results. boat, and muleback, collect a nominal and under the Coordinator of Inter-American Tax administrators from Chile who were voluntary fee of 25 to 50 cents for treatAffairs and continued under point 4. These trained by the IRS were instrumental in ment and cost of medicine; the fees colformer activities were programs designed to increasing that country's revenues under lected are turned over to committees in each transmit technical know-how through dem- existing laws and in bringing two tax evad- community which invest these fees in comonstration projects and training of Latin ers to justice, the first such cases in Chile's munity projects of the villagers' choice. American technicians. history.
The possibilities for involving the people The Alliance calls for major development Landholding problems have also received in their own development under such a efforts by all the Latin American countries more attention than at any time since the project is unlimited, and the response of the in which national and international finan- Latin American wars of independence. people so far has been most encouraging. cial, technical, and moral resources are com- Prior to the signing of the Alliance Charter,
PRIVATE U.S. RESOURCES mitted to attack the causes of economic un- only Mexico, Bolivia, and Venezuela had
On a hemispherewide basis, AID has also derdevelopment, social injustice, and politi- basic agrarian reform legislation. Since its
set in motion programs which harness the cal instability. It is an attempt to change signing, five more countries have adopted
resources of U.S. private enterprise, the the status quo, and to make change itself the laws and started land redistribution schemes.
leading U.S. unions, cooperatives, and volunhallmark of a new way of life.
Five other countries are now studying the tary agencies to work on a people-to-people Under the charter of Punta del Este, the most effective and appropriate method to
basis. primary responsibility for such basic devel- raise both productivity and living standards The Alliance cannot succeed without a opment is placed on the Latin American on the land.
healthy and vigorous private sector in Latin countries themselves. Each country has We do not look on land reform as simply
America. This is so, not for reasons of verbal agreed to improve and strengthen demo- the splitting up of large estates and the
convention, but because our economies prove cratic institutions through the principles distribution of the land to peasants. We
the point pragmatically. An effective marof self-determination of its people, to carry see it as a complex problem. Aside from
ket economy must be created and preserved, out social and economic reform programs changes in landholding patterns and these and the forces of individual initiative aland to accelerate the integration of Latin need not necessarily be changed in every lowed to play their creative role in Latin America, and to provide the bulk-an esti- case-adequate and supervised credit, mar- America as they have in Europe, North mated four-fifths of the total resources keting facilities, technical assistance, and America, and Japan. Thus, Latin American required.
many other elements go into the develop- business must feel that it has a stake in UNEVEN GAINS
ment of a healthy agricultural economy the Alliance, The progress achieved during the 2 years which can produce abundant food for fast- U.S. investment has not been moving into since the charter was signed shows more growing populations.
Latin America at the needed rate, but things action by the Latin Americans in the enact- Perhaps the most fundamental series of are not as bad as some have recently sugment of basic reforms than in the preced
reforms carried out in Latin America dur- gested. U.S. firms and investments are aling half-century. The picture of tax, agrari- ing the past 2 years has been in education, ready playing a role in the development an, administrative, and other reforms is enThe Latin American countries have substan
programs of the Alliance, especially in the couraging. But it is also uneven.
tially increased their budget allocations to key area of manufacturing. Some countries have made giant strides
education and have taken other significant But we are not satisfied. AID has develwhile others have only made superficial ef- steps to develop their nost valuable re- oped a number of programs to assist the forts. In many cases reform laws have been source-people.
private sector play its due role in the deadopted in good faith, but the countries do
All of the hemisphere's resources could velopment effort. These include direct not have the trained administrators and be poured into primary education without
loans; loans to intermediate credit instituspecialists to implement them and make coming to grips with its need for qualified tions; investment guaranties and proposed them effective. engineers, economists, professionals,
tax credits on investments in developing To help the Latin American Governments technicians needed to staff government and
countries. Particularly promising are joint do this job, we assist them in such areas as industry, to draft and execute national plans, ventures of U.S. companies with local businational planning, improved revenue collec- and develop a productive agriculture. Latin nessmen. tion and public administration. To this America has an estimated 50,000 engineers Such joint ventures can be mutually adtechnical assistance we add development and technicians in a population larger than
vantageous to the business partners themloans under terms they can afford. But we our own, while we have over a million and
selves, as well as helpful in knitting closer cannot do the job for them. Only the gov- feel we suffer from a shortage.
ties among the individuals working together ernments of Latin America can bring about In husbanding national and inter-Ameri- in such firms. the basic reforms which, soundly conceived can resources for education under the Alli
LABOR PITCHES IN and implemented, will ultimately help to ance, we are seeking a balance between primake democratic government secure. mary and higher education. In the first
On the labor side, the AFL-CIO has lent Unfortunately, the history of Latin Amer- 2 years of the Alliance, more than 8,000 new its support through the Labor Advisory Comica is full of unhappy experiences with cor- classrooms have been built and teachers
mittee for the Alliance for Progress. Under rupt and irresponsible government, which trained to use them. Nearly 4 million text- its guidance, AID has contracted with the have bred disillusionment and cynicism books have been distributed, often the first
American Institute for Free Labor Developamong the people, especially the youth. books of their kind ever received by the ment to carry out a hemispherewide effort Lack of confidence in their government has children.
to combine United States and Latin Amermade it doubly difficult for Latin Americans We are supporting technical training pro
ican union resources in training democratic
union leaders and developing social projects to modernize. In less than 2 years the Alli- grams for workers in a score of countries, ance could not possibly reverse a trend which ranging from apprenticeship in El Salvador
needed by workers to raise their living
In little more than a year of operations,
the institute has helped establish labor leadwith 60 institutions in Latin America to
er training centers in four countries as well In the 2 years since Punta del Este plan- help prepare the future professional, tech
as a regional training center in Washingning for development has got underway in nical, administrative, academic, and political
ton; it is now setting up centers in seven every member country of the Alliance. Seven leadership of Latin America.
other countries. In the social projects area, countries have submitted blueprints for marshaling their internal resources and effec
Basic reforms and sound public admin
the institute is working with unions in a tively utilizing external assistance. istration of those reforms are essential build
score of countries on housing, cooperative, Tax reforms are underway in 11 Latin ing blocks of the Alliance.
and other activities.
Another area of people-to-people action American countries. In many cases income
is in the field of cooperatives. In collaboraand property taxes are being applied for the The success of the Alliance will depend tion with the Credit Union National Assofirst time in a country's history. We have not only on governmental action but also ciation, a center for training credit union technicians is being set up in Peru and will up the pressure is healthy and welcome. nomic development and foreign aid will be be working with groups in 16 countries to Working with the dedication that people terminated. During the period in which exdevelop credit unions which will provide the connected with this program have displayed ternal assistance is being phased out, private common people of Latin America with the in the first 2 years, i am confident that we investment and private initiative will be means to save and borrow at reasonable shall accomplish what we set out to do. crucial to the continuation of that developrates.
ment. In cooperation with the National Farmers
The U.S. Government, in cooperation with
ROLE OF PRIVATE ENTERPRISE Union, a people-to-people exchange of 75
the Latin American nations, has implemented farm leaders from 6 Latin American coun(By Seymour M, Peyser, Assistant Admin
a number of practical programs to attain tries has been started to provide agricultural
istrator for Development Finance and Pri- these goals.
vate Enterprise, AID) and cooperative leadership training.
COMMUNICATION WITH BUSINESS One program that has given us particular In the minds of the public, the Alliance satisfaction and that has opened up a whole for Progress is often conceived of in terms
Officials in the Agency for International new field for people-to-people participation of dramatic government projects, dams, Development have spoken to thosuands of
businessmen, in the United States and overin the Alliance is the association formed be- roads, harbors, and schools. With atten
seas, to underscore the need and opportunity tween the State of California and Chile, tion focused on large distributions of funds
for increased investment in Latin America. State government and leaders in key sectors by governments, the individual North American or Latin American may be unaware of
We have prepared and distributed almost of California's economic life-especially in agriculture--are doing pioneering work to- the vital role private initiative must play in 30,000 copies of a booklet, “Aid to Business
the Alliance. This challenging endeavor can day. They are exploring the possibility of
(Overseas Investment),” which describes in be successful only if a true synthesis is
nontechnical language all the incentive promaking the accumulated experience and the research and development resources of Caliachieved between government assistance,
grams we have to encourage new investment private investment, and the contributions of
abroad. The continuing demand for addifornia available to Chile, which is confronted with problems and opportunities of voluntary, noncommercial organizations.
tional copies indicates a lively interest and geography, soil, and climate similar to those One of the functions of my office is to meaningful potential for new private investthat California faced long ago. bring the vast resources of private industry ment in Latin America.
PILOT COUNTRY PROJECT Success in these California-Chile ventures into effective participation in the Alliance would undoubtedly lead to other such associ- for Progress. There are four basic reasons
AID has also selected Colombia as a pilot ations between states or regions of the why we are stressing the need for additional country to demonstrate the contribution that United States and our Latin American sister private investment in Latin America.
private participation can make to economic republics under the Alliance. It would be
KNOW-HOW IN PRIVATE INDUSTRY development. The Embassy and the AID another large field for people-to-people ac- First, the attainment of industrial and Mission, together with the Colombian Govtion-for the involvement of individuals in this country and in the Latin American full mobilization of our essential techno- tries of a priority nature that would be
agricultural growth in these nations requires ernment, selected a small number of induscountries in a program that must be rooted
logical and management skills. In general, especially appropriate for private investment. in understanding and cooperation among this know-how-the ability to build and run
Industries chosen were meatpacking, food our peoples, and not just in agreements of a large petrochemical complex or to pro- wood products, and building materials
processing, metal fabricating, lumber and governments.
duce canned and frozen food, for example These industries were identified in the CoALLIANCE TAKING HOLD
is found in private industry.
lombian 10-year development plan as meritToday, more than 2 years after the signing of the Alliance Charter, it is safe to say that accomplished
assist- ing special attention since they show the the Alliance has grown roots. Throughout ance alone. There is not enough money in greatest possibilities for import substitution
and export expansion. Latin America, the housing projects, hosall the public treasures to supply the needed
After identification of these opportunities, pitals, water systems and schools that have capital. The real wealth of the United States been built under its banner are tangible evi
is not in Government, but in the myriad of the U.S. Government has endeavored to dence that it has got underway.
More im- private individuals and companies through- match them with potential American invesportantly, the Alliance has made its impact out
the Nation. It has been estimated that tors. . To this end, full use is made of inon political, economic and social discussion to meet the goals of the Alliance for Prog- dustrial and publications resources of the and conduct in the hemisphere.
ress, each year $300 million in new private Department of Commerce, consultations with investment must flow from the United States
trade associations, banks and management Elections have been held where, without and other industrialized nations to Latin
consulting firms, and ultimately direct conthe influence of Alliance objectives and America,
tact with individual companies. This specharter principles, they might not have been held. Even where unconstitutional changes
Public moneys are, of course, still neces
cial emphasis on Colombia, however, must have occurred, the new rulers are likely to
sary to do those things which only a gov- not be misinterpreted as lack of interest in pledge new elections and support for ecoernment can do-for example, building the other nations; we are eagerly promoting pri
vate investment in all friendly Latin Amernomic and social reform when in the not large infrastructure projects, such as transportation networks and irrigation systems.
ican nations. distant past they could not have cared less.
AID further acts as a catalyst in putting These facilities, while essential to support a This represents the real progress that the Alliance has made. Men and women in Latin
private sector, are not themselves attractive together joint ventures between North America today are arguing about policies and
to private investors. Moreover, government American and Latin American businessmen.
funds are required to provide the social prog- This business community, as well as the programs when in the past they dismissed such subjects as political responsibility, eco
ress projects—the schools and the hospitals. Government, has found it is not only good nomic growth, and social reform as 'ivory But significant industrialization of Latin politics, but also good business to invest in tower debates.
America can be achieved only through ad- ventures in which a substantial equity is ditional infusion of private capital,
held by local partners. Our free system of life and government
Once a businessman decides he may be inprecludes the imposition of social and eco
terested in a certain venture, the U.S. Goynomic change from above. We have to act Third, survival or revival of democratic in- ernment has a series of tools to encourage within the framework of consent, of change stitutions in Latin American nations calls for such investment. through acceptance rather than fiat. This is not only political democracy, but also eco- 1. Investment survey program: Under this a long-term process. But not so long as to nomic democracy. This kind of democracy program the Government can underwrite 50 be endless. I believe that by 1970 much of is secured only when the economic power of percent of the cost of making an investment Latin America will be sustaining its own a nation is diversified and divided between survey-for example, the market research, growth, equipped with the institutions and thousands of individuals, private groups, engineering studies, etc. If the entreprehuman resources to transform itself into a labor unions, and numerous, competing firms. neur goes forward with the investment, he modern society.
Likewise, a meaningful democracy cannot bears the full expense of the survey. OtherBut the job will by no means be finished exist when all economic power is concentrated wise, the Government reimburses him for by 1970. The political, economic and social and under the control of either a few in- one half the cost. transformation of a continent is not ac- dividuals or a monolithic state. Additional This new program was effectively launched complished overnight. What we must seek investments by many companies and private last year with 19 different investment opto provide rapidly is evidence of progress citizens is essential to create this diversifi- portunities in Latin America being investiwhich can sustain the hopes of the people cation of wealth and a more equitable dis- gated by American businessmen. These and thus provide the opportunity to com- tribution of material resources. The input include; for example, a poultry processing plete the long-term task.
of new private capital can also help build an industry in Brazil, a cement plant in coThe impatience with which some of us economic system where businessmen, faced lombia, and a truck and bus factory in Chile. view the realization of this program is some- with aggressive competition, will constantly Furthermore, AID has under consideration times inspired by an excessive sense of panic, strive to offer the consumer an increasing applications for nine more investment suror by unrealistic expectations of what is pos- variety of low-cost, high-quality products. veys in Latin America. sible even in the best circumstances. On Finally, the time will come when the Al- 2. Cooley loan program: A certain perthe other hand, impatience designed to keep liance shall have achieved its goal of eco- centage of the foreign currencies paid to the
United States for sales of surplus agricul- four other applications, amounting to $25 United States can point to, among others, tural commodities have been reserved for million, are under intensive review.
the following contributions: lending to U.S. businesses or their affiliates These then are some of the techniques In 1962 foreign economic assistance comin the purchasing country. Foreign firms which we are using to encourage greater mitments to Latin America amounted to are also eligible if their use of the money participation by the private community in $1,038 million and in the period Januarywill expand markets for U.S. agricultural the Alliance for Progress. Through a pool, June 1963, the total was $545.3 million. It products. These loans are made and repay- ing of all our resources—both public and vastly increased the number of technicians able in local currencies and their maturities private—we may hope to realize the goals and technical services available to support usually run from 5 to 10 years.
envisioned by the Alliance. By mobilizing Latin American development efforts. It coIn fiscal year 1963 alone, the equivalent of their capital and technological know-how
operated in major programs in the commodmore than $4 million in local currencies and by taking advantage of what their Gov- ity field and gave increasing recognition in was lent to 10 private firms for investments ernment can do to help, the American busi- its trade and commercial policies to the probin Latin America in industries such as glass nessman of vision and ingenuity can make
lems and needs of Latin America. manufacturing, tires, and electrical prod- a major contribution to this peaceful revo
TO DISCUSS OAS ROLE ucts. Over $4 million in local currencies is lution in Latin America. still available for loans to private firms in
A major development of the Mexico City Bolivia, Colombia, Ecuador, Paraguay, Peru,
meeting was the designation of Presidents and Uruguay.
SÃO PAULO CONFERENCE-ALLIANCE MEET Is Alberto Lleras Camargo and Juscelino Kubit3. Dollar loans: AID may also make loans
schek to draft recommendations for restrucin dollars to either U.S. or foreign private (By Claude Courand, Director, American
turing the Organization of American States borrowers or joint ventures, if other financ
to enable it to play a more effective role in
Republics Division, OIRE) ing is not available. The interest rates are
promoting the Alliance. Each submitted a
The second annual review of the Alliance generally lower than commercial rates and
report and probably the most interesting dethe maturities longer. Five and one-half for Progress at São Paulo, Brazil, October
bates of the meeting will revolve around their million dollars has been lent to firms in 29-November 15, 1963, may well mark a cru
recommendations. Both reports call for the Brazil for construction of a carbon black cial turning point in this significant pro
organization of a Committee for Inter-Amergram. The importance attached by the
ican Development (CID). Lleras proposes it plant and a synthetic rubber industry.
United States to the meeting is indicated by 4. Development banks: These are inter
as a subcommittee of the IA-ECOSOC, to
function continuously with a full-time chairmediate credit institutions, both govern- President Kennedy's designation of Under
man, an expert full-time staff, and with the ment-owned and private, which have been Secretary of State W. Averell Harriman as
Chairman and Ambassador Teodoro Mos- Committee of Nine as senior technical adfinanced by AID, the World Bank, and other
coso, U.S. Coordinator of the Alliance for visers. It would review development plans international operations. Both dollars and local currencies are available at these de- Progress, as Vice Chairman. Assistant Sec
and actual performance of individual coun
tries, and the general progress of the Alliance velopment banks for loans to private busi- retary of Commerce, Jack Behrman; Assistnessmen. AID and its predecessor agencies sistant Secretary of the Treasury John Bulant Secretary of State Edwin M. Martin; As
as a whole and make recommendations for have made the equivalent of more than $67 litt; and Assistant Secretary of Labor Daniel arately or collectively. Kubitschek is more
improvement to the Alliance countries sepmillion available to development banks in Latin America.
P. Moynihan are alternate U.S. representa- critical than Lleras, particularly regarding
tives to the Conference. Legislators repre5. Specific risk guarantees: This is the
external aid and suggests that the committee oldest and the best known incentive prosenting both political parties and both
control the allocation of funds. The authorHouses of Congress will be advisers to the gram. It permits the Government of the
ity to be vested in such a committee, if favorU.S. delegation. United States to insure American investors
able action is taken, may well be one of the
The São Paulo Conference brings together thorniest problems of the meeting. against the political risks of expropriation, inconvertibility of currency, and war dam- high-level officials from the 20 Alliance for
Another major topic will be the significant ages. One hundred and thirty-seven guar- will analyze the performance of each mem
Progress member nations. The Conference developments in foreign trade related paranties, covering more than $270 million, have
ticularly to the basic export products. There been issued for new investments in Latin
ber country during the past year and make has been an improvement in prices during America and the program is growing rapidly; ahead. Problems of Latin America in the
recommendations for action in the year the past year, with coffee the major excepPresently pending before the Agency are 771
tion. However, the International Coffee trade and commodity field are high on the applications for guaranties worth almost $3
Agreement has had a sufficient psychological billion for new investments in that region. ministerial level will be preceded by 10 days
agenda. The weeklong Conference at the impact to slow the downward trend and In the last 10 months alone, the Agency has
there is a feeling that constructive action has received applications for about $1 billion in health, housing, community development, restrictive policies of EEC, particularly in of meetings of experts in such fields as
been taken. There is great concern over the guaranties for additional investments in Latin America.
land reform, tax reform, and incentives to agriculture and in the relations of the EuBefore these specific risks guarantees can the private sector.
ropean countries with trading partners in be issued for investments in any nation, the
Meetings at the expert level began on Oc- Africa. A great deal of interest will be
tober 29. The U.S. delegation to these meethost country must have made suitable ar
manifested in the United Nations Conference ings is headed by William D. Rogers, Deputy on Trade and Development to be held early rangements with the U.S. Government to
U.S. Coordinator for the Alliance for Prog- next year. The Latin American countries implement the program. In the last year, the geographic scope of this program has ress. Assistant Secretary of Commerce Behr
regard this as an ideal forum in which to man and Assistant Secretary of Labor Moynibeen considerably expanded. Three impor
urge the developed countries to provide more tant Latin American nations-Colombia,
han will be part of that delegation and re- favorable treatment to less developed counVenezuela, and Argentina-recently agreed the ministerial sessions.
main in São Paulo to join the delegation to tries by reducing tariff and nontariff barto implement the full guarantee program.
riers. The guarantees against inconvertibility of
STUDY PROGRESS PACE
REGIONAL INTEGRATION currency are now available in 17 Latin Amer- The agenda for the meeting was largely de- The third significant topic will be the imican nations, those covering expropriation termined by the action taken at the first an- portance of regional integration in expandin 15 of these nations, and the war risk guar- nual review in Mexico City in October 1962. ing the market for Latin American products. antees in 7.
The dominant theme again will be that the While the Central American Common Mar6. Extended risk guarantees. These guar rate of progress in the social and economic ket has made substantial progress and trade antees are available for high priority private fields has been much too slow. One of the within the area has expanded substantially, investments and cover not only political important determinations made at Punta del the record to date of the Latin American risks, but also all commercial risks except Este was that each member of the Alliance Free Trade Association is more modest. In fraud or misconduct on the part of the in- should submit a report at the annual meet- the latter area particularly there is growing vestor. An extended risk guarantee may be ings showing the extent to which it has met recognition that diversification in exports given to cover up to 75 percent of a loan or its commitments.
is essential to achieve substantial economic 50 percent of an equity investment.
The United States for the first time has growth. Industrial growth can be accelerated 7. Latin American housing guarantees. submitted a report that sets forth total U.S. appreciably only by emancipation from the This is a special guarantee program to efforts in support of the Alliance. It places restrictive limitations of internal markets. encourage private
private investment in self- major emphasis on the role of AID, but also Exports of semimanufactures and manuliquidating pilot housing projects in Latin points out the significant contributions of factures to LAFTA members is regarded by America comparable to those insured by the the Departments of Agriculture, Commerce, the more progressive planners as a prelude Federal Housing Authority within the United Treasury, Health, Education, and Welfare, to increased efficiency and competitiveness, States. These guarantees protect the in- Labor, Defense, and the Bureau of the leading to entrance into world markets. vestor against all risks except fraud or mis- Budget, Bureau of Public Roads, Federal This type of program can only advance, howconduct by the investor.
Housing Administration, Export-Import ever, if there is general acceptance of the Seven of the guarantees, totaling over Bank, and the Peace Corps. Through the need to lower the protective walls that now $33 million, have already been issued and coordinated efforts of these agencies the safeguard uneconomic high-cost industries.