9th Draft

2/22/75

THE UNITED STATES AND LATIN AMERICA:
THE NEW OPPORTUNITY

Today, the nations of the world confront a situation of unprecedented magnitude and complexity: the economic, technological, political and human problems of interdependence.

It is appropriate that I should speak of the inter-American dimension of this subject here in the city of Houston -- a city in the vanguard of the era we are now entering. For Houston is symbolic of advanced technology, of international commerce, of America's energy resources. It is the scene of the interaction of cultures in this hemisphere, and representative of our nation's past, present, and future relationship with Latin America.

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The historic relationship between the United States
and Latin America is marked by two aspects of particular
significance for our times: the unique nature of our inter-
dependence; and the ties which link us to major forces
outside the hemisphere.

Interdependence

Interdependence, though increasingly global in nature,
has a special significance in this hemisphere. The historic
ties between the distinctive nations of the Americas provide
us with an unmatched foundation of experience and inter-
dependent achievement from which to address new global
realities.

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The fact and the consequences of hemispheric inter-
dependence are apparent. The impact of foreign events
affects the daily lives of the people of every nation of the Americas.

The disappearance of anchovies off the Peruvian coast, by
reducing feed and fertilizer supplies, leads ultimately to
higher meat and poultry prices in the United States. A
shortage of ferrous scrap or coking coal in the United
States imperils vital materials for the steel industries
of Argentina, Brazil and Venezuela.

But the nature of our interdependence is changing.
In the past, our economic relationships were largely based
on the exchange of raw materials from Latin America for
finished goods from the United States. Today's interde-
pendence is infinitely more complex. It is based on an inter-

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nationalization of production itself, with technology, labor
and capital combined across national boundaries.

As a result, we are all increasingly both producers and exporters. The industrializing Latin American nations now need access to the U.S. market to sell manufactured goods as well as their more traditional exports. And Latin America's markets are becoming as important to our own continued growth as its raw materials -- as indicated by our trade surplus last year of $1.2 billion with Latin America.

These developments, together with growing Latin American determination to obtain better prices for raw materials and to control their own economic destiny, led to the latest controversy in inter-American affairs, which centers on the 1974 U.S. Trade Act. The bill excludes all members of the

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Organization of Petroleum Exporting Countries from the new
U.S. trade preferences[. Congress took this action on the
grounds that oil-exporting countries which now benefit from
a four-fold increase in oil prices should not also enjoy the
special competitive advantage of tariff-free imports into the
U.S. market. But the bill did not distinguish among the
nations affected; it penalized all OPEC members,] including
Ecuador and Venezuela -- who did not participate in the oil
embargo. The Latin American reaction to the bill assumed
a coercive intent on our part toward them which did not exist.
As a result, they postponed the Buenos Aires meeting of
Foreign Ministers -- which was to have been the next step in
the new dialogue between the United States and Latin America.

Outmoded attitudes and hasty reactions demonstrate that
we have not yet learned to confront our problems instead of

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each other; that we have not yet focused on what binds,
rather than what divides us.

The Hemisphere and the World

In building upon our traditional inter-American ties;
we must accept the reality and significance of our other
relationships. The United States recognizes that the Hemi-
sphere is not a monolith. Both Latin America and the
United States have important ties and shared perspectives
with other sectors of the world.

Latin American nations will increasingly play roles
in both the industrialized and the developing worlds. We
accept this ambivalence, and hope only that it can make a
positive contribution to the accommodation of these groupings
in a broader global system.

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For the concerted actions of Third World nations
have at times seriously impeded this cooperation. The
industrialized nations have come to accept the philosophical
and practical force of non-alignment. It is therefore ironic
that nations which once chose non-alignment to shield them-
selves from powerful military blocs are now tending to form
a rigid bloc of their own. This serves to divide the world
into north and south, powerful and weak, imperial and
colonial at the very moment when such categories have
become irrelevant and misleading.

As the most developed sector of this group of nations,
Latin America can help promote a more cooperative relation-
ship between the industrialized nations and other parts of the
developing world.

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Latin America has a unique responsibility and opportunity to serve as a bridge for communication rather than confrontation. If this opportunity is not taken, self-indulgent nationalism will continue to assert itself at the very time when the international community requires an elevated sense of global cooperation.

But just as we look to Latin America to serve as a bridge between the developing and the developed world, we also will do our part within the context of our traditional alliances.

As the most powerful and influential nation of the industrialized west, the United States is committed to shape its policies, not to the exclusive benefit of the developed allied world, but to the service of the general global welfare. We want the industrial world to stand open to the concerns and

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aspirations of the developing nations and to devise its common
programs with the aim of achieving a new balance of opportunity
and benefit between all nations, developed or developing, rich,
poor or emerging.

## Building Upon our Special Relationship

Thus, our inter-American relationship is singularly
significant not only to ourselves but also to the common concerns and efforts of nations elsewhere. Our hemispheric
progress may serve as a touchstone of progress toward a
less divided world.

We can make this opportunity a reality if we adapt our
traditions to meet the problems of our new interdependence.

In the early years of the postwar era, nations of this hemisphere created the world's oldest regional institutions and
a juridical framework that contributed greatly to the founding

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and early development of the United Nations and NATO. Now
as we enter a new era we can once again contribute to the
shaping of a new international environment. The traditional
principles of the inter-American system: juridical equality
of states, respect for national sovereignty, and non-intervention
remain valid. And they must now be enhanced by a new
dedication to bring about mutuality of obligation and benefit in
all our efforts. The challenge of our time is to reconcile
equally valid but conflicting interests without the use of
military force, political pressure, or economic coercion.

To do so, we need each other's help in shedding the habits
and stereotypes which have impeded our relations in the
past and which now obstruct our efforts to develop new
patterns for the future.

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It was precisely this spirit that led the U.S. to seek
a new dialogue with Latin America. In the year since
I first met with my Latin American colleagues in Mexico
City we had begun to search for solutions to the hemispheric
and global problems we all face. Now the controversy over the
Trade Act reveals that old suspicions continue to smolder.

The United States is ready to continue the dialogue.

Next month I will make my first visit to South America as Secretary of State. At that time, I will make clear that:

-- The United States accepts Latin America's new
strength in the hemisphere and the world. We
will alter our policies and work to resolve long-standing inequities. In turn,

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-- the Latin American nations should accept the responsibility their strength entails, developing a new sense for the possible as well as the ideal, sharing the burdens as well as the prerogatives of power.

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We of the Americas -- North and South -- can no longer take each other for granted. It is time to take a fresh look at ourselves, to create a new relationship of equilibrium and mutual benefit.

In Political Matters, our governments should work toward mutual accommodation and international consensus, avoiding imposition of views, whether unilaterally or by blocs of countries;

In Economic Matters, a new international economic order must be based on an equilibrium of benefit, providing a fair return to developed and developing countries alike.

These principles require each side to reexamine its past conduct and policies. In light of this, let me now turn to some of the problems we face. First to what the United States must contribute, then to what we ask of Latin America, and finally what we can do together.

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What We Must Ask of Ourselves

First, what must we in the United States ask of ourselves?

In the past decade, the United States has experienced disarray at home and disturbing challenges abroad. Our traditional optimism and self-confidence have been tested.

But the American people have reason to be proud of the resilience and inner strength demonstrated during these trying years. The nation has emerged more realistic, more mature. These qualities should be the basis for our re-examination of the problems -- political, economic, and human -- which have clouded our relations with Latin America in the past. If Latin America is willing to join us in a new relationship of mutual obligation, benefit, and

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understanding, they will find us ready to resolve the problems
of the past and cooperate on a positive program to meet the
challenges of the future. Let me review these problems and
the means by which they may be solved.

First, the POLITICAL DIMENSION

In our political relations, adherence to the traditional
principles of non-intervention and national sovereignty are
crucial, but not sufficient to meet the challenges of our time.

The nations of the Americas will have to reach out to new
levels of mutual accommodation and consensus. This need
is demonstrated by the major political issues we face: the
status of the Panama Canal, Cuba, and the issue of U.S.
legislative sanctions.

Panama

The present negotiations between Panama and the United
States over the Panama Canal have implications that extend

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beyond our two countries, and demonstrate the need for a
new approach to political accommodation.

The building of the canal is an epic story of our nation's
courageous determination to master nature for the common
benefit of all the world's people. And over the years the
people of the world have come to look upon the canal as an
important lifeline of commerce and international security.

In acquiring the rights to build the canal, the United
States gained exclusive control -- the right to act as if we
were sovereign -- over a ten-mile strip of Panamanian
territory from the Atlantic to the Pacific. Understandably,
the Panamanian people view the perpetuation of this arrange-
ment as an infringement upon their national sovereignty and
principal resource -- their country's strategic location.