SPECIAL REPORT ON PROPOSED U. S. POSITION FOR THE RIO CONFERENCE - WORKING GROUP ON NSC 5432/1

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP80R01731R003000030002-8
• Release Decision: RIPPUB
• Original Classification: T
• Document Page Count: 6
• Document Creation Date: December 15, 2016
• Document Release Date: April 23, 2004
• Sequence Number: 2
• Publication Date: October 11, 1954
• Content Type: MF

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COPY NO.
OPERATIONS COORDINATIT BOARD
Washington 25, D. C'
NSC REVIEW
COMPLETED,
10/31/03
October U, 1951.
SUBJECTa Special Report on Proposed U. S. Position for the
Rio Conference - Working Group on NBC 5432/1.
The attached special report of the working group on NSC
5432/1 is transmitted as a basis for discussion at the October 13
meeting of the status of U. S. policy preparations for the Rio
Conference in light of OCB's responsibilities under NSC 5432/1.
Mr. Henry F. Holland, Assistant Secretary of State for Inter-
American Affairs, and Chairman of the Cabinet Committee on the Rio
Conference$ and a representative of the Treasury Department will
be present for the discussion.
mei B. Staats
Special Report on Proposed U. S.
Position for the Rio Conference,
dated 10/11/54.
COB File No. 54
Downgraded to CONFI321TIAI.
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TpPSECRET
SPECIAL REPORT ON PROPOSED U.6. PO,51TICIIIS FOR
THE MO COF { "ONCE
October 11, 195'-
A subcabinet committee is now preparing proposed U.S. poriticn
papers for the-conference on U. . - Latin American economic re-
la`Mons o '6e ie gt Ito de_ Janeiro startzn l~gvember ti22~ 1 4.
TMale-IFe papers are still undergoing revision, it i;3Yundersto,d
that thr._ ormraittee . has decided e
upon the genQralpolicis ~~hic they
reflect,. The t:orking Group has studied the proposed position paper::
in-the 11-ght of NSC 5432/1. The purpose of this report is to` call
to the attention of the OC:B cases in which the forking Group be-
lieves the proposed positions fall short of caier,~ nz j? aut adeguatel.'
't;2ie abjectivos and policies of NSC 5432/1.
X; General Need to Reflect a Broadened and Nore Constructive Poli;
The Working Group understands TN?SC 5432/1 to envisage a broade w d.
more constructive and, rape f#~rmat ve U. S. economic policy vuard
Latin America as an essential measure for achieving basic U. S.
objec"t ves In that region. It is the opinion of the Working Grout
that, in the over-all, the presently proposed subcabinet position
papers do not provide such an_is~v.:eosnpiocy. The
oZ- nsMa lions which we have relied on in forming this judgment
are these :
a, If the policies enumerated at Rio are to be siiccess-ul
in promoting basic .0. objectives, as set forth 'in NSC 5432 Z.,
they must: (1) actually make an effective a }cl ,qtabstAntial contri-
butiorio the improvement of economic condition, in Latin America;
` }`convic :eke prcaom, nant reasonableH elerr~_qtrs in T,,a in Amf-rice
is_genunely interested in promoting the welfs.re
and progress of that regron. ..
b. Hemisphere solidarity may be jeopardized if the U.S.
evades or p`rocrastinateTs. Latin America will press i'or, and U.S.
?sti M-a try as "ai as 'possible to give forthright answers to Latin
.American proposals either by accepting them, rejecting them or
offering realistic alternatives.
c, While Latin America may propose many changes in U. b.
poli,,, the ,predom rant) reasonable elements in Latin America will
't" ex ect the nU. to accept all of those new policies. :ae
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elements, however, t ~.1 fl9 ,b sat of Vdawith... what they would con-
cider simply a reaffirmatisu~ of present U , po' .1cies. To bonvimt
'hse elements that the U. S. is genuinely interested-iii promo`.ing
the welfare and progress ,of that region, the U. S. must broaden and
clarify some of its present policies.
The Working Group believes that the U: S. position, for the Rio
Conference, should be made more effective by taking a more positive
stand regarding U. S. assistance to national and regional efforts
for economic development.
In particular, the Working Group believesy that the pressen po
sition papers do not adeq to carry out specific coursers of action
outlined nNSI ~, which would serve this end. Examples are
used in uection of this memorandum.
II. Need to Car out Specific Courses of Ac ion Out 'ned in
NSQ 1432/1
a. Para rah 9 . of NSC 5432/1 states that, only if stable,
to -term rra pol1c es by the U. S. and financing of soon
economic deve_1opie1X projects by private capital, IBRD and EXIM Bari:
prove inade uate, the U. S. should finance through development
a" s_nance loans the initiation or acceleration of projects in the
T,-5 _`interest.
The presently proposed subcabinet osition is that the
U. S. will give no Th8ication`of e possibility of U. S. deve" opmi f
loans outside the I sank at the Rio Conference but trill s ply
,
reaffirm its present policy tfia the . S., through the XIM Bank
w supplement the lending of the International Bank to the extent:
necessary to fulfill all applications meeting the criteria eni erat(d
by Secretary Dulles at Caracas.
FOA, for example, plans to propose the following to the
subcabinet committee as a substitute position:
"The United States, through the Export-Import Bank, v M
supplement the lending of the International Bank for economic
development purposes to the extent necessary to satisfy all
applications for loans meeting the criteria enumerated by
Secretary Dulles at Caracas. In addition the U. S. shouli
offer to match funds up to $100,000,000 for the establish'ient
of a Latin America Bank for economic development which would
be under Latin American management and would make loans for
projects not eligible for IBRD or Export-Import Bank financinW:.
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There is an apparent difference as to interpretation of
paragraph 9 Q. which is important to the position to be taken at
Rio. Under one view, it can now be said that the other sources are
inadequate particularly since the EXTl'i Banks charter apparently
permits financing only projects 3involving the export of T1. S.
capital--and that, under paragraph 9 ,.,:the U. S. should now rnder-
a b finance development projects in the U. S. interest which
are not financed by EXIM Bank or other sources.. The other view is
that paragraph 9,Q. contemplates a substantial-test-period in which
to determine the adequacy of the other sources before the U. S.
considers providing development loans outside present EXIM Bank
policies.
The Working Group believes that U, S. economic policy
toward Latri'Xmerica would be made more constructive and effective,
as envisaged by INTSC 54,12/A, if an interpretation were made that the
U. S. is now prepared, under spiel lid conditions, to provide
d'eve1opniin loans for projects not eligible for EXIM Bank financing;
't f' this position were announces yatRio.
b. Paragraph 9 g. of NSC 5432/1 states that the U. S. should:
"g. Cox ,ls er symp.athetiva y, but only on individual merit.,
any proposal by Latin American initiative to create real
ec~`"im htions androu i to promote increased trade, _URT technical cooperation investment, and to eoncer sound
development plans."
It is anticipated that the Latin American nations wilt. off=-
at Rio a number`of proposals for regional economic actions and
groupi s to promote trade and development. The Worki ,Group-ques-
veTthe positions recommended by the subcabinet committee
eg such anticipated proposals, or simil8> `p?' pbt 1s siig tieete
by U; S. agencies, reflect the "sympathetic consideration" which
paragraph 9 Q. contemplates.
The committee, for example, rejected a proposed U. S.
position favoring establishment of a Latin American Bank for Econoai
Development to which the U. S. would match up to $100 million of the
original capital contributed by Latin American individuals or govern-
ments but would leave the management in Latin American hands. The
committee also rejected a proposed U. S. position favoring the
establishment of a regional Payments Union to which the U. S. would
loan $50,000,000 for the initial swing account.
The two regional actions which the subcabinet committee hu,,
decided to favor are: (1) annalegionl discussions of development
programs and (2) discussions of possible hepiere preferential
trade arrangements.
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The Working Group questions whether the predetermined
positions on regional actions to promote trade and development,
which appear largely to be negative, are adequate to meet the
intent of paragraph 9 Z. of NSC 5432/1,
c. Sspawent to thepre aration of the position
.1i papers 'y tt f
subcabinet commit' ee, IBC 5432 1 was approvedby the President.
Courses of action enumer erein included paragraphs 9.d. and
9 h., the contents of which were not found in the older policy paper
on this area (NSC 144/1). It is, of course, anticipated that the
subcabinet committee will take under consideration the utilization
of the authority in the Agriculture Trade Development and Assistance
Act
be 195544 r(per d p4r raph 9 n.). Along these same lines the A&gati.
should of
with concrete proposals for_}rcre sgd,speQ e!
tra nin of n A m ricons in the U 8. in tl a fie c s of fi ce
la o management, agriculture, business and other specialized
fie ds as a means of achieving eccnomlc development in the area
(paagraph 9 d.).
R? ommg io~+: The Working Group recommends that the OCB consider
whether the proposed U, S. positions for the Rio
Conference fall short of the objectives and polieie:3
enumerated in NSC 5432/1, and that it advise the
subcabinet committee of any shortcomings of the
presently proposed positions.
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