LATIN AMERICAN TRENDS

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP79T00865A002000160001-3
• Release Decision: RIPPUB
• Original Classification: S
• Document Page Count: 17
• Document Creation Date: December 20, 2016
• Document Release Date: February 9, 2006
• Sequence Number: 1
• Publication Date: October 22, 1975
• Content Type: NOTES

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Latin American Trends
DIA and DOS review(s)
completed.
Secret
October 22, 1973
No. 0532/75
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CONTENTS
October 22, 1975
Peru: The Marcona Affair Enters a New Phase . 1
Panama: Cuba Visit Reflects Torrijos
Strategy, Problems . . . . . . . . . . . . . 5
Dominican Republic: New Perspective
on Cuba . . . . . . . . . . . . . . . 7
Colombia: Praise for the President .
O:RIT Delays Reorganization . . . . . . . . . . 13
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Peru: The Marcona Affair Enters a New Phase
Despite signals from President Morales Bermudez
that he desires a quick and amicable settlement of
the Marcona compensation dispute, the latest Peruvian
maneuvers indicate that the government feels bound by
many of the encumbrances that slowed similar negotia-
tions during former president Velasco's administration.
Last Friday, the government announced publicly that
"conversations" with Marcona had terminated, thereby
bringing to an end the indecisive first phase of the
negotiating process. Marcona Mining Company, the
large, US-owned iron-ore complex, was expropriated by
Velasco last July, and preliminary talks between com-
pany officials and government negotiators made virtual-
ly no progress prior to Velasco's ouster on August 29.
0 owing Morales Bermudez' assumption of the presidency,
high-level government spokesmen, including the new Presi-
dent, told US Embassy officers and Marcona officials
that resolution of the compensation dispute had high
priority.
The continued influence of radical, anti-American
military and, in a few cases civilian, advisers is work-
ing to slow the process, however. In addition, the
government apparently feels itself under pressure from
the news media not to "give in" to "Yankee" pressure.
Although Morales Bermudez ideologically is much less
radical than Velasco, the President at this point is
still consolidating his position and appears unwilling
to risk a serious intra-government split over this issue.
He is already having to cope with serious labor problems
and recalcitrant leftist unions probably would seize on
a government-Marcona settlement as further proof that
the regime lacks a true commitment to the Peruvian
workers' cause.
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In addition to these domestic political factors,
there is an apparently deep-seated hesitancy on the
part of Peru's military leaders to deal--much less
compromise--with private US businesses. The feeling
that it is somehow demeaning for a revolutionary gov-
ernment to sit down and bargain with multi-national
corporations undoubtedly has been reinforced as a re-
sult of the relatively satisfactory "Greene agreement"
reached with the US government in 1974 after protracted
talks.
Thus, the government's announcement last Friday
that "conversations" with Marcona had broken down appears
aimed at moving the discussions onto the government-to-
government level. From Lima's point of view, this will
not only dispel the appearance of official dealings with
"imperialistic" trans-national corporations, but should
ease the psychological burden of eventually reaching an
indirect agreement with the company. According to the
embassy, there may also have been a practical, economic
reason for the public breaking of talks with Marcona:
the company will no longer be able to tell its buyers
that it is negotiating with the government and that they
should therefore not yet agree to any new shipping agree-
ments with the government. Peru may hope that these
buyers will now be more receptive to breaking their sales
and shipping contacts with Marcona.
Althouqh concrete government-to-government negotia-
tions may soon begin, and the chances for a satisfactory
solution are better now than under Velasco, there is
little evidence from which to conclude that Morales
Bermudez will be able to free the government from the
bureaucratic and ideological restraints that consistently
have prevented quick resolution of economic disputes
between Peru and the US. F777 I
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Guatemala-Belize: A Counter Action
Guatemalan President Laugerud, convinced that
the British are undertaking a major military buildup
in Belize, has said he is going to order more troops
to Poptun, an army base 15 miles from the Belize
border.
This development came three days after Laugerud
received reports of the arrival in Belize of British
helicopters and assault boats on October 12. The re-
ports he received of the reinforcement were exagger-
ated, but efforts by the US Embassy to set him straight
did not allay his concern. Said to be disturbed and
under pressure from his military officers to take
countering action, Laugerud told the US ambassador last
week that he was doing everything he could to avoid a
conflict, although the British were forcing him to re-
act. "If the British leave us with no alternative to
force, we will use it," he said. Although there may
be pressure from below, Laugerud certainly sees some
advantage in describing a dire situation. He would like
the US to mediate the dispute--in Guatemala's favor, of
course.
Our defense attache visited Poptun base on October.
17 and found that troop strength there had been increased
to about 500 troops, including a paratroop battalion.
The normal force there is about 350. The additional
troops that Laugerud presumably will send most likely
had not yet arrived. Much smaller contingents of soldiers
are located at three other camps near Poptun. There was
a noticeable lack of transport and ammunition at Poptun,
but the defense attache noted that this would not prevent
moving on foot over the Belize border.
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Laugerud is also concerned about Britain's inten-
tions in the UN. He fears the UK is going to push
through a resolution that will be unacceptable to
Guatemala. He is deeply disturbed by he attitude of
British Foreign Secretary Callaghan./
How this sentiment will play out at the UN is not
yet clear. This week, the UK was circulating a draft
resolution among Caribbean UN delegations and was to
show it to the Guatemalans at the same time. Guatemalan
officials have not been consulted on the language, leaving
them little chance to influence the wording. What the
British are apparently hoping for is a resolution that
the Guatemalans can acquiesce in at the most. Some
mention of future negotiations on Belizean independence
will be made, but London's UN representative has told us
that there is "no hope in hell" of a resolution to which
the Guatemalans could completely agree.
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Panama: Cuba Visit Reflects Torrijos Strategy, Problems
This week's visit to Cuba by an official Panamanian
military delegation--the first since relations were re-
newed in August 1974--is part of Torrijos' continuing
effort to demonstrate his Third Woridish independence
and to pressure the US into a more forthcoming treaty
stance.
The trip, highlighting revolutionary solidarity,
shores up Torrijos' left flank. An editorial on the visit
by Danilo Caballero, the leading commentator of semi-
official Radio Libertad, stressed that this was a sover-
eign decision by a revolutionary government; this slant
should help soothe some of the ultranationalists who have
been critical of Torrijos "caricature" of a revolution.
Torrijos is due to travel to Cuba at the end of the year.
Although Lt. Col. Armando Contreras, National. Guard
G-3 and the leader of the delegation, publicly noted that
he would "become acquainted with" the armaments of Cuba's
Revolutionary Armed Forces, the trip almost certainl
does not presage an deal f
Torrijos calculates t at any concern raised in the US by
the trip is tolerable and could well work to his ad-
vantage in the treaty talks. The Panamanian leader
similarly recognizes, however, that any actual arms deal
would provoke such a hostile reaction from some US
quarters that it would severely dim prospects for suc-
cessful negotiations.
Torrijos is moving cautiously, even with uncertain-
ty, toward his embrace of the Third World--and always
with an eye on the treaty negotiations. Last year, he
waffled considerably before finally establishing relations
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with Cuba. His decision this year to join the non-
aligned was also marked by initial hesitation. A
Chinese trade mission presently visiting Panama has
been accorded relatively low-key treatment--there
was no press coverage at all for the first five days
of the two-week stay. Similarly, the press has
ignored the arrival of the chairman of the London-
based Russian bank Moscow-Narodny Ltd in Panama to
investigate the possibility of establishing an office
in that leading international banking center.
Torrijos has to pick his way carefully as he
faces conflicting international and domestic pressures.
At home, as he offers balm to the sometimes volatile
left, he remains well aware of the concerns of the
still largely distrustful business community. With
regard to the US, he has to choose moves that will at-
tract further international support for Panama and so
put pressure on the US but avoid entrenching conserva-
tive US opposition to a treaty. So far, Torrijos has
moved relatively slowly and carefully. He is signalling,
however, that unless he begins to receive demonstrable
indications of a more forthcoming US attitude that he
can hold up at home, he will accelerate his own efforts.
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Dominican Republic: New Perspective on Cuba
Even the Dominican Republic, which in 1959 became
the first Latin American country to break relations
with Cuba and has long feared Castro's export of the
revolution, may be getting ready to join the movement
toward improved relations.
On October 12 a five-man delegation of Cuban Com-
munist party officials--including Osvaldo Cardenas, an
important figure in the Central Committee's American
department--arrived in Santo Domingo at the invitation
of the "Committee of Friends of Cuba." It is the first
visit by a party delegation since relations were broken.
Although the visit is unofficial, the Cubans could hard-
ly have entered the country without President Balaguer's
approval. Other indicators include a visit by a cabinet
subsecretary to Havana for an international conference
and the publication of a paper by the government's Center
for Export Promotion calling for economic contacts with
Cuba. I
The government's handling this month of the amateurish
guerrilla effort that began on June 1 when three Puerto
Ricans landed three Dominicans on the coast fits into this
pattern. The government, after quickly capturing the
Puerto Ricans, originally charged that the three men they
had brought were guerrillas from Cuba. This produced
widespread suspicion that the government had concocted the
story to cover a leftist roundup, but this month police
captured two of the guerrillas and later killed the third.
All three men had spent considerable time in Cuba. In ad-
dition, the operation was apparently backed by the Puerto
Rican Socialist Party, which is closely linked to Havana.
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Significantly, however, despite several press con-
ferences with the captured guerrillas, there has been
no further highlighting of a Cuban connection.
The warming trend is likely to continue, although
at a cautious pace. Like most of its neighbors, the
Dominican Republic probably sees little future in a
continued hostile stance that could eventually leave
it isolated in the Caribbean.
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Colombia: Praise for the President
President Alfonso Lopez Michelsen returned home
from his state visit to Washington last month a po-
litically strengthened man. No one, neither friend
nor foe, could seriously fault Lopez' management of
the visit's two principal themes--his calling atten-
tion to Colombia's general aspirations in its rela-
tions with the US, and his broader advocacy of other
Latin American causes.
Domestically, Lopez' stock has been buoyed,
erasing some of the negative effect of the state of
siege he was forced to declare in June to combat guer-
rillas and to help contend with. demonstrations by
students and the poor against various economic dis-
locations. The President has hardly regained the
impressive mandate he enjoyed after his overwhelming
election victory last year or during the early months
of his tenure, but he has apparently rebounded some-
what from his summer ebb, when army criticism led to
the dismissal of several high-ranking officers and
stirred very un-Colombian thoughts of military inter-
vention in politics.
Lopez' statesman image at home benefited as well
from his injection of other Latin nations' problems
into his talks in Washington, which also moved him
another step toward the Latin American leadership role
to which he aspires. He took particular pains to de-
fend the Panamanian position in the ongoing canal talks,
aware no doubt that he or a successor might some day
need Panama's re-endorsement of Colombia's 1903 guar-
antee of free naval transit rights through the canal.
Whether Lopez can ride the crest of popular ap-
proval will depend almost entirely on domestic circum-
stances over which he has little control. His most
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serious challenge remains security, principally
against leftist guerrillas. In addition, some right-
wing counter-terrorism may be appearing. This could
pose Lopez the difficult choice between turning the
military against what are presumably its over-exuber-
ant conservative allies and looking the other way,
perhaps hoping that right-wing terrorists, unlike the
military and civilian security services, might make
some headway against the country's traditional leftist
guerrillas.
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ORIT Delays Reorganization
Latin American labor leaders failed to produce
a plan for revitalizing the inter-American labor
system, ORIT, in time for the World Congress of the
International Confederation of Free Trade Unions
(ICFTU) now being held in Mexico. Still, they are
angrily resisting attempts by other ICFTU affiliates
to impose remedies on the ailing ORIT and have won
approval to continue their own efforts to reorganize.
The subject will be addressed at an extraordinary
congress next May, probably in Caracas.
.European labor officials have attacked ORIT for
its ties to the AFL-CIO, accusing the Latin trade
unionists of falling under US domination and failing
to represent the interests of Latin workers. Several
Scandinavian unions were threatening to pull out of
the ICFTU if ORIT were not disbanded and replaced by
a new, Latin-only organization. ICFTU affiliates
have been impatient with ORIT's structural and financial
disarray in recent years, annoyed at the Latins' ac-
ceptance of AFL-CIO's leading role in ORIT and its dis-
association from.ICFTU, and disgusted with ORIT's fail-
ure to condemn the repression of unionism in Chile.
For their part, the Latin labor representatives
remain divided on many internal ORIT matters, but they
have stood solidly together in bitter opposition to
interference from outside the region. Another, and
relatively new, point of agreement is to keep the link
with. US labor, which provides much needed financial as-
sistance. Beyond that, it is difficult to find any
practical or ideological matter that unites Latin
American labor.
As a regional forum, ORIT is rife with peculiari-
ties. Two of the most influential affiliates have
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almost nothing in common: Venezuelan labor, fiercely
independent, operates in a truly competitive political
environment, while Mexican labor is a captive of a
highly controlled government system. Argentina, which
has the strongest trade union movement in Latin America,
does not participate in ORIT, which it too regards as
US-influenced. ORIT's general secretary is a Paraguayan
with no constituency of his own. The other groups in
ICFTU see little to give them confidence that the Latins
will be able to work out their own problems, but they
have backed off for now, in the face of vehement Latin
insistence. If the Latins try to prolong their re-
organization beyond May, the ICFTU will probably make a
stronger effort to intrude.
Meanwhile, the ICFTU congress, which opened on
October 19, has departed from its agenda and become an
angry forum for a different kind of attack on US labor.
Series of speakers have condemned the US Government
decision to pull out of the International Labor Organi-
zation (ILO), accusing the administration of selling out
to the AFL-CIO and the AFL-CIO of abandoning ILO to the
Communists. An ILO official had earlier warned the
congress of the political risks and disservice to labor
involved in using the organization for the "wrong purposes."
Other speakers acknowledged that ILO's recognition of the
Palestinian Liberation Organization and other controversial
political positions posed a problem, but urged the US to
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