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PROGRESS HAS BEEN MADE

year on the average. The peak flow in this ufacturing was very well maintained in the The country reports, and partieularly the period was $125 million in 1960. In 1961 and aggregate, and is probably still relatively reports of the six special committees estab

1962, as shown in table 1, the flow into man. substantial in 1963. lished in Mexico, should reveal that in the second year of the Alliance substantial prog

TABLE 1.-Direct investments in manufacturing in less developed countries ress has been made in the fields of planning

(Millions of dollars; inflows (-)] and project formulation, agricultural development and agrarian reform, fiscal and financial policies and administration, education

Average annual and training, industrial development and fi

Value
addition,

1961

1962 1950–60 1

Decemnancing of the private sector and health pro

ber grams. These reports will reflect the magni

1962 tude and complexity of this ambitious pro

Decem- Decem

Re-
Re-

Re value

ber ber gram. This second meeting should mark a

Capital invested Capital invested Capital invested

1950 1960 outflow earn outflow earn outflow earnturning point in revealing the need for em

ings
ings

ings
phasis during the coming year on the eco-
nomic rather than the social aspect of the

Total, less developed counprogram. If this is accompanied by adequate

tries.

793
1, 725

70
83 84
105 152

110

2, 184 recognition of the necessity of involving the private sector in every phase of the program, Latin American Republics,

total 2 ---

726 economic development should accelerate re

1, 499

95 114 100

1,893 markably despite the slow beginning.

Argentina

161 213
4

73

19 404 Brazil...

285 515

29
31 -2

28
10
52

611 INVESTMENT RECORD CITED

Mexico.

133
391
14
16
18

23
13

448
Other.
147 380

13
18
15

8

16 430 Since the earliest phases of the expansion of U.S. enterprises into foreign countries Other Western Hemisphere. 1

21
2

1
1
18
6

47
11
10
1

1 special attention has focused on the coun- Africa 4.

(3)

4
1

15 tries south of us. Of the total invested

Asia 5

55 195

5
10
6
9
16

3

229 abroad up to 1929, nearly half was in Latin America. Though other areas attracted a Philippine Republic --- 23

91
4 -2 -1

1
2

89 India.

16 larger share of new investments after World

12

73 Other..

16
53

4

3
4

67 War II, and depreciating currencies hit especially hard at the value of the Latin American investments, nearly $5 billion was 1 The change in value between 1950 and 1960 reflects not only the annual capital flow and reinvested earnings, added to investments in that area between but

also adjustments, usually downward, to take account of depreciating exchange rates, writeoffs, etc.

2 Excluding Cuba. 1947 and 1957, and they still accounted for

3 Less than $500,000. nearly 30 percent of all direct investments 4 Excluding Republic of South Africa. abroad.

5 Excluding Japan. Since 1957 the rate of growth in Latin NOTE.-Details may not add to totals because of rounding. America has slowed, while it has risen for other areas. By the beginning of 1963, direct

Source: U.S. Department of Commerce, Office of Business Economics. investments in Latin America totaled $8.5 There has been a sharp drop since 1960 nary outlays of the petroleum and mining billion, but this was less than one-quarter of in flows to Brazil, which received 43 percent companies. Unlike capital flows, however, the world total.

of the total capital flow in the previous 10 the total for these expenditures leveled out It is important, however, to look closely years, and flows to Cuba, which had also in the 1959-62 period at a very substantial at the record of the past few years, and been sizable in some years, have been non annual average of over $800 million, and proespecially at the record since the middle of existent since 1958. On the other hand, capi- jections by the companies made early this 1961, to gage accurately the nature and sever tal flows to Argentina and Mexico have risen year indicated that this average would be at ity of the apparent decline in U.S. investment enough to maintain the overall average. least matched in 1963 and 1964. activity in the area.

This means that if it were not for the For manufacturing, the projections made There are several different kinds of statis- dropping out of Brazil and Cuba, the record early this year indicated capital outlays at tics on this subject, each of which can confor capital flows to manufacturing since 1960

a record rate of about $300 million a year tribute to the whole picture. The most fre

would look comparatively good. Moreover, in 1963 and 1964, well over the 1957-62 quently used data are the figures for net investments out of retained earnings have

average. Large continuing outlays are procapital flows between U.S. parent companies also risen, notably in Brazil, so that in 1962 jected by the companies for Argentina, Braand their foreign subsidiaries and branches- U.S. companies added about $200 million to zil, Mexico, and Venezuela. this is the series entering the balance-ofthe value of their manufacturing invest

Plant and equipment expenditures by the payments accounts. A newer statistical

ments in the area. As shown in table 1, this petroleum and mining companies have series, current and projected expenditures for

is a very large share of all manufacturing in weakened considerably over the years since plant and equipment, comes closer to measvestments in less-developed countries.

1957, but are currently at a rate of $400 miluring the full impact of these investments

Turning to capital flows for petroleum in lion. Sizable outlays are being made in on economic development.

vestments, and to a lesser extent for min Argentina, Chile, Colombia, and Peru, as NET CAPITAL OUTFLOW

ing, a dramatic shift shows up from a peak well as $175 to $185 million by the petroleum First, it is necessary to have some perspec- of nearly $1 billion in 1957 to an actual net companies in Venezuela. The maintenance tive on net capital outflows from U.S. com inflow in 1960 and again in 1962. Venezuela of large capital outlays for plant and equippanies to the Latin American Republics. is the country principally affected by the

ment while capital flows are sometimes negaThese spurted immediately after World War changes in the petroleum flow; for the rest

tive requires explanation, and this is proII and then leveled out until the great peak of the region capital flows by this industry vided in part by an analysis of the sources of petroleum investments in 1956–57. In the have been rising slightly. The change in

and uses of funds of the enterprises. first 10 years after the war the annual flow mining flows has affected mainly Chile and

MANUFACTURING DATA averaged about $215 million; in 1956–57, the Venezuela.

Data for the manufacturing enterprises in average was nearly $900 million; for the en

CAPITAL EXPENDITURES STEADY

Latin America controlled in the United States tire period from 1946 through 1957 the flow

In contrast to the variability of capital

show that total funds available, after disaveraged somewhat over $300 million.

tributing dividends, is about one-half billion Since 1957 the rate of flow has declined flows, expenditures for fixed investments in sharply, averaging under $200

dollars annually. Capital flows from the plant and equipment show a relatively wellmillion

United States, undistributed profits, and dethrough 1961. Beginning in the middle of sustained level of activity. Information on 1961, there have been, on balance, net in

preciation charges each contribute about these capital expenditures began with data flows to the United States. For 1962 the net for 1957, as part of integrated statements of

one-fifth of this amount the remainder is inflow was $32 million, and in the first half sources and uses of funds of each foreign

supplied by external sources abroad, probof 1963 about $7 million.

ably largely through increased tax and other affiliate of U.S. companies. The results of

liabilities. About half of the one-half billion Looking more closely at the experience of the most recent study appear in the Survey

dollars available is spent for property, plant, each industry and of individual countries, of Current Business for October, and are

and equipment, and the rest is needed for however, a considerably different picture summarized in table 2.

working capital. Income distributions are emerges.

According to the data supplied by most of $75-85 million annually. In the manufacturing sector, the aggregate the large companies operating in the area, Total sources of funds of the petroleum capital outflow in the whole 1950–61 period plant and equipment expenditures were at a and mining enterprises (after income diswas $800 million, or less than $80 million per record peak in 1957 because of the extraordi tributions) are about of the same magnitude

449

currently, but have been falling since 1957, capital outlays and working capital require also applies in the area of economic integrawhile they are now larger in manufacturing ments.

tion. than at that time. For the mining and

These figures for actual capital expendi The charter of Punta del Este points spepetroleum companies, however, there is a tures for plants and working capital show cifically to the Central American Common relatively small amount made available by

that the total investment activity of U.S. Market (CACM) and the Latin American capital flows from the United States, undis

companies in Latin America is very much Free Trade Association (LAFTA) as the ve

greater than the data on net capital flows tributed profits, or funds obtained abroad.

hicles for broadening of present national alone suggest. Over 70 percent of the capi markets in Latin America, which is essential Depreciation charges are the dominating

tal formation in this region is carried out to accelerate the process of economic develsource of cash flow in these industries.

by the private sector, and U.S. firms un opment in the Hemisphere. Using funds from this source, the firms in doubtedly contribute substantially to the One of the major economic forces convolved are able to finance current levels of total.

gealing CACM and LAFTA and a primary

objective of the Alliance is the need of inTABLE 2.- Plant and equipment expenditures of direct foreign investments in Latin America, dustries to produce for a wider and more major industries, 1957-64

diversified market so that increased efi

ciency and better allocation of resources will (Millions of dollars]

result.

The Central American Common Market Area and industry 1957 1958 1959 1960 1961 1 1962 1 1963 2 1964 2

(described in International Commerce, Mar. 18, 1963), comprised of Costa Rica, El Salva

dor, Guatemala, Honduras, and Nicaragua, is Latin America, total 3.

1,687 1,269

1,003
750 795 840

900 834

an achievement which has been sought by Mining and smelting 216 221 147 78

the Central Americans for over 100 years. It 87 95 100

90 Petroleum.

1,039
577
340 306

319 315 310 represents an initial achievement of Alliance Manufacturing

174 202 193 207 250 281 330 288 for Progress goals of increasing trade and Trade. 20 31 31 35 45 46 48

58 Other industries.238 238 183 90 107

stimulating investment. Trade among the 99 107 88

Central American countries, while still small

in absolute terms, has more than doubled 1 Revised. 2 Estimated on the basis of company projections.

between 1958 and 1962. 3 Includes other Western Hemisphere. NOTE.-Detail may not add to totals because of rounding.

U.S. INVESTORS INTERESTED

Potential U.S. investors have shown much Source: U.S. Department of Commerce, Office of Business Economics.

interest in Central America, particularly in PRODUCTION GAINING From the point of view of Latin America,

manufacturing, and a number are already The benefits of this investment effort are therefore, a much greater volume and vari

well established within the areas as a result manifold, in terms of employment, governety of manufacturers is being made avail

of the common market. ment revenues, productivity, etc. One di able than would be if they had to be im

In the public sector, the Central American

Bank was established for the purpose of firect measure currently available is the value ported. of manufacturing production in Latin The general impression that can be de

nancing industrial integration and developAmerica coming from the U.S. affiliated rived from the figures is that investment

ment in Central America. The U.S. Agency plants, as shown in table 3. Growth activity by U.S. companies in Latin America

for International Development (AID) inihas clearly been substantial and quite

is being very well sustained by comparison tially committed $10 million to the Bank's steady, although there have been some tem with any earlier period except the huge tem

capitalization. Each of the participating porary setbacks, as in Argentina in 1962, porary bulge in 1956–57. On the other countries contributed $4 million each. Furwhen local conditions are depressed or dis hand, the flow is not widely distributed

ther Alliance for Progress assistance has been turbed. among the countries of the area, and can

received by the Central American Bank in Some comparisons are made in the Octo shift quickly as projects are completed or

the form of grants and loans. For example, local conditions become unsettled.

AID made grants of $2 million for industrial ber issue of the Survey of Current Business between exports from the United States and Given the needs of the area for economic

credit and another grant of $1 million to be local manufacture by U.S. companies of development, a considerably larger flow than used for financing general studies. AID has some important commodities. These figures has been experienced over any extended pe

also made a loan of $5 million for industrial

credit. riod in the past could make a highly signifshow a decline of about $500 million in ex

The Inter-American Development ports from the United States since 1957 icant contribution. To restore the share of Bank (IDB) has also participated in the while local production in the area of these Latin America in the total foreign invest

Central American Bank. For example, a $6 items has risen by nearly $11/2 billion. In ment program of U.S. industry, however,

million loan for financing an industrial and the relative attractiveness of the area in

infrastructure development program chemicals, for instance, export sales have

program was fallen off somewhat, but local production terms of growth with stability, security of made in April 1963. In addition, the Central has risen from sales of $500 million in 1957 investment, and expectation of returns, American Bank with assistance from AID, to about $1 billion in 1962. must be greatly enhanced.

is undertaking to prepare a regional transportation plan and industrial surveys.

For their own part, the Central American TABLE 3.-Sales of U.S. direct investment manufacturing affiliates in Latin America, 1957, 1959-62

countries are currently drafting a regional

telecommunications agreement to develop a [Millions of dollars)

Central American communications system.
The World Bank is assisting in this project

and is expected to provide a credit of ap-
1957
1959
1960
1961
1962

proximately $100 million for its implemen

tation. Latin America,1 total...

2, 435 2, 830
3, 770 4,190

ROCAP CREATED
385
Argentina..

426
696
895

865 AID has created the Regional Office for Brazil..

659
764
879
940

1, 125

Central America and Panama (ROCAP) to Mexico.

643
751
770
850

1,020

assist in the coordination of common market Venezuela

268
364
360
390

400
Other..
480

activities at the regional level.
525
475
695

780

The Organization of American States

(OAS) in conjunction with the IDB and the 1 Includes dependencies.

Economic Commission for Latin America Source: U.S. Department of Commerce, Office of Business Economics.

(ECLA) has been providing technical assist

ance through the creation of the Joint PlanECONOMIC INTEGRATION HOPEFUL GOAL OF AL a reception for Latin American diplomats

ning Mission, the task of which is to provide LIANCE IN LATIN AMERICA; COMMON MAR and Members of Congress, March 13, 1961.)

coordination of national development plans

The President's encouragement of regional KET HELPS

at the regional level. economic integration in Latin America as “We must support all economic integration

ECLA has, since 1951, been a prime mover an integral part of the Alliance for Progress which is a genuine step toward larger mar

in fostering the development of the ecowas emphasized in the charter of Punta del kets and greater competitive opportunity. Este signed in August 1961. The Alliance

nomic integration treaties and in the estab

lishment of regional organizations in CenThe fragmentation of Latin American econ. calls for the mutual participation by the tral America. omies is a serious barrier to industrial United States and the Latin American coun

The CACM is not yet an unqualified sucgrowth. Projects such as the Central Amer tries in the economic and social develop

cess and more progress is required for melican common market and free trade areas in ment of the area. This mutual participa lowing the institution. For example, the South America can help to remove these tion not only applies in the areas of housing, Regional System of Integration Industries, obstacles." (Address by President Kennedy at social reforms, and agrarian reforms but which may have the effect of establishing

3,180

monopolies in the isthmus and therefore and encouraging the development of LAFTA. both on real and personal property, comstifling competition, runs counter to Alliance Both organizations have provided experts plemented by a net wealth tax where feaaims in this regard.

in many fields and many studies on economic sible; In addition, despite the combination of integration have been made.

3. The collection of more revenue from the five countries' economies into one mar A further indication that the LAFTA taxes on urban and rural property, additional ket, the Central American market remains countries are desirous of strengthening their to personal income taxes on the income desmall. The population of the area is ap organization was the announcement of a rived from such property, and coordinated proximately 12 million with a combined gross Foreign Ministers meeting, originally sched with other reforms of special taxation of national product of $2.4 billion in 1962. Yet uled for October 1963. This conference, income from property; the association of Panama with the CACM, however, was postponed until 1964. The 4. The strengthening of the system of inwhich would broaden the market and which tentative agenda of the conference deals heritance and gift taxation; was called for in the Declaration of Central with many fundamental questions of 5. The placing of public enterprises on a America in March 1963, was recently post LAFTA's structure and direction.

self-sustaining basis through the adoption poned. This action was reportedly due in Other measures have been taken to im of adequate rates for services rendered; part to the low Panamanian tariff rates and plement the objectives of the Alliance. Of 6. The harmonization of the tax treatthe fear on the part of some Central Amer great potential significance in meeting fluc ment of the income of international enterican businessmen that the Colon Free Trade tuations in the short-term balance of pay- prises, and the imposition of taxes on the Zone would provide escape from the common ments not only of LAFTA and CACM mem income which residents receive from abroad; external tariff for non-Central American mer bers but also other Latin countries is the 7. The creation of a fiscal climate which, chandise.

recently instituted system of compensatory with the cautious use of incentives, will be Nevertheless, while Central America has financing. This project of the International attractive to the formation of private capital been advancing with ever-increasing strides, Monetary Fund will permit the use of IMF

and its investment in productive enterprise; a less ambitious plan for economic unifica funds in cases of payments difficulties pro 8. The reform of budgetary practices and tion in South America, LAFTA, appears to be duced by short-term export shortfalls of the inclusion in budgets of the operating progressing, albeit in halting and at times in member countries. The system will enable results of autonomous agencies; and indecisive steps. The members of LAFTA are the countries to eliminate the more adverse 9. The establishment of an objective and Argentina, Brazil, Chile, Colombia, Ecuador, effects of short-term difficulties and will re coordinated system of tax administration, Mexico, Peru, Paraguay, and Uruguay. (A sult in more orderly development of their using each tax to give more solidity to the description of LAFTA appears in the October economies.

others, so as to guarantee that the benefits 21 issue of International Commerce.)

of substantial reform will not be lost in

PERU PLANNING MEETING It must be remembered that the members

administration.

In the area of planning, a Conference on of LAFTA are as heterogeneous as the Central American countries are homogeneous

NEW LEGAL PROCEDURES Planning and Industrial Development was and the former have no historical back

held in Lima, Peru, in April. This was the Special attention was given to a number of ground of unification as do the latter. The

first meeting of planning authorities of the legal and administrative procedures that need LAFTA treaty provides for eventual free trade

LAFTA countries and as such was limited to be established to enable the beneficial among the member States over a 12-year

largely to the establishment of contacts and ownership of real property and of financial period. But, unlike the Central American

an exposition of the planning institutions of assets to be identified. Thus, compulsory Common Market, there is no provision for a

the nine countries—their organizaton, meth- registration of all real property in the name common external tariff. Nevertheless, the ods, objectives.

of the beneficial owner and the adoption of

In a reference document of the Inter means whereby the ownership and the very creation of LAFTA per se represents

American Economic and Social Council en transfer of securities are comprehensively progress in broadening the Latin market. In the area of trade liberalization many

titled “Regional Economic Integration in the registered with the tax authorities. Under trade barriers have been reduced and certain

Development of Latin America,” by Harvey existing conditions in most of Latin America,

S. Perloff and Romulo Almeida, stress was it is undisputed that a significant strengthshifts in the former trading patterns are discernible, although small. Nevertheless, the placed on the fact the present approaches ening is needed of both the technical and

administrative capacity of the tax enforceoverall trade, both imports and exports,

to economic integration in Latin America among members of the area in relation to

are too timid and inadequate. Emphasis ment authorities. their total trade has remained at approxi

was placed on regional planning and regional Since much of Latin America produces mately 7 percent over the last 3 years. Howdevelopment programs as a means of imple- agricultural income, attention was given to

the administrative problem of calculating ever, it is perhaps too early to make a judg- menting Alliance objectives.

such income for purposes of income taxation. ment as to the ultimate effect of LAFTA on intra-area trade.

TAX REFORM IS MAJOR OBJECTIVE OF ALLIANCE While there was almost universal agreement A future stimulant to intra-Latin Ameri

IN LATIN AMERICA

that some form of presumed income rather can trade was the recent announcement of

The institution of tax reform in most

than actual income had to be used, there of the Latin American countries has been

was a difference of opinion with respect to the Inter-American Development Bank that it was instituting a system of export financ a major objective of the Alliance for Prog- the best way to determine such income. One ing for Latin American capital goods. This ress. It is one that is generally accepted to group, suggested that presumed income should lead to increased area trade in these

should be calculated on the basis of average be a key prerequisite, under the Charter of goods and the Bank has initially allocated Punta del Este, in accelerating the develop- yield of lands with similar characteristics.

Others questioned this method because it $30 million for this purpose. ment process of the Latin American area.

presumed the availability of such information In the investment area, a considerable A special conference on fiscal policy for

and the necessary technicians. It was sugnumber of U.S. businessmen have expressed

the economic development of Latin America interest in manufacturing within the LAFTA

gested, therefore, that some self-assessed was held in Santiago, Chile, in December 1962

valuation of property might be used as a framework. The lack of a common external under the auspices of the joint tax program

measure of presumed farm income. tariff surrounding LAFTA continues to be a of the Organization of American States deterring factor for increased investment.

All were in agreement that the traditional (OAS), the Inter-American Development

taxes in the area include the corporation On the other hand, potential investors are Bank (IDB) and the Economic Commission

income tax, the tax on urban real estate and becoming increasingly aware of the possibil for Latin America (ECLA). There was a full ities of investment within the framework of exchange of views between academic ex

the tax on agricultural property. Consecomplementation agreements. These speperts and those having

quently, an effort must be made to rationalize those having administrative duties. Although general consensus was

the taxation of income from the different cial agreements permit the negotiation of

classes of property. preferential treatment through bilateral or eventually achieved, as reported in UP/G multilateral agreements for the purpose 15/1 Rev., Apr. 18, 1963, OAS-IDB-ECLA

CHANGES TAKING PLACE achieving what are referred to as "vertically joint tax program) the problems were great The Pan American Union reports that integrated industries.” These agreements up and the points of view were not always unan noteworthy changes in tax legislation are to a point may help to reallocate more effi imous. However, its members did agree that taking place throughout Latin America. ciently scarce Latin resources but at the there was need to reform tax laws, demand The reforms being introduced, in general, call same time there is a danger of monopoly ing more from those who have most, to for (a) raising existing tax rates (b) lowcreation and a limitation on competition. punish tax evasion severely, and to redistrib- ering the level of exemptions and (c) taxing There is a sense of urgency among many

ute the national income to benefit those capital gains. They tend to provide exempof the LAFTA members and among those who are most in need.

tions to certain types of investments, or closely associated with the LAFTA move The achievement of these results neces stimulate them in other ways such as adoptment. In a number of documents the need sitated, among other things, a reorganiza- ing a more liberal system of depreciation. for a common external tariff has been tion of the fiscal systems of the Latin Ameri A few examples in countries where tax stressed. Also the tendency for LAFTA mem can countries as these relate to:

reform is practiced: bers to be particularly reluctant to reduce 1. The reform, simplification, and up Ecuador has enacted a new income tax law trade barriers to a meaningful extent has dating of the system of indirect taxation; in 1963. Undistributed corporation profits been emphasized.

2. The creation of a comprehensive unitary are taxed at 20 percent when their activities Both ECLA and the Organization of Amer system of progressive personal income tax, are considered essential for economic growth; ican States have been active in promoting which includes the taxation of capital gains otherwise at 30 percent. Personal income

tax is levied at rates ranging from 10 to 43 and available 1963 data show a further drop of the larger countries in the area, Brazil percent.

in our participation in the area's trade. showed a drop. Dominican Republic now classifies income

Imports of the Latin American Republics The United States is the principal market into five categories, each subject to a pro from the United States were valued at about for Latin American exports, but in the years portional tax rate. There is also a comple- $3.5 billion in each of the years 1960, 1961, 1960, 1961, and 1962 shipments to the United mentary tax on total income at rates from and 1962. The United States continued as States dropped in relative position as com3 to 40 percent.

the principal supplier in these years, but its pared with other markets. In 1962, Western El Salvador in 1961 modified the structure percentage-share of the market fell. The European countries received $3.6 billion in of its income tax rates substantially.

area's total imports from all supply sources Latin American goods, a 12 percent rise over Guatemala this year enacted the first in. showed an upward trend in the 1960–62 pe 1960. come tax legislation in its history.

riod, rising from $7.6 billion in 1960 to $7.9 Trade among the countries of the Latin Panama has substantially increased tax billion in 1962.

American area was larger in 1962, but the rates. Additional reforms are being con

Shipments into Argentina, Brazil, and volume was relatively small and was not of sidered.

Mexico—the three principal importing coun major significance in the total trade of the Peru has increased the complementary tax tries in Latin America-registered only minor

Republics. on nondistributed corporation profits. variations in dollar value during the period.

The upward trend in the value of the area's Colombia has introduced complete tax re

Venezuela, fourth largest importer in the exports is attributable to a number of facform modifying the concept of income, the

area, recovered somewhat after reaching a tors, including expanding world markets for tax rate structure and additional measures low point in import volume for recent years

certain commodities, favorable prices for a for promoting social progress and economic in 1961. Most of the other Republics im

number of products and export-product didevelopment.

ported larger volumes of goods in 1962. In versification carried forward under country Mexico, Venezuela, Haiti, Paraguay, Ar

creases ranged from small to substantial. In development-planning. In the case of Argentina, and Brazil have enacted legislation the case of Peru the rise was $163 million or

gentina, the increase in export trade was introducing changes in the tax rate strucabout 43 percent when 1960 and 1962 figures

due largely to greater grain and linseed shipture and in the level of exemptions in order are compared.

ments. In Mexico, efforts to develop producto promote better distribution of revenues,

The limited overall increase in imports

tion for export had a favorable effect. Peru's or to promote investment. reflects the generally worsened 1962–63 for

greatly expanded fishmeal output, new (1960) Bolivia and Honduras are studying sig

eign-exchange position of many of the coun large copper development, and a favorable nificant income tax reforms. tries. Import and exchange control meas

sugar market all contributed to larger exThere is a clear tendency to Increase taxes

ures aimed at conserving supplies of foreign port earnings. Expanding world markets for on luxury goods and to lower those on raw exchange, trade controls to foster local in

petroleum aided Venezuela in raising the materials.

level of exports. dustry, and currency stabilization efforts all OVERALL LATIN AMERICAN TREND IS UPWARD

Since late 1962, the world price trend for had their effect in holding down imports. Exports of the Latin American Republics (copper, lead, zinc, tin and silver) has been

the major mineral exports of Latin America FOR IMPORTS AND EXPORTS

totaled $8.5 billion in 1962 a substantial Latin America increased the dollar volume

steady or upward. In agricultural products, of its foreign trade in 1962. Both imports rise (about 10 percent) over the $7.7 billion

the trend has been mixed. On balance, it and exports rose-favorable indicators in in exports in 1961. Among the countries

would appear that the favorable price positerms of the goals of the Alliance for Prog. having important increases in the dollar

tion of the export products of the area is ress. However, the United States occupied volume of exports in 1962 were Argentina,

the major contributing factor to the area's a less favorable position in the Latin Amer Mexico and Peru. More moderate rises were 1962 export advance, expected to continue ican market in 1962 than in previous years, made by many of the other countries, while, through 1963.

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Source: United Nations, International Monetary Fund and International Bank for Reconstruction and Development, Direction of International Trade, Statistical Papers, Series T.

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Nicaragua

32,277 46, 226 23,739 25, 345 27,444 Panama, Republic of.

26, 746 107, 185 104,689 62,074 22,648 22,897 Paraguay

18, 724 13,048 7, 884 6, 922

8,581 7,231 5, 472 Peru..

173, 088 183, 800 104, 331 194, 306 Uruguay.

190, 602 105, 961 48,021 44,417 17,955 22, 677 24, 126 Venezuela.

19, 497 515, 662 468, 267 277, 357 898, 009 975, 614 Latin American

565, 826
Republics total:
Excluding special

category- 3,414, 554 3,221, 864 1,817, 115
Including special
category-

3,528,792 3,310, 604 1,879, 028 3,213,254 3,386,024 1,971, 650 20 republics percent

of U.S. total 1..., 17.5 15.8 15.4 21.8 20.7 20.2

1 Percentage based on total nonmilitary exports.

Source: Basic data of the U.S. Bureau of the Census.

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1 U.S. import statistics used.

Source: Official trade statistics of the various countries. ? Unadjusted totals; figures adjusted for underestimated values of some of the principal export commodities are: 1960-$739,788,000; 1961-$803,545,000; and 1962—$900,961,000. However, country distribution on the adjusted basis is not available. U.S. Exports to 19 Latin American Republics, by leading commodities, 1960–62

[Millions of dollars)

[blocks in formation]

THE $250,000 PRESS JUNKET treated to an expense-paid, 4-day trip to The newspaper junket on behalf of a Mr. FULBRIGHT. Mr. President, I Hollywood. Apparently only five news movie may be defended by some because would like to call attention to an article papers paid the expenses for their re- of its relatively harmless objective. I appearing on page 38 in today's New porters. Transportation for all the oth- would remind my colleagues and the York Times under the headline "Kramer ers as well as their hotel rooms, food, and members of the press that our recent Defends Junket for 'Mad'.” The story

The story liquor bills were all paid for by the movie hearings on foreign lobbying showed describes how a motion picture producer

maker. The financial "hospitality” went such activities were carried on by foreign defended his spending $250,000 on a

so far that the movie maker even paid interests—with similar "favorable" acpress junket to the opening of his mo for the newsmen's cable and telephone ceptance by the press—where the objection picture. According to the story, charges run up sending stories—most of

charges run up sending stories—most of tives were more serious and sometimes about 250 newsmen from 53 American which the producer characterized as "fa even conflicted with policies of our Goycities and 26 foreign countries were vorable”—back to their newspapers. ernment.

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