CHANGES IN ARGENTINA FOREIGN POLICY - 1978/08/11

• Document Type: SPECIALCOLLECTION
• Collection: Argentina Declassification Project - The "Dirty War" (1976-83)
• Document Number (FOIA) /ESDN (CREST): 06627992
• Release Decision: RIPPUB
• Original Classification: U
• Document Page Count: 7
• Document Creation Date: April 3, 2019
• Document Release Date: April 12, 2019
• Publication Date: August 11, 1978

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SEcaAr-- -�-k-i
CENTRAL INTELLIGENCE AGENCY
National Foreign Assessment Center
11 August 1978
INTELLIGENCE MEMORANDUM
Changes in Argentina Foreign Policy
Summary and Key Judgements
Por the past two years, President Videla has sought
to comply with US requests to improve human rights in
Argentina and to accept:international restrictions on
nuclear development without providing his domestic op-
ponents with an opportunity to exploit deep-rooted
Popular feelings of xenophobic nationalism. Videla wants
good relations with Washington to continue, but a series of
US restrictions on Argentina's access to loans and credits
have convinced him and his advisers that they must adopt a
more pragmatic foreign policy zha t lessens Argentine de-
pendence on the US.
The� return of domestic tranquility to Argentina
coupled with its sound financial standing and its recog-
nized technical expertise in nuclear energy are proving to
be strong incentives for many countries to respond to
Buenos Aires' initiatives. Even if US relations with
Argentina were to improve dramatically, it would be diffi-
cult for Argentine leaders to ,alter .he independent course
they have embarked on.
This memorandim was prepared by the Latin America
Division of the Office of Regional and Political Analysis.
It was requested by the Assistant Secretary of State for
Inter-American Affairs. Ouestions and comments may be
addressed 3.5(c)
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The Stimulus for Change
The current reappraisal and shifts in Argentine foreign
policy directly respond to the series of rebuffs felt by the
Videl4 government in its relations with Washington. Never-
theles, Argentine governments have long recognized the need
to inject greater vitality into their foreign policy, so
that a more assertive and more consciously directed inter-
nationalism is long overdue.
Decades of preoccupation with domestic crises have left
Bueno$ Aires with a reactive though generally pro-Western
foreign policy while its neighbor and rival, Brazil, has
succeSsfully reached beyond regional limitations to find
itself increasingly treated as an apprentice great power.
The Brazilian experience, among other factors, has brought
home to Buenos Aires the awareness that a broad-based foreign
policy can be an effsctive instrument for national development.
This is clearly a direction in which Argentina wants to
move.
This larger context for Argentina's foreign policy
might have remained a distant ideal, however, without the
stimulus of Washington's recent initiatives, which have been
interpreted in 'Buenos Aires' as disfavor. US. criticisms of
Argentine huthan rights and nuclear policies coupled with the
practical effects of restrictions on Argentina's access to
loans and credits for high cost industrial imports were
impossible for Buenos Aires to ignore.
Argentine resentment toward what it regards as US
interference in its internal affairs strikes deep nation-
alistic chords. Argentines have long realized that their
predominately agricultural economy forces a dependence on
the outside world for markets, sophisticated technology,
and investments. They understand too that their economic
position leaves them vulnerable to unwanted influences. .
Past efforts by foreign governments, chiefly Great Britain
and the US, to shape political developments in Argentina
have made the public susceptible to manipulation by leaders
playing on xenophobic nationalism.
Early in the independence period, for examvle, the
dictator Rosas increased his popular appeal by defying a
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British and French blockade of Argentine ports. A more
mo4rn example is in the mid-1940s when Peron exploited US
opp6sition to his candidacy as the key issue in his.presi-
dential campaign_
President Videla, far from being a demagogue himself
and inclined toward rather than away from the US, must
nevertheless respond to what the Argentine public perceives
as discriminatory treatment from Washington. His attitude
toward a correct relationship with the US relates to this
public mood, to the survival of his own regime, and to the
economic and political reforms he intends to carry out.
Videla's Difficult Balancing Act
Political realities in Argentina circumscribe a favor-
able response from Videla to US policy initiatives. Although
the cost of invoking Washington's displeasure is potentially
heavy in the financial sphere, it is still less severe than
the domestic cost of seeming to acquiesce to US pressures.
This latter course could lead to Videla's being pushed aside
by military extremists and to the formulation of even worse
policies from the US point of view.
In the economic sphere, productive US-Argentine relations
woun mesh ideally with Videla's aims. For the past two
years, the. President and his able Economy Minister, Martinez
de Hoz, have sought to reverse an economic decline by stimulating
exports and attracting foreign capital. Isolation from the
US in no way fits that goal. Videla, moreover, is personally
comfortable with the general thrust of Washington's human
rights policy. He has attempted to reduce repression by
Argentina's security services and seems sincerely interested
in gradually preparing the way for a return to civilian
rule. He is frequently stymied, however, by the strength of
a military clique that wants to end even a pretense of a
return to democracy. This domestic opposition perceives a
need to maintain a strong campaign against those whom it
believes to be subversives, and, in fact, would like to move
the economy toward some form of corporate state.
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Although Videla must operate within the limits of these
constraints, his interest in preventing the relationship
with Washington from deteriorating any further is clearly
reflected in the damage-limiting style he has adopted in
difficult situations. As a demonstration of good intentions
in the human rights field, for example, he has directed that
a concerted effort be made to comply with US requests for
the release of political prisoners held under emergency
procedures.. At the same time, however, he has been careful
to entire that any slackening of anti-subversive measures
remains consonant with the perceptions of his security chiefs
regarding the extent, of the terrorist threat. Any con-
cessions on nuclear policy are also a highly sensitive
issue. For instance, Videla made a point of adamantly
insisting on Argentina's right to proceed with a nuclear
power program, when he went against the advice of many of his
advisers and signed the Tlatelolco Treaty. Overall, official
protests against US moves have been reserved for instances
where -the Argentines felt a sense of national humiliation,
such as the well-publicized denial of military and economic
assistance; their lesser complaints have been conveyed
privately and with considerable care.
The New Diplomacy
The Argentine Foreign Ministry, instead of pursuing-a
vigorous rhetorical defense against various US pressures,
has taken the offensive in another direction. Having come
to the conclusion that it can no longer count on doing
business with the US, the government is combatting the
diplomatic isolation it feels by turning elsewhere with new
and more pragmatic goals.
Certain aspects of ;this .,.new.. diplomacy, especially the
courtship of Communist nations, may be posturing. But the
seriousness of the overall effort seems indisputable. An
extendive groundwork has. been laid by diverse and intense
diplomatic initiatives, and the early achievements have been
impressive. Foreign Minister Montes has demonstrated
considerable vision in articulating the new directions,
while ,arguments of economic pragmatism have assuaged anti,-
Communist critics.
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The Argentines have long felt a close kinship with
Western Europe and, despite the human rights issue, govern-
mant-to-government relations have remained relatively good.
For example, Paris--despite some domestic pressure over
Argentina's human rights record--has lost no time in signaling
its willingness to replace the US as a primary source for
Argentina's military needs and may provide military training--
a field dominated by the US since World War II- Argentina
has already purchased 170 jet engines from the French.
Franceand several other nations, including Japan and the
Soviet Union, have been approached by Argentine economic
officials, who are distressed by the steadily closing doors
of US financial institutions. German and possibly Italian
firms are anxious to replace Canada and the, US in the nuclear
area.
The .Argentines are also becoming more active on Third
World issues. Although they have been encouraged to do so
by the French, the move coincides with Foreign Minister
Montes' expressed intention to cultivate new relationships--
free of ideological constraints. At the nonaligned foreign
ministers conference in Belgrade last month, Montes refrained
from singling out the US for criticism, but he did condemn
the tying of loans to political conditions and the setting
of restrictions on the transfer of nuclear technology-
Montes termed this "a new form of imperialism" which he said
is being selectively applied by powerful nations to developing
countries with which they do not share direct strategic
interests.
� Motes' recent ihitiatives have served to enhance his
personal prestige at�the architect of foreign policy, a
field in which Argentine presidents have traditionally
exercised principal authority. The long-range consequences
of this development could be to depersonalize foreign
policy decisions while strengthening the already consid-
erable professionalism and bureaucratic expertise within the
Foreign Ministry.
Meanwhile, the Ministry of Economy has been promoting
the expansion of commercial relations with the Communist
countries. As the major rationale, it has pointed to
Argentina's highly favorable balance of trade position and
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the attractiveness of East European markets for Argentine
exports:, particularly agricultural products. Even before
the current review of foreign policy began, Martinez de Hoz
managed to obtain ratification of a number of agreements
with Poland, Romania, and the Soviet Union, which had long
been delayed by conservative elements within the military.
This anti-ComMunist bias, shared by Pres5.dent Videla, precludes
the purchase of Soviet arms as well as close diplomatic
alignment with either Communist or radical Middle Eastern
countries.
In matters of foreign economic policy, Economy Minister
Martinez de Hoz, who has close personal ties to US financial
leaders has been taking a steadily more active and independent
rola. In May he visited China and negotiated an agreement
to export approximately 1 million tons of grain annually for
the next three years. He recently hosted a farewell dinner
for the Soviet commercial attache at which he praised the
Soviets for their willingness to participate in the Yacyreta
hydroelectric project, for which the US has refused to
provide credits. An Argentine -economic delegation visited
Libya, Algeria, and Iraq last month to begin implementation
of previously signed bilateral agreements.
Junta member Admiral Massera, whose service staffs the
Foreign Ministry, recently visited Romania where he laid the
groundwork for Foreign Minister Montes to sign an agreement
for cooperation in nuclear energy. Martinez de Hoz may
visit Bucharest later this year, and a visit by President
Vidala is a possibility. Trade is being contemplated with
other East European countries as well.
The USSR, which Montes plans to visit later this year,
is a relatively minor trading partner. Nevertheless, the
Soviets import far more from Argentina than they export and
would welcome an opportunity to correct this imbalance_
Argentina increasingly views its nuclear power program--
the most sophisticated in Latin America--as a powerful
foreignqpolicy instrument. Last month the head of the
Argentine Atomic Energy Commission, Admiral Castro Madero,
attended the inauguration of a power reactor that Argentina
provided to Peru. The Admiral made the point that this
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marked the beginning of Argentine nuclear cooperation and
technolOgy transfer with a numbitr of Latin American countries,
including Bolivia, Uruguay, and Ecuador. In addition to
enhancing its prestige both at home and abroad, Argentine
nuclear exports will earn foreign exchange and provide
greater' opportunities for the employment of Argentine
technicians,
Outlook
Although US pressures have obviously persuaded Argentine
leaders to intensify their search for new relationships,
they have long, wanted to regain their former pretige in
Latin America and to break out of what they perceive as
geographic isolation from the rest of the globe. The return
of domestic peace, expertise in nuclear energy, and a strong
standing in international financial circles--thanks to the
economic manage=ent skills of Martinez de Hoz--have provided
the means to follow a more sophisticated and independent
foreign policy.
The Argentines obviously want to maintain good relations
with Washington. Not only is the US their primary source of
imports, but a serious deterioration in relations would have
a negative impact on international financial institutions.
At the same time, however, the widening of Argentina's
involvement in international affairs will cause its relations
with the US to .becomeboth more complex and more balanced
than they have been.
Even if US relations with Buenos Aires were to improve
dramatiCally, it would be difficult for Argentine leaders to
alter the independent course they have embarked on. Their
successful efforts to forge new ties have bolstered their
confidence and Prestige, and have expanded the horizons of
their diplomatic options. Since many of the agreements they
are no signing are long range in scope, they will doubtless
lead to other forms of cooperation. Despite the strong
economic logic and mutual profitability of good relations
between Argentina and the US, their continuation can no
longer be taken for granted.
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