-13-

been carried on intermittently for eleven years. Now it is
time to conclude them with agreement.

Success in this effort requires recognition by our peoples --
and by the negotiators and legislative bodies of each side --
that there are limitations to what the other can accept.

We in the United States must recognize that a treaty negotiated
in 1903 does not meet the requirements of 1975. We must
acknowledge that Panama's desire to exercise jurisdiction
over its territory and to participate in the operation and
defense of the Canal are legitimate aspirations. Arrange-
ments which do not directly affect our ability to operate
and defend the Canal can be modified.

But we also want Panama to understand our perspective --
that the efficient, fair and secure operation of the canal
is important to U.S. vital economic and security interests;
that a new treaty must provide for operation and defense of
the canal by the United States for a reasonably extended

-14-

period of time; and that a new treaty must protect the
legitimate interests of our citizens and property in
Panama.

A treaty based on these premises will make the United
States and Panama partners in the operation of the canal
and protect the essential national interests of both.

On this important issue, the Administration has
been consulting with Congress in a spirit of national
partnership.

Thanks to the constructive attitude of both countries,
much progress has been made in recent months. Serious
problems still must be resolved, but I am confident that
if both parties continue to display a forthcoming spirit,
we can overcome the remaining obstacles.

A treaty based on these premises will make the United
States and Panama partners in the operation of the Canal
and protect the essential national interests of both.

-15-

The Administration has been consulting with Congress
in a spirit of national partnership. As the configuration
of a new treaty becomes more clear, we will increase these
consultations and discuss possible new arrangements for the
canal in greater detail.

Cuba

The issue of Cuba involves issues of both hemispheric
and bilateral importance, and demonstrates the complexities
of problems which span both realsm.

In the early 1960's this hemisphere developed a
common policy with respect to Cuba. In 1965 the OAS called
on all its member states to sever diplomatic and trade
relations with Cuba.

More than ten years have passed. The countries of
Latin America have successfully resisted Cuban pressures,
and seem less and less concerned that Cuba is seeking to
export its revolution by force. This has produced problems

-16-

in three areas: the lifting of OAS sanctions, the application
of U.S. laws to U.S. corporations domiciled in Latin
America and in the attitude of the U.S. towards Cuba
bilaterally.

Last September several countries proposed a meeting
to consider lifting the sanctions. Since we believed that the
time had come to discuss the Cuba issues, we joined in the
vote to hold the meeting. Since Cuba represents no direct
danger to the United States we remained neutral on the
actual discussion. We thought it best to leave to the
Latin American countries the determination of whether Cuba
still threatens their security. A majority, believing that
the threa has faded and that Cuba's isolation serves no
purpose, voted in favor of terminating the sanctions. But
the Rio Treaty requires a vote of two thirds and the sanctions
thus remain as legal obligations for OAS members.

However, all the OAS nations have now agreed informally
that the Rio Treaty should be amended to permit the lifting of

-17-

sanctions by a majority. Recently several Latin American
countries suggested that this agreement in principle should
be applied to Cuba.

We agree. The United States will support measures
which will permit the Cuban sanctions to be lifted by a
majority vote of the members of the Organization of American
States this Spring.

Another problem has concerned the role of U.S.
corporation subsidiaries domiciled in Latin American in
Cuban trade. Our insistence that these subsidiaries apply
U.S. regulations has become a source of friction with those
Western Hemisphere countries who have normalized their own
trading relations with Cuba.

We recognize the objections to asserting our juridical
will beyond proper jurisdiction. Accordingly, the United
States will no longer attempt to prevent the subsidiaries of

-18-

American corporations from trading with Cuba if the host country policy promotes such trade, and if strategic items, high technology and substantial components manufactured in the United States are not involved.

We thus look forward to removing the Cuban issue as an irritant to inter-American relations. As for our own relations with Cuba, there can, of course, be no change as long as the OAS mandate remains in force. But neither Cuba nor the U.S. can benefit in an atmosphere of perpetual hostility. Should the OAS sanctions be altered, the United States will consider changes in its relations with Cuba in light of our interests, and the attitude of the Cuban government. The United States has already taken some positive steps toward Cuba to demonstrate our good will and the direction in which we are prepared to move. But fundamental change will not come, either in the near or long term, unless there is a demonstrated readiness on the part of Cuba to assume the

-19-

mutuality of obligation and regard upon which a new rela-
tionship must be founded.

Legislative Sanctions

In its relations with Latin America, the United
States increasingly faces the dilemma of reconciling
legislative mandates with the needs of a coherent and
purposeful foreign policy. The recent series of inter-
national sanctions imposed by Congress through legislation
have resulted in serious differences between nations of
the hemisphere.

On most of these issues there is no disagreement
between the Executive and the Congress over objectives;
nor do we disagree with Congress that such sanctions are a
matter of sovereign discretion. The Administration is
determined to ensure that American citizens -- investors,
intellectuals, fishermen or tourists -- receive just and
equitable treatment abroad under international law.

-20-

But automatic interruptions of normal relationships often harm the very interests they are designed to protect. Legislative sanctions are drastic and undis-criminating. They present the other government with a public ultimatum. By seeming to challenge the recipients' sovereignty, they harden positions, make diplomacy impossible, and often poison the entire range of our relations with the country involved.

This is why President Ford and I opposed the Trade Act provisions aimed at OPEC. These provisions denied tariff preferences to Venezuela and Ecuador, as well as to other countries outside the hemisphere which had not participated in the oil embargo. As neither country would significantly gain from preferences the sanctions had no practical effect. But the result was to interrupt the inter-American dialogue.

-21-

Latin American sensitivity to the United States' exercise of economic leverage has been finely honed by historical experience. If we are to avoid charges of coercion and intervention and if the nations of this hemisphere are to rid themselves of the psychological burdens of history, the United States has a special responsibility to act with forebearance. It is the policy of the Administration to oppose automatic sanctions. As a matter of practical politics, our capacity to achieve the repeal of such laws as the Hickenlooper and Gonzales amendments will depend on our capacity to work with both Congress and Latin America to find new ways of advancing our common interests. The Latin American nations must recognize that congressional sanctions stem from perceived injuries to legitimate interests. The Administration is prepared, within the framework of the New Dialogue, to search

-22-

for solutions with its Western Hemisphere neighbors
which can then be submitted to Congress as a means of
modifying automatic sanctions.

## Economic Relations

Hemispheric progress requires the creation of a new
equilibrium of economic benefit. As a leading industrial
nation, the United States has a special responsibility toward
developing countries. Two questions of particular concern
to Latin America -- trade and multinational corporations --
can play an important part in the development of a more
balanced international economic order.

## Trade

A new equilibrium in trade is vital for global harmony
and prosperity. It will require fair and steady prices for
exporters for both raw materials and manufactured goods. As
Latin American economies grow, so will opportunities for
the United States to export more to Latin America. But we,

-23-

in turn, must be willing to buy semi-processed and
manufactured goods from Latin America.

In the next days the President will send the Inter-
national Trade Commission a list of products on which
the Administration proposes to eliminate all import tariffs
from eligible developing countries for 10 years. Latin
America, as the most advanced developing region and the one
nearest the U.S. market, will be in the best position to
take advantage of these preferences. Our list will affect
nearly $1 billion of Latin American exports.

Steps are also underway to modify the exclusionary portions
of the Trade Act. Positive bills have been introduced by
various members of Congress -- including your own distinguished
Senator Bentsen -- to extend generalized special preferences
to all Western Hemisphere countries or, alternatively, to all
those countries which, like those of the Western Hemisphere,
did not participate in the oil embargo. The Administration

-24-

strongly supports these proposals.

## Multinational Corporations

Multinational corporations symbolize the economic interdependence of our time. Multinationals promote trade, spread technology, provide employment and spur development. Yet Latin Americans fear that their power can threaten domestic development priorities.

The United States has been working with Latin American nations for nearly a year on the special problems created by transnational enterprises and by the technological revolution. Strengthened cooperation among our governments -- whether by the creation of new mechanisms for resolving investment disputes, or by the exchange of scientific and managerial know-how -- is essential if we are to harness modern productive forces to the common good.

Specifically the U.S. would be prepared to submit the facts underlying investment disputes to binding international arbitration.

-25-

## What Latin America Can Do

What do we ask of Latin America? The first principle we must bear in mind is that the nations of the Caribbean, Mexico, Central America and South America are highly diverse. The sterotyped images of a hemisphere sharply divided between tradition and progress, between the rich, powerful north and weak, poor south are no longer valid.

In the past decade, progress in science, industry, agriculture, education have done much to transform Latin America. Economic growth has been steady and sometimes spectacular. Political institutions increasingly have been adapted to particular social conditions and national traditions. A new sense of Latin American unity has promoted a common awareness of problems and opportunities.

The new Latin America has many dimensions. The peaceful alternation of power between government and opposition in Colombia,

-26-

Venezuela and Argentina demonstrates the strength of political democracy.

Brazil's dynamism symbolizes the region's capacity for economic growth.

The struggle for reform of archaic structures is evident in Peru.

These elements: democracy, growth, and reform are increasingly characteristic of what has been termed "an emerging Latin American personality".

We welcome this new strength, self-confidence, and diversity. Latin American's new leadership has begun to take significant initiatives toward peace and a new international order.

Panamanian and Peruvian soldiers are valued members of UN peace-keeping forces in the Middle East. Last December the Andean countries, following a Peruvian initiative, pledged themselves to seek ways to limit acquisition of offensive weapons. Venezuela has taken the lead in stimulating regional cooperation by offering some new oil revenues to the Inter-American Bank and the Central American Bank for Economic Integration. Working

-27-

with Bolivia, Paraguay and Uruguay, Argentina and Brazil are pooling their
technology and resources to harness the vast potential of the River
Plate Basin.

The search for new international relationships has found
organizational expression in the Andean Pact and universal elaboration
in Mexico's advocacy of a Charter of Economic Rights and Duties of States.
Indeed, Latin American foreign policy today may be characterized by
the search for revitalized international cooperation -- on a regional
basis through existing institutions such as the Inter-American Development
Bank and possible new organizations, and on a global basis, through
a strengthened voice for the Third World.

These initiatives signify Latin America's maturity, but
as Latin America becomes more active in world affairs South as
well as North America must rethink some traditional attitudes.

-28-

The United States is increasingly concerned about the growing confrontation between the developing and developed worlds. 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 themselves from powerful military blocs are now tending to form a rigid bloc of their own.

The concerted actions of some of the Third World nations have at times seriously impeded the global cooperation so crucial to progress.

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. Such attitudes are deplorable in the world at large; they are particularly inappropriate to Latin America.

As the most developed sector of the Third World, Latin American nations will increasingly play roles in both the industrialized and developing

-29-

sectors of the globe. We welcome this ambivalence because it can make a
positive contribution to the accommodation of these groupings in a broader
international system. 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 and the Western Hemisphere will fail to achieve the
progress and partnership that are within its grasp.

We are concerned about the quality and civility of the dialogue between
the United States and Latin America. The temptation to blame national
disappointments on the intrigues, strategems and excesses of foreigners
is as old as nations themselves. And for understandable historical
reasons, Latin America has been inclined to seek its independence and
demonstrate its unity by making the United States the whipping bar. Such
attitudes and reactions may have served partisan purposes in the past.

-30-

But they are incompatible with the opportunities before us and the
interdependence which history has imposed on us.

We do not expect agreement with all our views but neither can
we accept a new version of paternalism, in which those with obligations
have no rights, and those that claim rights accept no obligations.

The choice for the United States is not between domination and indifference.

The choice for Latin America is not between submission and confrontation.

Putting aside the slogans and rhetorical denunciations which have
marred our dialogue in the past, we expect the new leadership in Latin
America will recognize that mutuality is essential to inter-American
and global cooperation.

More specifically, we hope that in the months ahead Latin America:

- direct its growing regional unity toward cooperation,
- not confrontation. It is senseless to seek to
- compell the United States by bloc pressure into a

-31-

cooperation which our values and convictions have
caused us to effect freely.

-- use its new influence and maturity as a bridge for
cooperation between the Third World and the industrialized
nations.

-- recognize that mutual responsiveness must extend
to sensitive political as well as economic matters; in
particular, that the developing international consensus on

What do we have
in mind here?

the protection of fundamental human rights requires all
countries to take action to foster our common values.

Economic questions will provide a severe practical test of the
new mutuality required for greater international cooperation and
equilibrium.

-32-

The United States does not seek precise reciprocity in the
economic sphere from Latin America. The United States recognizes
that as the richest nation in the hemisphere it has special obligations.
But experience teaches that the problems of development cannot be resolved
by any one country acting alone. The nations of the Americas need
cooperation more than generosity, trade more than aid. We must harness
both public and private resources and give management, technology
and imagination as high a priority as capital flow.

To meet their obligations in forging a more balanced international
economic order, we therefore expect that Latin American countries will:

- approach economic problems by seeking a dynamic
equilibrium in trade and investment that will
provide fair returns for manufactured goods as well
as raw materials, and protection for investors as well

-33-

as workers; producers as well as consumers;

-- accept that interdependence inevitably projects some
economic disputes from the domestic to the international
arena; that to minimize clashes of sovereignties will
require new inter-governmental procedures to separate
matters of fact from matters of law;

-- share the costs as well as the benefits of multilateral
cooperation, by increasing the financial contribution to
international organizations and development projects.

What We Can Do Together

The ultimate test is in what the Nations of the Western Hemisphere
can do together.

I see four areas in which we can move imaginatively and boldly:

-34-

-- to accelerate the physical integration and industrial
development of Latin America;

-- to expand cooperation in science and technology;

-- to pioneer new arrangements in the production and
marketing of commodities; and

-- to strengthen our capacity to cooperate, by broadening
our vision of the future and preserving the riches of the past.

-35-

## Physical and Industrial Integration

Over the past two decades Latin America -- more than any other area of the developing world -- has made real progress in economic integration. The Central American Common Market, the Caribbean Common Market, the Andean Pact and the Latin American Free Trade Association have begun to translate abstract hopes into physical realities. Roads, hydro-electric plants, pipelines, power grids and industrial plants have started to break down the natural barriers that have impeded the flow of people and goods ever since the first settlements sprang up in the wilderness of the New World.

We welcome these efforts. And we are persuaded that Latin American integration serves the interests of world peace and order.

The recent increase in world energy prices has generated a

-36-

vast new pool of savings, and thereby creates a major opportunity
to spur regional development. Those who hold the savings are
looking for ways to put their money to work, with reasonable
security and with appropriate protection against monetary
devaluation. In turn, those among the developing countries who
are not petroleum exporters desperately need additional capital
for growth.

I would like to propose to our neighbors in Latin America
and to our friends in the Near East that part of the oil-generated
savings be combined with United States technology in a bold new
program to further Latin America's industrial and physical
integration. A trilateral effort of this nature would open a new
chapter in Latin American development, and in global cooperation.

To launch such an effort I recommend that we convene in

-37-

September of 1975 a special high-level conference of Presidential representatives of the oil exporting states and the members of the OAS.

This conference would decide in detail how credite may be extended, and be secured, for the planning and construction of the highways, river systems, dams and transport entities which Latin America needs to carry its development efforts forward in the years to come -- and how generous inputs of know-how and science from the United States can enhance this effort.

I have spoken to the Secretary General of the Organization of American States, and to the President of the Inter-American Development Bank. They stand ready to support such a conference if it commends itself, as I am sure it will, to our friends in Latin America and the Middle East.

To support these and similar projects, I propose that the

-38-

forthcoming OAS General Assembly consider establishing a single
Developmental Council combining the existing technical councils
of the OAS. Special procedures could then be established to
achieve close coordination between the new Council and all other
inter-American and United Nations agencies working in this
hemisphere.

Our regional financial institutions should also reflect this
new equilibrium. The United States will maintain its support for
the Inter-American Development Bank. And it will seek a new
equilibrium in the Bank's capital structure and its lending policies
to reflect the growing financial capacity of other members. I
would hope that in the near future an increase in Latin American
capital contributions will make it possible for the United States to
relinquish its veto power, thereby trans forming the bank into a
truly multilateral institution.

-39-

Science and Transfer of Technology

Latin America's efforts to accelerate its physical and
industrial integration call for expanded cooperation in the field
of science and transfer of technology. This cooperation should
have as its objectives:

-- to facilitate Latin American access to United States public technology and enlist the cooperation of holders of privately owned technology.

-- to help the Latin Americans build up their own research capabilities so that they can adapt and develop technology suited to their needs.

-- to agree on a set of principles, applicable to source and recipient companies and governments, which will serve as guidelines in the transfer of technology.

Fortunately, considerable progress has been made in recent

-40-

months in this area by the Working Group established by the

Foreign Ministers last April as part of the New Dialogue. The

Working Group should complete the assignment entrusted to it.

We will be forthcoming. The United States is prepared to:

- negotiate a statement of principles governing
  the transfer of technology by our corporations;

- help establish and finance a chain of functional
  research institutes in specific fields of broad
  interest such as marine sciences, food technology
  and energy;

- put our own public research and development centers
  and, to the extent possible, private U.S. facilities, to
  work on direct research in areas of primary interest
  to Latin America; and

-41-

-- contribute $5 million to a collectively-funded initiative to train a new generation of Latin Americans in the management of applied technology.

## Cooperation in the Production and Marketing of Commodities

I turn now to a subject which must command our most serious efforts of cooperation. I speak of food . . . and of the spectre of mass starvation that haunts mankind.

The United States is the world's greatest food exporter. Our abundance feeds millions in less fortunate countries. But Latin America rivals the United States as a potential food surplus region. In an era of interdependence, opportunity carries a heavy responsibility.

We must join together to tap that great potential.

-42-

To meet the challenge of the food crisis, the farmers of this Hemisphere must be assured of a fair and stable income for their products. Boom and bust cycles of food prices will not bring out the investment and farmer effort needed to increase production to the levels we can and must attain in this hemisphere.

The same is true for the raw materials on which the factories of the world depend.

In the past, the attitude and policy of the United States on commodity prices has been hesitant and ambiguous. Latin America has misread our doubts as opposition to their efforts to assure stable and fair prices for their products on the world market.

Let there be no doubt of our views. We strongly favor a world trading system which will meet the needs of consumers for

-43-

increasing supplies of commodities at reasonable prices and
the needs of producers for stable and remunerative prices.
We do not oppose arrangements dedicated to these ends. And
we will cooperate fully with consumers and producers to
develop mechanisms that meet these objectives.

The United States believes that the time has come for
the countries of the Western Hemisphere together to shape
specific agreements in this area, in which they have such
a great common stake.

I propose that the Economic and Finance Ministers of
the Hemisphere use the forthcoming meeting of the Inter-
American Economic and Social Council to begin to identify
the specific commodities that could lend themselves to
stabilization agreements. Such agreements could cover
access to supply, access to markets, producer or

-44-

consumer collusion, and other rules of the game.

Two fundamental principles should guide our joint search.

No longer can we rely on the market alone as an adequate guide to outcomes. But, equally we cannot expect unilateral "begger thy neighbor" actions to determine a feasible and continuing equilibrium. Within these bounds lies a range of rich possibilities and stable outcomes that can make our new interdependence a vehicle for more rapid and more equitable global development.

## Strengthening Our Capacity to Cooperate

Interdependence requires a new and wider range of technical, intellectual and professional cooperation. In concentrating on the immediate political and economic needs of the peoples of our hemisphere, we must not neglect their intellectual growth and spiritual heritage.

-45-

There are two areas in which I believe we can do more
together than we do today. One looks to the future, the other
to the past.

One of our chief problems today is that we do not have a
common vision of the future. What will life in our hemisphere
be like at the turn of the century and beyond? The best
independent minds in our countries should be working now on
the future implications of current trends in education,
nutrition, housing, transportation and urban renewal.
Recommendations that will flow from the exchange of national
experiences and viewpoints can serve as guide posts to our
politicians as well as our planners as they address the practical
problems that lie ahead.

The Organization of American States could provide a

-46-

multilateral framework for such interactions, which should
mobilize the best of our respective universities, foundations,
research organizations and professional associations.

Looking now to the past, it is clear that our preoccupation
with the interdependent present and future must not be permitted
to dilute the creative cultural diversity which has inspired
mankind's progress, and which continues to nourish the values
and aspirations upon which our civilization rests.

There is an urgent need for cooperative action to safeguard
the irreplaceable artistic achievements of the great ancient
civilizations of Mexico, Central and South America. This
uniquely important archeological and cultural heritage is now
subject to destruction and looting on an unprecedented scale.

This Administration will work with Congress for the rapid passage
of the implementing legislation to enable U.S. ratification of the

-47-

UNESCO Convention, which will do much to curtail the
international market in stolen cultural property.

In addition, we will be prepared to meet and cooperate
with Latin American Governments to discuss measures going
beyond the UNESCO Convention to meet emergencies which
endanger culturally important monuments and to devise
cooperative programs for international exchanges of national
cultural treasures.

## Conclusion: Our Mutual Commitment

Last year in Mexico City, I described our objectives in
this hemisphere with these words:

"Our common impulse . . . is to fulfill the promise
of America as a continent which beckoned men to fulfill
what was best in them.

"Our common reality is the recognition of our diversity.

-48-

"Our common task is to forge our historical and geographical links into shared purpose and endeavor."

On this basis, the U.S. continues to stand ready to conduct a genuine dialogue with its neighbors on the issues and in any manner: multilaterally and bilaterally, in the OAS and outside the OAS, with subregional groups or individual states.

If we are collectively conscious only of the burdens of the past, and not the promise of the future, our own place in history will be insecure. We can move into a new era of cooperation or we can falter into disunity.

The dream of hope and opportunity that has served the Americas for almost five centuries is still vivid. It is the dream of the original promise of this hemisphere, the promise of a new world. Now we are entering another new world, a new

-49-

era. Now we have the opportunity to fulfill the promise of this
hemisphere in a way that has global significance. As Victor
Hugo once said, in praise and encouragement of enlightened
South American policies, "The main highway lies open. May
America travel it, and the world will follow."

10th Draft

2/24/75

THE UNITED STATES AND LATIN AMERICA:
THE NEW OPPORTUNITY

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

In this time of challenge, there is no greater long-term priority for the United States than to repair, strengthen and build upon the ties that link us to our traditional friends. We are bound not only by geography, but by:

- the common heritage of Western civilization;

- similar commitments to national independence, social progress, and human dignity;

- a history of mutual support in times of crisis.

And there are no older international friends than those in this hemisphere.

-2-

The long and unique ties which bind the United States and Latin America provide an opportunity for the peoples of this hemisphere to vindicate the promise that for centuries has inspired our two continents -- the promise of a new world of justice, peace and prosperity for all.

If we succeed we not only will serve the interests of the American nations and this hemisphere, we can make inter-American cooperation a firm pillar of the global community which our new era demands.

The poet Leon-Felipe (Spanish-born Mexican, died in 1960's) has set forth the task before us:

> "First it is necessary to undo the injustice,
> First it is necessary to resolve the enigma;
> And necessary to resolve it among us all."

-2a-

These then, are our goals: to repair the errors of the past,
to discover the positive meaning of our historical ties,
and to resolve our problems together, on the basis of equality.

-5-

In this we are fortunate, for there is a philosophical price to be paid for modernism. The frontiers to which we now are called are not geographical, but frontiers of human need and creativity. Our common experience has readied us for the challenge. This is our primary achievement: the spirit of the Americas.

Common achievement born of shared experience has been demonstrated in our time by the common American effort in World War II, and in the postwar era when the nations of this hemisphere created the world's first truly regional institutions and a juridical framework that contributed greatly to the founding and early development of the United Nations and NATO.

-7-

dence is infinitely more complex. It is based on an inter-
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.

Even as interdependence has grown within the hemisphere, so has it grown between us and other nations of the world. Latin America has important ties and shares perspectives with the Third World; the U.S. maintains its traditional

-7a-

alliances with the industrialized democracies. We see the
hemisphere not as a common front against others, but as a
common effort with others toward global cooperation.

Indeed the historic ties between the distinctive nations
of the Americas provide us with a solid foundation of exper-
ience and interdependent achievement from which to address
new global realities. 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.

-8-

It was this awareness of past achievement and vision of
future accomplishment that led the United States to seek a
new dialogue with Latin America. In the year since I first
met with my Latin American colleagues in Mexico we have

-- removed some of the obstacles to full discussion;

-- gained a better understanding of the needs and
aspirations of our peoples; and

-- begun to draw upon this growing understanding in our
approach to modernizing our bilateral and hemi-
spheric relations.

We want this process to continue -- to see whether free
peoples, respecting their diversity but united by similar
aspirations, can achieve great goals on the basis of equality.

Any relationship as long and complex as ours inevitably

is haunted by the bitterness of old disputes and the smoldering

suspicion of new injustices. Until we cast off these

burdens we will only perpetuate the errors of the past and
exacerbate the legitimate differences which any vital, mature
international relationship inevitably will generate.

This is demonstrated by the latest controversy in inter-
American affairs, the Latin American's postponement of the
Buenos Aires meeting of Foreign Ministers -- which was to
have been the next step in the new dialogue. This decision was taken
in reaction to the 1974 U.S. Trade Bill. Against the

this bill
wishes of the Administration, excluded all members of the

Organization of Petroleum Exporting Countries from the new

U.S. trade preferences -- thus excluding also Ecuador, Venezuela,

-10-

and other nations outside the hemisphere which did not

The United States Administration
participate in the oil embargo. The Latin Americans
opposed this provision and several other members
perceived in this Act a coercive intent on our part which
of course included your own distinguished敌人
Blumenstein intended amendment to remove this
P. to turn this disagreement into an interruption
did not exist. And once again the U. S. feels burdened
by the weight of old resentments and trapped by hasty
of our dialogue purees the nations of America
reactions.

We have not yet learned to confront our problems
instead of each other. We have not yet learned to focus
on what binds rather than what divides us.

The new problems we face together should not be
permitted to delay or disrupt our dialogue. 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 :

-10a-

-- 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,

-- the Latin American nations should accept the responsibility their strength entails, developing a new sense of shared identity, and understanding that for the possible as well as the ideal, sharing the burdens as well as the prerogatives of power. More positive than the removal ofgreecues,

-12-

What We Must Ask of Ourselves

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

Above all, we must commit this nation -- the government and the people -- to the goal of bringing about a new relationship between the United States and Latin America. A spirit of hemispheric partnership, is more fundamental than any

policy, or treaty, or program. For without it, policies will lose their momentum; treaties will become dead letters; programs will become lifeless. But with it technical problems can yield to solutions, and fresh acts of creativity and progress can be realized.

President Ford has asked me to reaffirm the United States is committed to work in this spirit. We will not be discouraged or deterred by the inevitable frictions and setbacks that mark

a new effort
our path. We will recall and build upon what has been
accomplished. We are prepared to
tear
unite us rather than the few that could tug us apart.

If Latin America is willing to join us in a new
relationship of mutual obligation, benefit and understanding,
we can resolve the problems of the past and cooperate on
challenges of the future.

Let me review the United States approach to the major items on
our agenda.

In our political relations, we must anchor our efforts on
the foundations of non-intervention and national sovereignty.
But those principles, though indispensible, are 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

-13a-

and consensus. On this basis, the U.S. is prepared to move
positively on the major political issues we face: the status
of the Panama Canal; the place of Cuba in the hemisphere;
and the question of U.S. legislative sanctions.

The Panama Canal

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

-14-

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. Today in the
Canal Zone we operate a full-fledged Government, enforce
U.S. laws, operate many commercial enterprises and
control most deepwater port facilities that serve Panama.

The natural urban and economic growth of Panama has
become increasingly constrained by Canal Zone boundaries.

Understandably, the Panamanian people view the per-
petuation of this arrangement as an infringement upon their
national sovereignty and principal resource -- their country's
strategic location.

Thus, Panama and the United States both have a vital
stake in the treaty arrangements governing the canal.

History, geography and the political imperatives of our time

*Lave induced* *neck*

now compel our two countries to design a new relationship
governing the canal. These negotiations have been carried
on intermittently for eleven years. Now it is time to conclude
them with agreement.

-16-

Success in this effort requires recognition by our peoples --
and by the negotiators and legislative bodies of each side --
that there are limitations to what the other can accept. We
in the United States must recognize that a treaty negotiated
in 1903 does not meet the requirements of 1975. We must
acknowledge that Panama's desire to exercise jurisdiction over
its territory and to participate in the operation and defense of
the Canal are legitimate aspirations. We must analyze
which aspects of our presence in the Canal Zone are essential
to our interests and which are not. Arrangements which do
not directly affect our ability to operate and defend the Canal
can be modified.

But we also want Panama to understand our perspective --
that the efficient and fair operation of the canal is important
to U.S. economic and security interests.

-17-

modify the interests that are not essential so that we may ensure
those that are.

But we also want Panama to understand our perspective --
that the efficient and fair operation of the canal is vital to U.S.
economic and security interests; that a new treaty must provide
for operation and defense of the canal by the United States for
a reasonably extended period of time; and that a new treaty
must protect the legitimate interests of our citizens and property
in Panama.

-17-

Thanks to the constructive attitude of both countries, much progress has been made in recent months. We already have agreements that the U.S. will have the primary responsibility for the operation of the Canal during the life of a new treaty. We will have the right to use the land and water necessary for the operation of the Canal. We will also have primary responsibility for defending the waterway with the rights to maintain land, air and sea forces in Panama. Now the negotiators are addressing the questions of compensation to Panama for U.S. use of the Canal and the amount of land to be released to Panama under the new arrangement.

We have agreed with Panama that the new treaty will have a fixed termination date. Panama will assume jurisdiction over its citizens and its territory. Panama will have

-17a-

a just and equitable share of the benefits derived from the
operation of the Canal. It will have a growing participation
in the administration and defense of the Canal over the life
of the treaty.

Some serious problems still must be resolved, but I am
confident that if both parties continue to display a forth-
coming spirit, we can overcome remaining obstacles to a
new treaty.

-18-

Americans traditionally test any new enterprise with the questions: Is it fair? Does it work? I am confident that the new treaty will meet these tests and will commend itself in principle and in detail to the United States Congress and the American people. It will also exemplify to the Latin American nations the type of new relationships we seek in this hemisphere.

## Cuba

The Cuba question involves issues of both hemispheric and bilateral importance, and demonstrates the complexities of problems which span both realms.

Cuba's relationship to the Hemisphere as a whole, represented
by the Organization of American States, illustrates the importance
of consensus.

In the early 1960's we in this hemisphere acted in concert
on the problem of Cuba. In 1964 the OAS called on all its
member states to take collective action against the Cuban
threat to collective security by severing diplomatic and trade
relations with Cuba.

More than ten years have passed. The countries of Latin
America have successfully resisted Cuban pressures, and the
Cubans in turn seem less disposed to export their revolution
by force.

Last September several countries proposed a meeting to
consider lifting the sanctions. We joined in the vote to hold
the meeting, but remained strictly neutral on the action to be
undertaken.

taken, believing that the Latin American countries concerned
are the best judge of whether Cuba still threatens their
security. Clearly Cuba represents no danger to the United States.

At Quito a majority, believing that the threat has faded and
that Cuba's isolation serves no purpose, voted in favor of
terminating the sanctions. But the Rio Treaty requires a
vote of two thirds and the sanctions thus remain as legal
obligations for OAS members.

However, all the OAS nations have now agreed informally
that the Rio Treaty should be amended to permit the lifting of
sanctions by a majority. Recently several Latin American
countries suggested that this agreement in principle might
should be applied
to Cuba.
represent a useful precedent to resolve the outstanding OAS
sanctions now directed against Cuba.

-22-

We do not seek to impose our juridical will beyond its

Accordingly, proper jurisdiction, the United States will no longer attempt to prevent the subsidiaries of American corporations from trading with Cuba if the host country policy promotes such trade, and if strategic items, high technology and substantial components manufactured in the United States are not involved.

We thus look forward to resolving this irritant to inter-American relations. As for our bilateral relations with Cuba, the United States has already taken some positive steps toward Cuba to demonstrate our good will and the direction in which we are prepared to move. But fundamental change will not come, either in the near or long term, until and unless there is a demonstrated readiness on the part of Cuba to assume the mutuality of obligation and regard upon which a new relationship must be founded.

-23-

## Legislative Sanctions

The United States continues to face the dilemma of reconciling the legitimate roles of Congress and the Executive in order to achieve a coherent and purposeful foreign policy.

The recent series of international sanctions imposed by Congress through legislation have resulted in serious differences between nations of the hemisphere. To resolve these differences will require a sensitive attention to mutual accommodation as a means of reconciling the legitimate though conflicting claims of national sovereignies.

Legislative amendments which react to actions, such as the expropriation of American property without prompt com-

-24-

pensation or the seizure of American fishing boats, by cutting off all U.S. aid have become a detriment to the conduct of our relations with Latin America.

But sudden interruptions of normal relationships often harm the very interests they are designed to protect.

Legislative sanctions are drastic and undiscriminating.

-25-

By seeming to challenge the recipients' sovereignty, the act of denying aid tends to harden positions, make diplomacy impossible, and often poisons the entire range of our relations with the country involved.

This is why President Ford and I made clear we opposed the Trade Act provisions aimed at OPEC. These provisions denied tariff preferences to Venezuela and Ecuador, as well as to other countries outside the hemisphere which had not participated in the oil embargo.

-27-

Economic Relations

The principle of mutual accommodation takes on
particular importance as we seek to shape the economic
forces that link us. Hemispheric progress requires the
creation of a new equilibrium of economic benefit. As a
leading industrial nation, the United States has a special
responsibility toward developing countries. Two questions
of particular concern to Latin America--trade and multi-
national corporations-- can play an important part in the
development of a more balanced international economic
order.

-28-

Trade

A new equilibrium in trade is today a vital aspect of global harmony and prosperity. It will require fair and steady prices for exporters of both raw materials and manufactured goods. As Latin American economies grow, so will opportunities for the United States to export more to Latin America. But we, in turn, must be willing to buy semi-processed and manufactured goods from Latin America.

In the next few days the President will send the Inter-national Trade Commission a list of products on which the Administration proposes to eliminate all import tariffs from eligible developing countries for 10 years. Latin America, as the most advanced developing region and the one nearest the U.S. market, will be in the best position to take advantage of these preferences, which will be extended to nearly $1 billion of Latin American exports.

-30-

development priorities. Strengthened cooperation among
our governments is essential if we are to harness modern
productive forces to the common good.

For nearly a year the United States has been working
with Latin American nations on the special problems created
by transnational enterprises and by the technological revolu-
tion. The United States is now prepared

-- to negotiate guidelines applicable to transnational
enterprises and the transfer of technology; and

-- to facilitate and intensify scientific and technological
exchanges and cooperative technological development.

-31-

What Latin America Can Do

What do we ask of Latin America? In asking this we must bear in mind that the nations of the Caribbean, Mexico, Central America and South America are highly diverse.

The stereotyped images of a hemisphere sharply divided between tradition and progress, between the rich, powerful north and weak, poor south are no longer valid.

The images falsify rather than explain.

-32-

The new Latin America has many dimensions. The
peaceful alternation of power between government and
opposition in Colombia, Venezuela and Argentina demon-
strates the strength of political democracy. Brazil's
dynamism symbolizes the region's capacity for economic
growth. The struggle for reform of archaic structures is
evident in Peru. These elements: democracy, growth, and
reform are increasingly characteristic of what has been
termed "an emerging Latin American personality".

We welcome this new strength, self-confidence, and
diversity. Latin American's new leadership has begun to
take significant initiatives toward peace and a new inter-
national order. Panamanian and Peruvian soldiers are valued members

-33-

with UN peace-keeping forces in the Middle East. Last December the Andean countries, following a Peruvian initiative, pledged themselves to seek ways to limit acquisition of offensive weapons. Venezuela has taken the lead in stimulating regional cooperation by offering some new oil revenues to the Inter-American Bank and the Central American Bank for Economic Integration. Working with Bolivia, Paraguay and Uruguay, Argentina and Brazil are pooling their technology and resources to harness the vast potential of the River Plate Basin.

-34-

These initiatives signify Latin America's maturity, but
as Latin America becomes more active in world affairs
maturity creates the expectation of new attitudes as well.

Hutl Fertl as well as North America must link
Let me outline some that are of importance to the United States.

some traditional altitudes

-35-

growing
<u>We are concerned</u> about the/confrontation between the
<u>developing and developed</u> worlds. Motivated by the prospects
<u>of domestic political advantage or the satisfactions of</u>
<u>transitory public retribution, the concerted actions of the</u>
<u>No P</u> Third World nations have at times seriously impeded the
<u>global cooperation so crucial to the progress, we now must</u>
<u>seek.</u> For its part, the U.S. wants the industrial world to
<u>stand open to the concerns and aspirations of the developing</u>
<u>world; to devise its programs with the aim of achieving a new</u>
<u>balance of opportunity and benefit between all nations, developed</u>
<u>or developing, rich, poor or emerging.</u>

The industrialized nations have come to accept the philo-
sophical and practical force of non-alignment. It is therefore
ironic that nations which once chose non-alignment to shield

-35a-

themselves 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

-36-

As the most developed sector of the Third World,
Latin American nations will increasingly play roles in both
the industrialized and developing sectors of the globe. We
welcome this ambivalence because it can make a positive
contribution to the accommodation of these groupings in a
broader international system. Latin America has a unique
responsibility and opportunity to serve as a bridge for com-
munication rather than confrontation. If this opportunity is not
taken, self-indulgent nationalism will continue to assert itself
and the Western Hemisphere will fail to achieve
at the very time when the international community requires
the proceeds + partnerships that are within its grasp.
an elevated sense of global purpose.

-37-

The temptation to blame national disappointments on the
intrigues, strategems and excesses of foreigners is as old
as nations themselves. And for understandable historical
reasons, Latin America has been inclined to seek its inde-

pendence and demonstrate its unity by criticizing the United
 States.

Such attitudes and reactions may have served partisan
purposes in the past. But they are incompatible with the

opportunities before us + the independence solidifies, is imposed on us
international cooperation which the times demand.

We cannot expect total agreement, nor can we accept
a new version of paternalism, in which those with obligations have

no rights, and those with rights have no obligations.

What we seek in the hemisphere is a relationship in which
both Latin America and the United States act in recognition of
the fact that rights and obligations go together. The choice for

-38-

We therefore do not ask nor expect an end to Latin American criticism of the United States. But we do expect the quality of our discourse to reflect a reciprocal respect.

More specifically, we ask that, in the months ahead, Latin America:

-- direct its growing regional unity toward cooperation,

Hisenseles & seek not confrontation. The U.S. seeks to cooperate; but

we will not be compelled to do so by bloc pressure.

-- use its new influence and maturity as a bridge for
cooperation between the Third World and the industrial-
ized nations.

-- recognize that mutual responsiveness must extend
to sensitive political as well as economic matters;
in particular, that the developing international con-
sensus on the protection of fundamental human rights
requires all countries to reexamine their priorities
and take action to foster our common values.

The United States does not seek absolute reciprocity in
the economic sphere from Latin America. The United States

-40-

will continue to meet its special obligations as the richest nation in the hemisphere. But experience teaches that the problems of development cannot be resolved by any one country acting alone. The nations of the Americas need cooperation more than generosity, trade more than aid. We must harness both public and private resources and give management, technology and imagination as high a priority as capital flow.

-41-

as well as raw materials, and protection for
investors as well as workers; producers as well
as consumers;

-- share the costs as well as the benefits of multi-
lateral cooperation, by increasing their financial
contribution to international organizations and
development projects.

What We Can Do Together

Whatever Latin America and the United States ask of each

other we must ask what we can do together.

boldly:

-43-

Over the past two decades Latin America -- more than any other area of the developing world -- has made real progress in economic integration. The Central American Common Market, the Caribbean Common Market, the Andean Pact and the Latin American Free Trade Association have begun to translate paper hopes into physical realities. Roads, hydro-electric plants, pipelines, power grids and industrial plants have started to break down the natural barriers that have impeded the flow of people and goods ever since the first settlements sprang up in the wilderness of the New World.

The recent increase in world energy prices has generated a vast new pool of savings, and thereby creates a major opportunity

-44-

I would like to propose to our neighbors in Latin America and to our friends in the Near East that part of the *unexpected* oil-generated savings be combined with United States technology in a bold new program to further Latin America's industrial and physical integration.

To launch such an effort I recommend that we convene in September of 1975 a special high-level conference of Presidential representatives of the oil exporting states and the members of the OAS.

-45-

This conference would decide in detail how credit may be extended, and be secured, for the planning and construction of the highways, river systems, dams and transport entities which Latin America needs to carry its development efforts forward in the years to come -- and how generous inputs of know-how and science from the United States can enhance this effort.

To support these and similar projects, I propose that the forthcoming OAS General Assembly consider establishing a single

-46-

Our regional financial institutions should also reflect this new equilibrium. The United States will maintain its support for the Inter-American Development Bank. And it will seek a new equilibrium in the Bank's capital structure and its lending policies to reflect the growing financial capacity of other members. I would hope that in the near future an increase in Latin American capital contributions will make it possible for the United States to relinquish its veto power, thereby transforming the bank into a truly multilateral institution.

## Science and Transfer of Technology

-47-

Fortunately, considerable progress has been made in recent months in this area by the Working Group established by the Foreign Ministers last April. The Working Group should complete the assignment entrusted to it.

-48-

- negotiate a first-time statement of principles governing
the transfer of technology by our corporations;

- contribute $5 million to a collectively-funded initiative to train a new generation of Latin American in the management of applied technology.

-49-

-50-

Let there be no doubt of our views. We strongly favor a
world trading system which will meet the needs of consumers for
increasing supplies of commodities at reasonable prices and the
needs of producers for stable and remunerative prices. We do not
oppose arrangements dedicated to these ends. And we will
cooperate fully with consumers and producers to develop mechanisms
that meet these objectives.

-51-

I propose that the Economic and Finance Ministers of the Hemisphere use the forthcoming meeting of the Inter-American Economic and Social Council to begin to identify the specific commodities that could lend themselves to stabilization agreements. Such agreements could cover access to supply, access to markets, producer or consumer collusion, and other rules of the game.

-52-

-53-

The Organization of American States could provide a multi-
lateral framework for such interactions, which should mobilize the
best of our respective universities, foundations, research organiza-
tions and professional associations.

-54-

There is an urgent need for cooperative action to safeguard
the irreplaceable artistic achievements of the great ancient civiliza-
tions of Mexico, Central and South America. This uniquely important
archeological and cultural heritage is now subject to destitution and
looting on an unprecedented scale. This Administration will work
with Congress for the rapid passage of the implementing legislation
to enable U.S. ratification of the UNESCO Convention, which will
do much to curtail the international market in stolen cultural property.

In addition, we will be prepared to meet and cooperate with
Latin American Governments to discuss measures going beyond
the UNESCO Convention to meet emergencies which endanger cul-
turally important monuments and to devise cooperative programs
for international exchanges of national cultural treasures.

> "Our common impulse . . . is to fulfill the promise of America as a continent which beckoned men to fulfill what was best in them.

> "Our common reality is the recognition of our diversity.

> "Our common task is to forge our historical and geographical links into shared purpose and endeavor".

56
-53-

The dream of hope and opportunity that has served the
Americas for almost five centuries is still vivid. It is the
dream of the original promise of this hemisphere, the promise
of a new world. Now we are entering another new world, a new
era. Now we have the opportunity to fulfill the promise of this
hemisphere in a way that has global significance. As Victor
Hugo once said, in praise and encouragement of enlightened
South American policies, "The main highway lies open. May
America travel it, and the world will follow."

- 21 -

preferences to such OPEC countries as Ecuador and
Venezuela, which did not join in the oil embargo -- are
almost always harmful. Automatic sanctions allow no tactical
flexibility. They present other governments with a public
ultimatum; by seeming to challenge the recipient's
sovereignty, they harden positions, encumber diplomacy
and poison the entire relationship.

The Administration supports the purpose of the various
bills which have been introduced into the Congress -- including
one by your own Senator Bentsen -- to modify the provisions
of the Trade Act which involve Venezuela and Ecuador. And
it is prepared to seek the modification of legislation
requiring the automatic cut-off of aid. But as a matter of
political reality a great deal will depend on our ability to work
with the nations of Latin America on new approaches which
give practical assurance of fair treatment. They must

-26-

and obligations among developed and developing countries."

The temptation to blame disappointments on the intrigues and excesses of foreigners is as old as nations themselves. Latin America is perennially tempted to define its independence and unity through opposition to the United States.

The Latin American postponement of the Buenos Aires meeting of Foreign Ministers, ostensibly in reaction to the recent U.S. Trade Act, is a case in point. Some Latin American nations chose to read into this legislation a coercive intent which did not exist; and asked for immediate remedies beyond the capacity of our constitutional processes to provide.

As a result, the next step in the new dialogue was delayed just when it was most needed. The nations of America face

- 37 -

To make research more adequately serve local needs, we will assist the international research centers in Mexico, Colombia, and Peru to extend their projects and programs to other countries in the hemisphere through closer collaboration with national research institutions.

To foster better exchange of agricultural research information, we propose that a new center be established for Latin America, under the auspices of the Hemisphere Consultative Group, and linked to the Agricultural Information Exchange Center of the Smithsonian Institute in the United States.

The United States is prepared to join with other countries and institutions to finance the local extension efforts of the international research centers and the information exchange center.

- 14 -

itself bound by the collective will as a matter of international

law, and so there can be no change in our bilateral relations

with Cuba as long as the OAS mandate *continues*. remains in force.

Since the Quito meeting, however, several Latin

American countries have announced that they are prepared
to resume trade with Cuba. Also since the meeting at Quito,

all the OAS nations have tentatively agreed that the Rio Treaty

majority vote. Several of my Latin American colleagues

have suggested that this agreement in principle might be

applied to the existing Cuban sanctions. I will be consulting

with them with respect to this initiative during my trip to

South America with the attitude of finding a generally

acceptable solution.

- 15 -

If the OAS sanctions are eventually repealed, the United States will consider changes in its bilateral relations with Cuba and in its regulations. [ Our decision will be based on what we believe to be in our own best interests, and will be heavily influenced by the external policies of the Cuban government. ]

We see no virtue in perpetual antagonism between the United States and Cuba. Our concerns relate above all to Cuba's external policies and military relationships with countries outside the Hemisphere. We have taken some symbolic steps to indicate that we are prepared to move in a new direction if Cuba will. Fundamental change cannot come, however, unless Cuba demonstrates a readiness to assume the mutuality of obligation and regard upon which a new relationship must be founded.

- 17 -

tariffs for developing countries for ten years. Latin America,
as the most advanced developing region and the one nearest
the U.S. market, will be in the best position to take advantage
of these preferences. The list will benefit nearly $1 billion
worth of Latin American exports.

Among the economic issues affecting Western Hemisphere
relations none looms larger than the transnational corporation.
The transnational corporation has a demonstrated record of
achievement as an efficient - - and indeed indispensable --
source of technology, management skill, and capital for
development. At the same time, the transnational character
of these corporations raises complex problems of governmental
regulation, and has aroused concern in Latin America over
the relation of their activities to domestic political and
economic priorities.