2 JULY 1937, Page 18

Commonwealth and Foreign ANGLO-ARGENTINE RELATIONS

By WILBUR BURTON Buenos Ayres.

ECONOMICALLY, Argentina has long been virtually a British colony. The United Kingdom is both the best customer and the chief source of imports of the country ; 85 per cent. of the railways are in British hands and the British dominate in other public utilities ; in shipping, the United Kingdom is over three times ahead of its nearest competitor, Greece ; total British investments amount to about L450,000,000, which is approximately four times as large as American (that is, U.S.A.) investments ; and the British community numbers some 5o,000—the largest in the world not under the British flag—while there are but 3,000 Americans. In numbers, to be sure, British immigrants are few compared to those from Spain and Italy, but the difference is that the latter are for the most part in humble positions while the bulk of the former are highly placed in every line of agriculture and commerce from Tierra del Fuego in the south to Jujuy in the extreme north-west. So, too, of course, are the Americans, but the British outnumber them by about seventeen to one. British and Americans, moreover, rarely become completely assimilated as the Latins usually do ; they often become Argentine citizens, but they generally maintain close ties with their homelands. For example, British of the third or fourth generation speak English as fluently as they do Argentinian Spanish and regard themselves as Anglo-Argentine, whereas an Italian of the second generation knows little or none of the Italian language and a Spaniard of the second generation regards himself as wholly Argentinian Politically, there is nothing colonial about Argentina. As a matter of economic self interest under present conditions, the government is bound to maintain close and friendly relations with London—more so, I think, than with the United States—and to this extent it is justifiably viewed by Americans in Buenos Ayres as " pro-British." But in the main, it reflects an ever-growing nationalism that assumes an importance out of all proportion to the country's population and development. This in itself, however, tends to reinforce Anglo- Argentine friendship ; for it means opposition to a Pan- American league in which the United States would inevitably predominate. There is both rivalry with the United States for Latin American leadership and a distrust of " the Colossus of the North," although President Roosevelt's " good neigh- bor " policy has liquidated all of the virulent ill-will that only nine years ago caused Argentina to be the only Pan-American country not represented at the Pan-American Conciliation and Arbitration Conference in Washington. Great Britain, on the other hand, is not only the natural country to play off against the United States, but has also never been suspected of having any political designs in any part of Latin America since some unsuccessful efforts at conquest (including invasion of Buenos Ayres) more than a century ago. In recent years there has been but one minor rift in Anglo-Argentine relations, the dispute over possession of the Falkland Islands, which are economically unimportant, but which command the eastern approach to Cape Horn, and the. Straits of Magellan and so might be of the same strategic value in a future war that they were in the World War. Today, Britain has de facto possession of the islands while Argentine geographies show them as belonging to Argentina, and now and then a Buenos Ayres politician or newspaper makes some ado about th,. matter, but except for a perennial pro forma claim it is officially ignored.

For the most part, Argentina's relations with both Great Britain and the United States are determined by economic considerations. Britain's position within the country is due to an early start—made, before the United States was even able to consider investments abroad and before the Argen- tinians themselves were capable of any appreciable national development. Today there is no further room for investment in public utilities, and the country is now so prosperous that government loans are being floated internally. Nor is there any longer much opportunity for either British or American settlers unless they have considerable capital to invest, since the indigenous supply of recruits for well-paid positions is,

Buenos Ayres.

with few exceptions, equal to the demand, while in less skilled . lines the standard of living is below that to which Anglo- Saxons are accustomed. There is, however, much oppor- tunity for industrial investment, especially in co-operation with Argentine citizens—for nationalism is becoming as pronounced in commerce as in politics. The industrial investment field is open equally to British and Americans, but more British capital than American is now coming into the country. A tendency toward joint Anglo-American investment was exemplified recently by Imperial Chemicals and DuPont in establishing a rayon industry. Americans and British alike in Buenos Ayres view Argentina as sufficiently stable politically for safe investment. The Argentine Govern- ment was the only South American regime that did not default during the recent depression, although some provinces did. For purely economic reasons, the British railways have not paid any dividends on ordinary shares for six years, while even payment on debentures has been deferred. However, brighter days appear ahead. Argentine exports have been steadily mounting for the past two years, in large part due to unprecedented grain shipments to the United States because of two successive droughts there. During the first quarter of this year, the total value of Argentine exports_ was 1,074,559,000 pesos, which represented an increase of 107.7 per cent. over the same period of last year.

In trade, Great Britain is in a naturally much more favourable position than the United States because the conflict between American and Argentine agricultural interests mitigates against close economic relations. Thus, Argentina can look only to Britain as the chief customer for her principal products : meat and grain. The latest American-Argentine commercial treaty dates back to 1853, while the present Anglo-Argentine trade pact is that of November 1st, 1936, which establishes quotas of meat imports into the United Kingdom for three years. The treaty, however, is predicated on the fact that the Anglo- Argentine trade balance, including invisible items, is always unfavourable to the United Kingdom. The Argentine trade balance with the United States has also been unfavourable to the latter since 1935, but previously it was generally favour- able. In absence of any reciprocal trade agreement, and also because the United States has not ratified a sanitary convention for modification of the present complete ban on Argentine frozen meat to permit imports from regions of the country where foot-and-mouth disease does not exist, there is a sur- charge of approximately 20 per cent. on about half of the American imports into Argentina—a levy from which all British and German imports are free, The complete ban on frozen meats is especially resented in Argentina both because of the undeserved stigma and because the admitted existence of foot-and-mouth disease in some parts of the country is being used as an unfair excuse by American live- stock interests to prevent even the insignificant competition possible under the tariff laws of the United States.

Despite the handicap suffered by V.S. imports into Argen- tina, they have been increasing this year until they are now within 2 per cent. of British imports. This is due both to Argentine preference for American motor-cars and a decline in British textile imports through constantly increasing textile manufacture in Buenos Ayres. At the same time there are grow- ing Argentine exports to U.S. in lines where American produc- tion is insignificant or insufficient, such as linseed, hides and skins, and wool.

But since the chief products of Argentina are grain and meat, for which there is normally no appreciable North American demand, she looks to England rather than U.S, as her best commercial " neighbOr " in the long run. There is fear, however, that the policy of Imperial Preference may soon or late mar relations, since the British Dominions may increasingly insist on supplying meat and grain to the Motherland. The present Anglo-Argentine trade pact put a duty for the first time on Argentine exports to the United Kingdom, and there is apprehension that this may be an omen of worse to come.