STAFF NOTES: LATIN AMERICAN TRENDS

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP86T00608R000300120030-4
• Release Decision: RIPPUB
• Original Classification: S
• Document Page Count: 18
• Document Creation Date: December 20, 2016
• Document Release Date: August 7, 2006
• Sequence Number: 30
• Publication Date: July 30, 1975
• Content Type: REPORT

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Secret
Latin American 'rends
State Dept. review completed
Secret
132
July 30, 1975
No. 0520/75
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LATIN AMERICAN TRENDS
This publication is prepared for regional specialists in the Washington com-
munity by the Western Hemisphere Division, Office of Current Intelligence,
with occasional contributions from other offices within the Directorate of
Intelligence. Comments and queries are welcome. They should be directed to
the authors of the individual articles.
CONTENTS
July 30, 1975
Chile: Outcast At The UN . . . . . . . . .
1
Venezuela: New AD Secretary-
General . . .
3
Venezuela: Colombian Demarche
for Gulf Condominium . . . . . . . . . . .
4
Panama:
Treaty Stand Gets Approval. . . . .
6
Ecuador:
Coping With Civilians. . . . . . .
8
Trinidad-Tobago: chat Makes
Eric Travel? . . . . . . . . . . . . . . .
10
Mexico: Border Industries in
Trouble
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Chile: Outcast At The UN
Stories circulating in UN circles suggest that
an all-out carrpaign is being promoted to expel Chile
from the coming General Assembly meeting. Although
the extent of anti-Chile sentiment is difficult to
gauge, there is little doubt that the image of the
Pinochet government has dropped to an all-time low.
Among the reasons cited by Chilean UN delegates
for this negative attitude are:
...President Pinochet's refusal to allow a sched-
uled visit by a UN human rights investigating
group.
...The Chilean government's welcome to a South
African Davis Cup team.
...Pi.nochet's recent statements barring elections.
...Handouts circulated among African and Asian
UN missions by the Cubans reproducing extremist
and racist articles on the UN appearing in the
Santiago press.
...Reports circulating at the UN on possible action
by the Chilean junta to outlaw the Christian
Democratic Party.
The chairman of the UN human rights investigating
commission is extremely bitter over Pinochet's abrupt
decision to turn back the group earlier this month after
it had traveled as far as Lima. His resentment toward
the Pinochet government was summed up in his statement
to the US delegation at the New York headquarters:
"People just don't behave like that." The commission's
report, which is due by the end of August, will probably
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portray the jur..a in an unfavorable light, and it is
certain to arouse further animosity within the UN
toward the Chan regime.
To counte_ this adverse trend, the Chilean govern-
ment is sending good-will delegations to Africa and
the Middle Ea-it. The prospects of rallying substantial
support appear dim, however. If pressures against Chile
continue to exerted on the international level,
Pinochet's right-wing advisers may call on him to have
the .,ountry ?,,7i thdraw from the United Nations altogether.
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Venezuela: New AD Secretary-General
Former Interior Minister Luis Pinerua Ordaz took
a long step toward obtaining the governing Accion Demo-
cratica (AD) party's 1978 presidential nomination with
the party's recent selection of him as secretary-general.
In contrast to the Social Christian Party (COPEI), the
principal opposition party, AD now appears strengthened
and unified for the presidential election.
Following his selection by AD's 20th national con-
vention, Pinerua moved to unite the party by calling on
the convention to name his major opponent, Carlos
Canache Mata, to be executive political secretary of the
national executive committee--the party's top policy-
making body. In an address to the convention, President
Carlos Andres Perez called for party unity against the
opposition. By the end of the convention, the party
consensus appeared to be general satisfaction with its
present direction.
Pinerua's victory makes him the clear front-runner
for the presidential nomination, although he will face
some opposition within the party. As secretary-general
and with a cooperative new executive conunittee, he will
be in virtual control of the party machinery. Should
division within COPEI persist, he would likely also have
little difficulty keeping the presidency in AD's hands.
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Venezuela: Colombian Demarche for Gulf Condominium
Venezuela has shown cautious official interest
in a recent proposal by Colombian President Lopez
I lichelsen to close the Gulf of Venezuela to foreign
vessels. The two countries' dispute over marine and
submarine sovereignty in the gulf is unlikely to be
readily resolved, however.
In a speech to the Colombian senate, Lopez pro-
posed that Colombia and Venezuela form a condominium
over the gulf and jointly exploit its resources. He
also proposed that the gulf be declared a historic
bay and be closed to all ships except those of the two
countries.
The Venezuelan Government has shown some interest-
in the proposal for closing the gulf to foreign ves-
sels, although major political leaders have rejected
the proposal of a condominium and have urged the govern-
ment to reject it also. The government has reacted to
the generally negative press and public response by as-
suring that any agreement would be made in the open and
that negotiations on the proposal would be separated
from those on delimitation of sovereignty in the gulf.
The dispute over the gulf has been a significant
bilateral problem since it became a source of oil.
Both countries have complex historical and legal claims
at least to partial sovereignty, and it is unlikely that
either would agree to a joint condominium without first
defining national boundaries. Colombia has the most to
gain from any compromise and would look favorably on al-
most any agreement. Venezuela must be more cautious, as
an agreement would almost surely be criticized by the
opposition or, more important, by the military, as a
sell-,.jut.
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Although the Venezuelan Foreign Ministry has
cautiously encouraged the condominium idea, it has
made plain that any agreement to delimit the disputed
area must be concluded separately. Nevertheless,
Colombia's proposal to close the gulf and Venezuela's
responsiveness to the idea is a new development that
has changed the character and possibly the future of
the dispute.
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Panama: Treaty Stand Gets Approval
The government is continuing to garner endorse-
ments of its canal treaty negotiations posture. Fol-
lowing up on the session with student leaders on July
9, government spokesmen met with the members of the
National Assembly on July 18. After listening to
explanations of the government's objectives and strat-
egy by several officials involved in the negotiations,
the Assembly passed a resolution giving General Torrijos
an expression of confidence and wide latitude to explore
several options intended to further Panama's cause.
These options include: establishing diploma'-ic re-
lations with all nations, specifically the USSR and
China; joining the nonaligned movement at its meeting
next month in Lima; inscribing the canal issue on the
agenda of the UN General Assembly this fall; working to
secure commitments of support from all legislatures in
the hemisphere; exploring the possibility of convening
a conference of Latin American army chiefs to consider
the "colonialist" situation in Panama.
The statements by the officials, as well as the
Assembly resolution, reconfirmed the government's in-
tention to follow the path of negotiations. At the
same time, however, the declarations were obviously
intended to assure the public that Torrijos is zealous-
ly protecting Panama's basic interests and that he will
not surrender these to get a treaty.
The officials emphasized that Panama's fundamental
interests in a treaty lay in the areas of duration, ju-
risdiction, and the amount of land and water that Panama
would obtain at the outset of a new treaty. They insist-
ed that Panama must secure total control of the canal
before the end of the century, and that jurisdiction has
to be transferred to Panama within three years of the
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signing of a treaty. One member of the negotiating
team said that Panama will have to compromise by per-
mitting three US military bases to remain during the
time a new treaty remains in force. He said that the
main objective should be to reduce the present US mili-
tary presence, and that the slogan "Bases, No" being
used as a rallying cry by some student groups is not
realistic. Panamanian officials who deal with the
technical aspects of the canal issue maintained that
the US requires only 4 percent of the area of the
present Canal Zone to operate and defend the canal.
The officials claimed that Torrijos had ordered them
not to deal with compensation until the other, higher
priority issues, had been resolved.
The declaration by the Assembly, which is securely
under Torrijos' thumb, provides him with a highly visible
show of support. Torrijos will use it to cover his polit-
ical flanks; the declaration significantly noted the gov-
ernment's "obligations" to explore "peaceful" options,
reaffirmed faith in Torrijos' negotiating policy, and
called on local organizations to undertake any directed
activities. The Panamanian leader has no intention of
being forced into precipitate confrontation tactics and
will point to the Assembly's statement in warding off any
minority group clamoring for tactics which could lead to
uncontrolled violence.
Now that positions attributed to Panama and the US
have been put on the public record, it will be hard for
the Panamanians to compromise. At the same time, the
Panamanian negotiators, by stressing the complexity of
the negotiations and the continuing wide differences on
certain basic issues, appeared to be signaling to the
o?u lic that a new treaty is no;: likely to be achieved
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Ecuador: Coping With Civilians
The military government of President Rodriguez
has tempered its stand against the civilian opposi-
tion, although Minister of Government Guillermo Duran
continues to take a hard line.
Apparently recognizing that the harshness of its
reaction to criticism was unnecessarily reminiscent of
its early months in power in 1972, the government has
abruptly ended its attack on two important critics.
Columnist and former foreign minister Julio Prado
emerged from hiding last week, when an order for his
arrest was rescinded. Prado's column in the liberal
Quito daily El Tiempo has criticized both government
actions and personnel, and he has continued to write
from underground since becoming a fugitive in April.
Conservative Party national director Julio Cesar
Trujillo returned to Quito, also last week, from an
army base in the eastern jungle to which he had been
exiled in May. He insisted that his release did not
suggest that his opposition activities would diminish
in any way. This promise of continued opposition was
made all the more believable by its timing--following
by one day similar statements by leaders of the Radical
Liberal Party and the Christian Democratic Party.
Despite these apparent changes in the government's
attitude toward the opposition, Minister of Government
Duran used the occasion of a press conference on July
16 to rail against "traitorous conspiring" against the
military government on the part of civilians. Well
known for his short temper and lack of tact, Duran
warned the opposition not to interfere with the revolu-
tionary government's "principles of authentic democracy."
Predictably, Duran's statements outraged leaders of the
major political parties and all major newspapers, in-
cluding the conservative El Comercio of Quito.
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The government may be trying to keep the opposi-
tion off balance by offering the olive branch and the
billy club simultaneously. More likely it is making
a genuine effort to accommodate reasoned criticism,
but is having some difficulty guiding Duran down the
path of compromise. In any Event, growing numbers of
government leaders are realizing their need for respon-
sible civilians--to share both in the government and
in the blame for the economic problems that
in-
creasingly befalling the country.
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Trinidad-Tobago: What Makes Eric Travel?
Prime Minister Eric Williams' third major foreign
trip in the last nine months reflects his continuing
aspiration to play a significant role on the inter-
national stage. During June and July he visited Cuba,
the US, the Soviet Union, Romania, The Netherlands,
and Austria. His previous two ventures took him to
the Far East. Williams can now reflect on his meet-
ings with such diverse personages as President Ford,
Secretary Kissinger, Mao Tse-tung, Fidel Castro,
Aleksey Kosygin, Kurt Waldheim, and Nicolae Ceausescu.
Besides enhancing his own personal stature,
Williams' most recent -trip was motivated by his dual
desires to influence Caribbean Law of the Sea policy
and obtain development aid in order to diversify and
expand Trinidad's petroleum-dominated economy.
While in Cuba and the US, Williams attempted to
sell his idea of a special Law of the Sea arrangement
for the Caribbean that would afford equal rights and
access to all Caribbean states. He believes that the
alternative of a 200-mile exclusive economic zone would
primarily benefit mainland nations such as Venezuela
to the detriment of the smaller island states.
Williams'Law of the Sea policy coincides with h's
long-held goal of an integrated Caribbean region with
the island states serving as the inner core, thereby
allowing Trinidad with its relatively strong economic
position to play a dominant role. In recent months
Williams has viewed Venezuela's use of its oil revenues
in the Caribbean as a threat to his objectives. He has
gone so far as to accuse Venezuela of "neocolonialism."
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Williams, in his criticism o his mainland neighbor, is
serving as a surrogate for this country.
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Williams received only a promise to consider his
Law of the Sea policy during his visit to Cuba. This
limited response reflected Castro's wariness of the
Trinidad leader's mot.Lvations and his desire to avoid
damaging relations with Venezuela and other Caribbean
countries Williams has recently alienated.
Undaunted, Williams reemphasized his proposal to
Secretary Kissinger and UN Secretary Gcneral Waldheim.
He believes that the US is a potential supporter of his
position because of its interests in Puerto Rico and
the Virgin Islands and its desire for the free transit
of international waters.
During his travels to the Soviet Union and Europe,
Williams turned his attention to shoring up his own
domestic economy. Although Trinidad's oil exports have
provided substantial economic growth during the past
year, the prime minister wants to diversify export mar-
kets and obtain new sources of development aid. Histor-
ically, the US has been Trinidad's major trading partner
and source of technology. While Williams does not find
this distasteful, he sees long-term benefits in diversi-
fication.
His European travels appear to have reaped some
initial modest successes. In the Soviet Union he laid
the groundwork for expanding trade and signed a number
of technical agreements. The Romanians have promised
to establish a tractor assembly plant in Trinidad and,
as a result of his trip to The Netherlands, Williams
hopes to obtain a reduction-process steel plant from a
Dutch-German combine.
Williams' previous ventures to the Far East also
appear to be paying tangible dividends. Trinidad of-
ficials recently signed agreements to sell substantial
quantities of cocoa, coffee, and sugar to China, and
possible trade agreements are being studied apan
and Hong Kong.
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Mexico: Border Industries in Trouble
After achieving an impressive growth record in
its first decade, Mexico's border industry program
has been hit by sharply increased labor costs and the
US recession.
Border industry firms, mostly US subsidiaries,
produce various articles from US components--selling
them mainly to the United States, where they are sub-
ject to duties on only the value added. ' sharp down-
turn in export sales and the closure of n..:uerous plants
this year have set back border industry operations and
are rp.ising questions about the program's future. Ex-
ports to the United States (net of US-made components)
were only $125 million in the first four months of 1975;
they are unlikely to exceed much more than $300 million
for the whole year, compared with $464 million in 1974.
Between October 1974 and April 1975, 32 plants, in-
cluding two of the largest, ceased operations, and 60
plants markedly reduced their work force. As a result,
border industry employment declined from 70,000 to
45,000 and probably will slip to less than 40,000 by
the end of the year.
While the firms are being hurt by the US recession,
the most serious developments are rapidly rising wages
and other operating costs. Mexico boosted average wage
rates 22 percent in October 1974; wages are now 86 per-
cent above the January 1973 level. At an average of
about $1.20 per hour including fringe benefits, Mexican
wages are now two to five times rates in other Latin
American and Southeast Asian countries where US sub-
sidiaries operate under the same tariff provisions.
Several firms shifted operations to Haiti, El Salvador,
and other low-wage Latin American countries, which re-
cently have intensified efforts to attract this kind
of plant.
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Mexico City, which strongly backs the border
industry program, has taken steps to improve the pro-
fitability of the participating firms. It simplified
regulations in June and may give firms more leeway in
selling their products within Mexico. Requests that
border firms be eligible for tax rebates on exports
have been rejected for fear of US countervailing
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duties. Unless the government restricts growth of
wages and further simplifies its costly regulations,
border industry recovery will be slow.
US Imports
from Mexican Border Industry Firms
Million US $
1.200
1.000
01" I I I I I I
1969 70 71 72 73 74 75
Projected
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