DOLLARS, POUNDS AND MEAT
By GEORGE BRINSMEAD
DURING the war Colonel Peron (as he then was) was con- fident, as were most South American military officers, that the German Army would triumph. At the end of the war he was convinced that there was no future for sterling—in fact, no future for Britain. He believed that the development of Argentine factories, hydro-electric power and transport would rapidly convert his country into an economically-independent industrial State, con- suming most of its own raw materials and foodstuffs. It was obviously inconsistent with Argentina's new position and prestige that the railways and other public utilities should remain in British hands (incidentally, those investments were of diminishing value to ourselves, and their " export " to Argentina was effected at a con- venient moment and a very reasonable price). President Peron also recognised that it was undignified that islands off the Argentine coast should still be held by Britain ; perhaps we would barter them for a year or two's food. While the rulers of Argentina were in this mood, their economic expert, Sr. Miguel Miranda, imprudently allowed his dollars (acquired in quite abnormal circumstances during the war) to be squandered ; soon the only currency reserves remain- ing as backing for his note circulation and for financing his foreign trade were in that despised denomination, sterling. To obtain equip- ment for the Peronistas' Five-Year Plan of industrialisation, Sr. Miranda needed after all to export meat (it was no longer merely a favour granted to half-starving foreigners) ; but the Argentine producers of meat had been discouraged, and, to almost everyone's astonishment, supplies were found to be inadequate.
Meanwhile, British economic recovery (with U.S. assistance) was proceeding ; Britain was seen to have no intention whatever of barter- ing the Falklands ; the railways had been acquired by the State, but rising costs and labour disputes had somewhat dimmed the glamour of this, as of other economic achievements ; and so Sr. Miranda went to spend a long holiday beside the beautiful beaches of the much-maligned neighbouring republic, Uruguay. The Andes Agree- ment of February, 1948, had fizzled out. The U.S.A., despite her commercial rivalry with Britain, had expended only the minimum of Marshall Aid dollars in Argentina. And Argentina herself was, in one respect, back where she began more than 140 years ago—joined necessarily with Great Britain in close economic collaboration. The collaboration, however, will henceforth be different in detail because Argentine requirements have changed. We are dealing now with an intensely nationalist and increasingly industrialised republic. There may be setbacks in Argentina's industrial progress ; but, ulti- mately, nothing will prevent that industrialisation. And so, if we want to continue being supplied with Argentine meat, we must offer encouragement and some measure of security to the cattle-breeders, whose job is a long-term job. In present-day circumstances that fact—pace Washington—presupposes long-term agreements.
The agreement which has so long been on the point of signature by the two countries will reaffirm the fact—which had been denied by President Peron, and swept aside by some of our own jingoistic -publicists—that the economies of Britain and Argentina are comple- mentary to one another and are likely to remain ,so. Argentine " economic independence " still resembles one of those hallucinations that the traveller experiences so frequently in the pampa, where a clump of bluey-green eucalyptus trees on the horizon seems to be an enchanted castle, apparently within easy reach of an optimistic horseman. As for ourselves, though we might be persuaded by the eloquence of hard-pressed British statesmen to become a nation of vegetarians, our industrialists and merchants would still hanker after the vast Argentine market, as they have done since Napoleonic times. The manufactures which Argentina requires of us have changed in character, and future statistics will probably continue to show a decline in shipments of " consumer " goods, in relation to exports of machinery, steel and fuel ; but that merely implies an adjustment ill detail. We can provide machinery, steel and fuel just as efficiently as we can manufacture textiles and whisky. And the North Americans may be correct in their belief that local industrialisation will raise the standard of living in what are now undeveloped areas and stimulate the importing of foreign " con- sumer " goods.
Competition between Britain and the U.S.A. for the Argentine market has been intense since the last decade of the nineteenth century. This Anglo-Argentine-U.S. triangle has been complicated in recent years by political considerations and by the rivalry between sterling and the dollar. Washington's aggressive political attitude towards successive Governments at Buenos Aires during and im- mediately after the war offended even those Argentines who dis- approved of their own rulers. Although the British Ambassador was withdrawn from Buenos Aires during the wa; in conformity. with our Ally's policy, we still continued to receive Argentine meat on credit, and it was no secret that the junior British diplomats who remained at their post and British business-men and the local British communities continued to be on friendly terms with the Argentine people. This sympathy was resented in Washington and in U.S. business circles. More recently President Peron's dollar shortage—aggravated by the " inconvertibility " of sterling—has facilitated the drawing up of the new agreement, which will benefit British exporters at the expense of their North American rivals. However, since the U.S.A. is actively interested in British economic recovery, it is difficult for Washington to do more than formally " disapprove " of a long-term Anglo-Argentine pact that is designed to safeguard our supplies of food and to increase our exports.
While the latest Anglo-Argentine negotiations were in progress, it was announced from Washington that the U.S.A. and Argentina intended to set up a joint commission to study means of reviving trade between those two countries. The problem is to discover some way of augmenting U.S. imports from Argentina, because although Argentina requires industrial plant, chemicals and petroleum, the U.S.A. has no need of meat, hides and cereals. At present it would be infra dig. for General Peron to demand or accept a loan from the Colossus of the North, so the only immediate method of relieving' the President's acute dollar shortage would appear to be by increasing purchases under the Marshall Plan. At a Press conference on May loth the Argentine Minister of Finance announced that his country's net arrears of trade debts to the U.S.A. amounted to $143,000,000. To this purely commercial in- debtedness would have to be added a large unspecified " invisible " debt. The decline in trade itself is spectacular. U.S. exports to Argentina fell from $148,200,000 in January-March, 1948, to $37,3oo,000 in January-March, 1949. Argentine exports to U.S.A. fell from $69Aoo,00o to $26,283,000 in the same period. The explanation of that unbalance is, of course, that the Argentine_ and U.S. economies are not by nature complementary.
Fortunately, in spite of conflicting interests and some mutual suspicion, the " general-" policies of Britain and the. U.S.A. towards Argentina have always coincided to a remarkable extent.- Since the emancipation from Spain, neither country has ever had territorial ambitions in the River Plate area, nor used force or threats -of force to attain economic advantage.-- At the beginning of the nineteenth century, thanks to the British Navy and our advanced_ industrial development, we " got in" before the Americans.; but George Canning never sought a monopoly for British traders. The River Plate was to be open to the commerce of all nations, and was to be protected by our warships and John Quincy Adams's brilliant .diplomatic formula, the Monroe Doctrine, against aggression from . any European Power. The Hispanic New World was to be helped in the exploitation of its resources, and thereby British and North American interests would benefit. With-the development of modern long-range warfare, however, Washington has grown very conscious of the strategic importance of Argentina, and very anxious lest that republic should aspire to become the leader of a southern bloc of States rivalling U.S.-sponsored Pan-Americanism. As we do not live upon the American continent, we are not greatly alarmed by supposed Argentine ambitions ; but, with our experienced eye, we have observed that Washington's hastily-conceived efforts to influence the Argentine people in their choice of Governments have had the contrary effect to that which was intended. Indeed, they
have served to foster local nationalism and to encourage " anti- Yanqui " sentiments. While the North Americans have busied themselves in this fashion we have kept ourselves to ourselves, and our communities in Argentina, paradoxically, have earned the respect of the " natives " by diarc of not mixing with them and by remaining .aloof from their internal politics.
But all this does not help President Peron very much. For his part, he must be constantly bewildered by the vagaries of U.S. official behaviour. In the past four years he has been alternately insulted and cajoled by U.S. Ambassadors and the State Department. The North Americans have refused to purchase any substantial quantities of his foodstuffs for the Marshall Aid countries, but complain when he strikes a five-year bargain with Britain for the disposal of those products. And although the present U.S. Am- bassador at Buenos Aires, Mr. James Bruce, is on the friendliest terms with the President, the new Assistant Secretary of State for American Republic Affairs at Washington is heard exclaiming: "You can't condone the horrible conditions under some of the military regimes. But you can't withdraw your Ambassador, either." I am unable at the moment to recall a proverb in Spanish cor- responding to our " You can't eat your cake and have it," but General Peron doubtless knows how to express those sentiments when he discusses U.S.-Argentine relations with Ambassador Bruce. Nevertheless, the gallant General would like to have some dollars.
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