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4662714
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Argentina - Economic, Social
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4662714
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title
Argentina - Economic, Social
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This file contains Deltec International.
citationUrl
collections
National Security Council Latin American Affairs Staff Files (Ford Administration)
Latin American Affairs Staff Country Files
subjects
India
Brazil
Argentina
Aeronautics, Commercial
Nuclear energy
Corrupt practices
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4662714
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1975-09-30
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9
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1975
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1974-07-01
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7
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1974
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The original documents are located in Box 1, folder "Argentina - Economic, Social" of the
National Security Adviser's NSC Latin American Staff Files, 1974-77 at the Gerald R. Ford
Presidential Library.
Copyright Notice
The copyright law of the United States (Title 17, United States Code) governs the making of
photocopies or other reproductions of copyrighted material. Gerald R. Ford donated to the United
States of America his copyrights in all of his unpublished writings in National Archives collections.
Works prepared by U.S. Government employees as part of their official duties are in the public
domain. The copyrights to materials written by other individuals or organizations are presumed to
remain with them. If you think any of the information displayed in the PDF is subject to a valid
copyright claim, please contact the Gerald R. Ford Presidential Library.
Digitized from Box 1 of the National Security Adviser's NSC Latin American Staff Files, 1974-77 at the Gerald R. Ford Presidential Library
2899
LOW
THE WHITE HOUSE
WASHINGTON
July 19, 1974
Dear Fred:
Thank you for the report of your trip to Argentina
to present United States' condolences upon the
death of President Peron. The account of your
activities and conversations you had there was
of great interest.
I deeply appreciate your willingness to under-
take this mission on such short notice. It is
clear that you carried out your functions in a
manner reflecting credit on yourself and on the
United States.
Sincerely,
The
Honorable Frederick Dent
Secretary of Commerce
Washington, D. C.
FORD
R
GERALD
LINHARY
2a
NATIONAL ARCHIVES AND RECORDS ADMINISTRATION
Presidential Libraries Withdrawal Sheet
WITHDRAWAL ID 016165
REASON FOR WITHDRAWAL
National security restriction
TYPE OF MATERIAL
Memorandum
CREATOR'S NAME
Steve Low
RECEIVER'S NAME
Jan Lodal, David D. Elliott
TITLE
India Nuclear Agreement with Argentina
and Brazil
CREATION DATE
08/06/1974
VOLUME
1 page
COLLECTION/SERIES/FOLDER ID
034200004
COLLECTION TITLE
NATIONAL SECURITY ADVISER. NSC LATIN
AMERICAN AFFAIRS STAFF: FILES
BOX NUMBER
1
FOLDER TITLE
Argentina - Economic, Social
DATE WITHDRAWN
07/03/2002
WITHDRAWING ARCHIVIST
GG
sanitized 4/11/05
a
NATIONAL SECURITY COUNCIL
August 6, 1974
MEMO FOR: JAN LODAL
DAVID D. ELLIOTT
SUBJ:
Indian Nuclear Agreement with
Argentina and Brazil
The Brazilian agreement provides for an exchange
of scientific information on peaceful uses, scholar-
ships for scientists, meetings between energy com-
missions, and release of research material and
equipment.
Steve ea Low
Attachment:
FORD & LIBRARY OFRATED
SECRET
DECLASSIFIED . E.O. 12958 Sec. 10
With PORTIONS EXEMPTED
E.O. 12958 Sec. 1.5 (c)
MR05-04, #1, LIAlts 4/11/05
die NARA, Date 4/26/04
an
NATIONAL ARCHIVES AND RECORDS ADMINISTRATION
Presidential Libraries Withdrawal Sheet
WITHDRAWAL ID 016166
REASON FOR WITHDRAWAL
....
National security restriction
TYPE OF MATERIAL
Memorandum
RECEIVER'S TITLE
Steve Low
TITLE
NSC
DESCRIPTION
Transmittal memo
CREATION DATE
08/01/1974
VOLUME
1 page
COLLECTION/SERIES/FOLDER ID
034200004
COLLECTION TITLE
NATIONAL SECURITY ADVISER. NSC LATIN
AMERICAN AFFAIRS STAFF: FILES
BOX NUMBER
1
FOLDER TITLE
Argentina - Economic, Social
DATE WITHDRAWN
07/03/2002
WITHDRAWING ARCHIVIST
GG
2c
MEMORANDUM FOR THE RECORD
Recd aug 1974
SUBJECT: ARGENTINA/BRAZIL: NUCLEAR COOPERATION AGREEMENTS
WITH INDIA
The Following is a broad comparison of the nuclear cooperati
agreements signed by India with Brazil and Argentina. We
cannot make a thorough comparison since the complete text of
the agreement with Brazil is not yet available.*
1. India / Argentina Nuclear Cooperation Agreement
The "official English text." of the Nuclear Cooperation
Agreement signed by India and Argentina in June, 1974, is
contained in a cable from the Embassy, Buenos Aires (72216,
dated- 28 June 1974). The agreement is entitled: "Agreement
between the Government of the Argentine Republic and the
Government of the Republic of India on Cooperation Regarding
the Utilization of Atomic Energy for Peaceful Purposes."
The agreement is very general, and the phrase, "peaceful
uses of atomic encrgy," is referred to frequently. There are
no references to intornational safeguards or inspections.
2. India / Brazil Nuclear Cooperation Agreement
During the visit to Brazil of Indian Prime Minister,
Indira Ghandi in late 1968, Brazil and India signed an
agreement on the peaceful use of atomic energy. The
agreement was to be in effect for five years, with an option
for-extending it. Based on an 0 Globo article of 19 December
1968, which is confirmed by special materials, the agreement
contains the following provisions:
a. Exchange of scientific information with respect to
the peaceful use of Atomic energy, except information
of a secret nature or which one of the parties does
not have the liberty to reveal bccause it was obtained
or resulted from cooperation with a third party;
b. The two governments will promote a system of
scholarships for scientists and students for a period
DECLASSIFIED
E.O. 12958 Sec. 3.6
MR05-05 #2 CIA etr 4/4/05
doe 6/29/05
to be determined later;
c. Whenever the two governments think necessary, there
will be meetings between the two respective atomic
energy commissions for the discussion and coordination
of projects, including questions of industrial
cooperation or any other problems that may arise in
implementing the agreement;
FORD
SECRET
s LIBRARY QERALD
d. The two countries will arrange the release or
sale of material needed in their programs covering
research on peaceful use of the atom. The release
of material and equipment needed in research
will be handled by joint agreement between the
National Nuclear Energy Commission (CNEN) and
the Indian government Atomic Energy Commission.
Based on the above noted sources, it appears that
the India/Brazil document is very similar to the India/
Argentina agreement. Another indication of this is a
press item in 0 Globo of 1 June 1974, quoting Indian
Minister of State for Foreign Affairs, Surendra Pal
Singh, to the effect that India's agreement with
Argentina forsees only the exchange of information similar
to the agreement signed with Brazil more than six years
ago. It is assumed, therefore, that the Brazilian agreement
like that of Argentina, is void of any references to
international safeguards or inspections.
*
A request has been made for a copy of each of the
official documents to the Atomic Energy Commission
representative to the International Atomic Energy
Association in Vienna through the A.E.C.
FORD & LIBRARY GERALD
SECRET
S
3a
NATIONAL SECURITY COUNCIL
WASHINGTON, D.C. 20506
April 14, 1975
MEMORANDUM FOR:
Mr. William D. Rogers
Assistant Secretary, ARA
Department of State
SUBJECT:
Deltec and Argentina
Attached are some notes made following a meeting with Deltec officers
and their lawyer. The meeting was held as a result of a request from
the Vice President's office.
As you note, the point of the meeting was the request from Deltec that
we drop hints to the Argentines that if their problem is not resolved,
we may find ourselves in a Gonzalez Amendment and Trade Act
exclusion situation. I'm not sure what the validity of the argument
that the Gonzalez be invoked may be, though I suspect there may be
some.
You may want to consider whether to make mention of this matter
during the forthcoming visit.
Attachment: Memcon
Stephen Stare Low
& FORD LIBRARY
S
3b
2373
NATIONAL SECURITY COUNCIL
April 15, 1975
MEMO FOR:
JEANNE W. DAVIS
FROM:
STEPHEN LOW
SUBJECT:
Deltec Intl. and
Argentina
The attached memo for Jon Howe from you
is self-explanatory.
GERALD
" LIBRARY FORD
CONFIDENTIOL
2373
Low
MEMORANDUM
7Y1
NATIONAL SECURITY COUNCIL
3C
April 15, 1975
MEMORANDUM FOR:
JON HOWE
FROM:
JEANNE W. DAVIS
SUBJECT:
Deltec International and
Argentina
Attached for your information is a copy of the Memorandum
for the Files done by NSC Staff Member for Latin America,
Stephen Low on his meeting with the president and officers of
Deltec International. Attached also is an excerpt from a
State Department memo containing background information on
Deltec's problems in Argentina.
individuals
E.O. 12058, SEC. as
HSC MEMO, 11/04/08, STATE DEPT. BUIDELINES
BY GG
# NARA, DATE 7/02/2002
GERALD
R FORD LIBRARY
CONF IDENTIAL
MEMORANDUM
NATIONAL SECURITY COUNCIL
April 10, 1975
MEMORANDUM FOR THE FILES
Subject:
Deltec International and Argentina
Date:
April 10, 1975 (11:00 a.m. - 12)
Place:
OEOB
Present:
Clarence Dauphinot, Oakley Brookes, Max Stolper,
Stephen Low and Mary Brownell
Following a call from a member of the Deltec Board, Gus Levy, to
Vice President Rockefeller, the Vice President's office asked the
president of Deltec International, Clarence Dauphinot, to see me in
connection with the problems which his company has encountered in
Argentina.
Mr. Dauphinot came in with Mr. Brookes and Mr. Stolper (Berliner,
Maloney, Gimer and Muir). The conversation was a lengthy one.
The following are among the points that were made which add to those
already on record as a result of previous Deltec representations with
the Embassy in Buenos Aires and the State Department.
-- Deltec has already put its case before State Department
officials at all levels. It is in close communication with Ambassador
Hill in Buenos Aires and a number of Senators and Representatives
of the Congress hav e been informed. However, it has not heretofore
come to the White House to ask Executive branch assistance. Before
becoming Vice President, Mr. Rockefeller had been helpful and had
given good advice.
-- The State Department has not been uncooperative and
Ambassador Hill has seen both the Minister of Justice and Foreign
Minister on this issue. Deltec felt that the atmosphere was now
more conducive towards a settlement. Further official expressions
of our desire to see a resolution of the problem could therefore be
particularly helpful at this stage.
-- Deltec's lawyers are of the view that the Hickenlooper
and Gonzalez amendments (which prohibit U.S. support for bilateral
THIOL
CONFIDENTIAL
E.O.
NSC MEMO, 11/24/00, STATE DEPE. GUIDELINES
X GERALD LIBRARY ? FORD
BY Gh
NARA, DATE 7/2/2002
and international financial institutions' assistance to nations which
have failed to compensate after nationalization or other seizure)
could be invoked in this case as .could the Trade Act's provision
limiting access to preferences in the same circumstances. Deltec
does not seek a confrontation with Argentina and does not at this
stage intend to request that Treasury apply this legislation, nor
would it consider at the moment action against Argentine assets such
as shipping. However, Mr. Dauphinot felt that expressions by U.S.
representations in the IFI's as well as in Argentina, indicating our
concern that such legislation may eventually be invoked, would
provide a useful impetus towards solution.
-- In Deltec's view, the blatant corruption and extortion
which had been practiced against them will continue. They maintain
that "everyone" in Argentina is on the take. Deltec would not be a
party to this and had refused several offers to fix everything for
substantial prepayments. Payments as commissions for services
rendered were something else. They would be quite prepared to pay
what was due in such a case.
-- Their greatest concern was the terrorist movement which
they felt had the potential of thwarting any solution which was a
public act, as they indicated had been the case in the past when judges
had reversed themselves as a result of threats to their lives.
-- The group also mentioned that the Argentine Government
was studying the possibility of requesting extradition against the
Americans for fraudulent bankruptcy, which is an extraditable crime
under our treaty with the Argentines.
I questioned whether invocation of the restrictive amendments could
really help, and they recognized this. I also noted the great
sensitivity at the present by local governments to espousal by the
U.S. of claims by its companies, particularly in view of the current
Latin American attention focussed on the subjects of "economic
coercion" and standards of conduct for the multinationals. I promised
to transmit their views to the Vice President as well as to the State
Department, and expressed my hope that the current climate might be
more conducive to finding a settlement.
se
Stephen Low
CONFIDENTIAL
GERALD A FORD LIBRARY
3e
Excerpts from a memo to the Secretary from L - - Carlyle E. Maw on:
"Deltec Investments in Argentina"
dated June 25, 1974
Deltec International is a company nominally incorporated in the United
Kingdom. It operates from the Bahamas, through various subsidiaries,
a variety of banking, financial and food services in the United States and
a number of Latin American countries, including Argentina. A majority
of the directors and officers of Deltec International are Ame rican
citizens, and it appears that a substantial majority of the shares is
owned directly or indirectly by American citizens.
The major Deltec concern in Argentina, Swift de la Plata (meat packing),
has been involved for several years in complex bankruptcy litigation
in Argentina. An Argentine court, ultimately upheld by the Argentine
Supreme Court in September 1973, on the basis of alleged irregularities
in transactions between Deltec subsidiaries, held all Deltec's Argentine
subsidiaries jointly and severally liable for the obligations of Swift.
Some assets owned by unrelated Deltec enterprises (investment
banking, sugar refining) have been attached in order to satisfy Swift's
debts. We do not have hard figures. The alleged irregularities on the
part of Swift and other Deltec subsidiaries in Argentina have now also
become the basis for criminal actions against a number of Deltec
officers, several of which are U.S. citizens and / or reside in the
United States. None of the criminal defendants have been arrested,
although the Argentine Government has formally requested the
extradition of a Deltec officer from Spain.
We are, unfortunately, not in a position on the basis of the information
we presently have to determine with any certainty whether Deltec has
engaged in any of the alleged irregular practices. Likewise, we are
unsure of the extent of political bias or lack of due process afforded
Deltec in the court proceedings. Deltec is challenging the bankruptcy
decision, insofar as it affects companies other than Swift, in the
Argentine courts, and will resist as well the criminal actions.
DECLARBIFIED
FORD
E.O. 12958, SEC. 8.5
a
NSC MEMO, 11/24/98, STATE DEPT. GUIDELINES
BY
, NARA, DATE 7/2/2002
CONFIDENTIAL
GERALD
LIBRARY
4a
FOR OFFICIAL USE ONLY
CIVIL AERONAUTICS BOARD
WASHINGTON, D.C. 20428
AMERICAN REVOLUTION WENTENNING
April 28, 1975
stary with IN
1776-1976
REPLY REFER TO: B-1-59a
The President
The White House
Washington, D.C. 20500
Dear Mr. President:
Transmitted for your review is a copy of the Board's proposed
order concerning the disapproval of a schedule proposed by
Aerolineas Argentinas (Docket 24248). This order is submitted
pursuant to section 213.3(d) of the Board's Economic Regulations
(14 CFR 213.3(d)).
The order disapproves a schedule proposed by Aerolineas
Argentinas which would increase the carrier's service between
Lima and Los Angeles. As the Government of Peru continues to
restrict the U.S. flag carrier's operations to Peru and beyond
to third countries, the Board believes it would be inappropriate
to permit a third country carrier to take advantage of that
situation by improving its schedules between Lima and the
United States at the present time. The order will remain in
effect until further order of the Board.
Under section 213.3(d) of the Board's Economic Regulations,
the Board's order is final unless the President staysor dis-
approves the order not later than ten days following its
submission by the Board. No action is necessary if you do not
wish to stay or disapprove this order.
Respectfully yours,
/s/ John E. Robson
Chairman
Enclosure
FORD
R
BERALD
LIBRARY
FOR OFFICIAL USE ONLY
FOR OFFICIAL USE ONLY
his
UNITED STATES OF AMERICA
CIVIL AERONAUTICS BOARD
WASHINGTON, D.C.
TAHT BI TI
bettleng 9vsd Adopted by the Civil Aeronautics Board view arT od
at its office in Washington, D.C. B bbs 03
11 bas on the 25th day of April, 1975 I9gnA
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In the matter of the
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Docket 24248
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AEROLINEAS ARGENTINAS
:
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9dj to TOBIO rediced Itimu nt alamys Ilsda TODRO aidT off
brrs ;bIsod
NOTIFICATION AND ORDER DISAPPROVING SCHEDULES
birs secutioneA no DEVISE 9d Ilede .2
.0.0 ,notgnideaW nt 10
Aerolineas Argentinas is the holder of a foreign air carrier permit
issued pursuant to Order 73-5-47 authorizing it to perform foreign air
transportation with respect to persons, property and mail, over three
routes between a point or points in Argentina, via specified intermediate
points, to New York, Miami and Los Angeles, There exists no formal Air
Transport Services Agreement Between the Government of the United States
and the Government of Argentina. The rights exchanged are based primarily
on comity and reciprocity.
Order 72-2-88 requires Aerolineas to file with the Civil Aeronautics
Board copies of any and all proposed schedules of service between Argentina
and the United States at least 30 days prior to the proposed effective
date of such schedules. On April 9, 1975 Aerolineas requested a waiver of
the 30-day filing period in order to add a stop in Lima, Peru on an existing
Buenos Aires-Bogota-Mexico City-Los Angeles and return flight (372/3). Insofar
as the Government of Peru continues to restrict the U.S. -flag carrier's operations
to Peru and beyond to third countries, the Board finds it would be inappro-
priate to permit a third-country carrier to take advantage of that situation
by improving its schedules between Lima and the United States at the present
time. Accordingly, it is concluded that operation of the modified flight
proposed by Aerolineas would adversely affect the public interest.
,8S LtugA по bettledue SSW
GRO3
FORD
s
?
DEBITO
FOR OFFICIAL USE ONLY,
GERALD
LIBRARY
YJNO 320 JAIOIRA
ACIREMA TO SETATE GETIMU
GRADE 201TUAMOREA 2
.0.0 ,иотэитнели
ACCORDINGLY, IT IS ORDERED THAT:
1. The waiver of the 30-day filing period, which would have permitted
Aerolineas to add a stop in Lima, Peru on flight 372/3 (Buenos Aires-Bogota-
Mexico City-Los Angeles and return) effective April 10, 1975, be, and it
hereby is, denied;
2. The schedule filed April 9, 1975 which contemplates the addition
of a stop in Lima on flight 372/3 (Buenos Aires-Bogota-Mexico City-Los
Angeles and return) be, and it hereby is, disapproved and shall not be
inaugurated;
9dd to T9J1sm nI
to
3. This BASAS Order shall be submitted to the President and shall become
effective on
VECEMLINVE
4. This Order shall remain in effect until further order of the
Board; and
СИА MONTADITION
5. This Order shall be served on Aerolineas Argentinas and the
Ambassador of Argentina in Washington, D.C.
threet TIS B to x9blod 9dd al
This Order will be published in the Federal Register. 03 Insuering
beneet
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evidence becogorq srid 03 voliq eysb 08 Jassi Js REFERE betteu add bris
(SEAL) evisw S becauper ares il ItxqA no .ssiubsdos dous to 938b
goidelxs ns по ured ,smil of qoie B bbs 03 TOBRO ni botteq gallit Veb-08 9ds
veloanI (E\STE) Idglit number bris asfegnA sol-vill 800908
anoissago edd 03 sendence used to 9dd as
-organi ed bluow 11 abnit breod 9d3 buids 03 broyed has 0299 03
notisuite 33d3 10 egainavba skint 03 8 JIMISQ 03 adaing
inessiq 38 216368 bettau 9dj bre smtl assweed estubados ast andvorgm) vd
dright bettibom order to notistego tad1 at 31 Temis
atiduq 911 sootts vissuevbs bloow assationsA vd beeoqozq
1/ This order was submitted to the President on April 28, 1975.
FORD
TRANDIS
s
DEBVID
YJNO 32U JAIORO Я07
GERALD
LIBRAY
FOR OFFICIAL USE ONLY
CIVIL AERONAUTICS BOARD
WASHINGTON, D.C. 20428
AAERICAN REVOLUTION
1776-1976
April 28, 1975
IN REPLY REFER TO: B-1-59a
Mr. David M. Bray
Deputy Associate Director for
Economics and General Government
Office of Management and Budget
Washington, D.C. 20505
Dear Mr. Bray:
There is enclosed a letter of transmittal to the President
together with the Board's proposed order in the matter of dis-
approval of a schedule proposed by Aerolineas Argentinas.
Additional copies of the letter and order are enclosed for your
convenience. Except as noted below, no distribution of copies
of these documents has been made by the Board. In connection
with any distribution which the Office of Management and Budget
may find necessary or desirable, it is suggested that the
recipient's attention be invited to the fact that until action
is taken by the President, the document is confidential in
nature and should be treated accordingly.
Sincerely,
/s/ John E. Robson
Chairman
Enclosures
cc: Honorable Robert H. Binder, Department of Transportation
Mr. Michael H. Styles, Department of State
Mr. John H. Niehuss, The White House
Mr. Robert D. Linder, The White House
Ms. Barbara Bowie, National Security Council
Mr. George Eads, Council on Wage and Price Stability
Mr. Dudley Chapman, Office of Counsel to the President
Mr. Peter Klarfeld, Department of Justice
FORD LIBRARY & OERALD
FOR OFFICIAL USE ONLY
or
STATE
Department of State
AMERICA UNITED
TELEGRAM
STATES
OF
LIMITED OFFICIAL USE
PAGE 01 STATE 109719
46
fr-Arg-eem. 9163
ORIGIN EB-07
INFO OCT-01 ARA-06 ISO-00 L-02 CAB-02 CIAE-00 COME-00
DODE-00 DOTE-00 INR=07 NSAE-00 FAA-00 SSO-00 NSCE-00
SS-15 NSC-05 SP-02 PRS-01 USIE-00 PA-01 INRE-00 H-02
/051 R
DRAFTED BY EB/OA:MHSTYLES:VLV
APPROVED BY EB/OA:MHSTYLES
ARA/APU - MR. SMITH
098629
0 111807Z MAY 75
FM SECSTATE WASHDC
TO AMEMBASSY BUENOS AIRES IMMEDIATE
LIMITED OFFICIAL USE STATE 109719
E.O. 11652: N/A
TAGS: EAIR, AR
SUBJECT: CIVAIR - US/GOA TALKS
REF: B.A. 3181, STATE 100767
1. PRESIDENT ON MAY 7 SENT FOLLOWING LETTER TO CHAIRMAN
CAB:
QUOTE. I HAVE REVIEWED PURSUANT TO SECTION 801(A) OF THE
FEDERAL AVIATION ACT AND SECTION 213.3(D) OF THE
BOARD'S ECONOMIC REGULATIONS, 14CFR SECTION 213.3(D), THE
BOARD'S PROPOSED ORDER IN DOCKET 24248 DISAPPROVING THE
MODIFIED SCHEDULE FILED BY AEROLINEAS ARGENTINAS ON
APRIL 9, 1975. THE PROPOSED MODIFICATION WOULD ADD A STOP
IN LIMA, PERU, ON AN EXISTING BUENOS AIRES-BOGOTA-MEXICO
CITY-LOS ANGELES AND RETURN FLIGHT.
FORD
?
GERALD
LIBRARY
LIMITED OFFICIAL USE
or
STATE
UNITED
Department of State
TELEGRAM
STATES OF
LIMITED OFFICIAL USE
PAGE 02 STATE 109719
I AM STAYING THE ORDER FOR REASONS OF OUR FOREIGN POLICY
WITH RESPECT TO THE GOVERNMENTS INVOLVED. WHILE I AM
SYMPATHETIC WITH THE ATTEMPT TO PREVENT FOREIGN AIRLINES
FROM TAKING ADVANTAGE OF RESTRICTIONS WHICH THE GOVERNMENT
OF PERU HAS IMPOSED ON UNITED STATES FLAG OPERATIONS, SUCH
ACTION SHOULD BE DELAYED PENDING UPCOMING TALKS WITH THE
GOVERNMENT OF ARGENTINA. UNQUOTE.
EMBASSY SHOULD DELIVER FOLLOWING NOTE TO GOA ASAP:
QUOTE. EMBASSY REFERS TO NOTE 221 OF JANUARY 31 CONCERN-
ING COMMERCIAL AIR TRANSPORT RELATIONS BETWEEN THE UNITED
STATES AND ARGENTINA AND TO INFORMAL DISCUSSIONS ON THIS
MATTER WHICH HAVE TAKEN PLACE IN RECENT MONTHS BETWEEN
REPRESENTATIVES OF THE MINISTRY AND THIS EMBASSY.
ALTHOUGH THE UNITED STATES GOVERNMENT CONTINUES TO HAVE
UNFULFILLED RIGHTS STEMMING FROM THE MEMORANDUM OF
UNDERSTANDING OF DECEMBER 1972, WHICH UNDER ITS OWN
TERMS WOULD HAVE NOW EXPIRED, IT IS WILLING TO COUNTENANCE
CONTINUATION OF THE STATUS QUO FOR THE TIME BEING. HOW-
EVER IN VIEW OF THE CLARIFICATION WHICH HAS RESULTED FROM
THE RECENT DISCUSSIONS AND IN LIGHT OF THE INTEREST IN
EARLY CONSULTATIONS RECENTLY EXPRESSED BY FONMIN VIGNES TO
SECRETARY OF STATE KISSINGER, THE USG IS PREPARED TO ACCEPT
THE ARGENTINE GOVERNMENT'S SUGGESTION THAT FORMAL CON-
SULTATIONS BE HELD. THE GOVERNMENT OF THE UNITED STATES
SUGGESTS THAT THESE CONSULTATIONS BE HELD IN WASHINGTON
BEGINNING JUNE 16.
IT IS THE UNDERSTANDING OF THE UNITED STATES GOVERNMENT
THAT THE APPROPRIATE AUTHORITIES OF THE ARGENTINE GOVERN-
MENT WILL CONTINUE TO AUTHORIZE PAN AMERICAN WORLD AIRWAYS
TO EXTEND A FIFTH ROUNDTRIP FLIGHT TO MONTEVIDEO AS A
TERMINAL POINT AS PROVIDED IN PAN AMERICAN'S CURRENT
PERMITS, AND TO MAKE A CHANGE OF GAUGE AT CARACAS CVICE
PANAMA) ON ONE OF ITS AUTHORIZED FREQUENCIES. THE USG
WOULD APPRECIATE CONFIRMATION FROM THE GOVERNMENT OF
ARGENTINA OF THIS UNDERSTANDING. UNQUOTE.
&
FORD
GERALD
LISHARY
LIMITED OFFICIAL USE
FORM
GEPARTMENT
or
STATE
Department of State
OF STATES AMERICA UNITED
TELEGRAM
LIMITED OFFICIAL use
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3. IN DELIVERING NOTE, EMBASSY SHOULD ALSO MAKE
AVAILABLE TEXT OF PRESIDENT'S LETTER PARA 1 ABOVE.
4g RE DATE FOR TALKS, WE ARE PROPOSING JUNE 16 BECAUSE OF
SCHEDULE CONFLICTS AND DESIRE PROVIDE ADEQUATE TIME FOR
PREPARATION. IF DATE IS NOT ACCEPTABLE, WE WILL CONSIDER
ALTERNATIVE DATE GOA MAY SUGGEST.
5. RE SITE FOR TALKS, WE APPRECIATE FACTORS FAVORING
BUENOS AIRES, BUT personnel AND SCHEDULING CONSIDERATIONS
WOULD MAKE THIS DIFFICULT. EMBASSY MAY ALSO NOTE THAT,
WHILE LAST ROUND WAS IN WASHINGTON, TWO PREVIOUS ROUNDS
WERE IN BUENOS AIRES. KISSINGER
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EXECUTIVE OFFICE OF THE PRESIDENT
OFFICE OF MANAGEMENT AND BUDGET
WASHINGTON, D.C. 20503
ACTION
MEMORANDUM FOR THE PRESIDENT
Subject: Civil Aeronautics Board Decision: Aerolineas Argentinas
Docket 24248
The Civil Aeronautics Board has found it in the public interest
to disapprove a schedule filed by Aerolineas Argentinas which
would include Lima, Peru on its flight 372/3 (Buenos Aires-
Bogota-Mexico City-Los Angeles and return). The Board has
determined that it would be inappropriate to permit a third
country carrier to improve its schedules between Lima and the
United States at a time when the Government of Peru continues
to restrict United States flag carrier operations.
The Department of State and National Security Council recommend
you disapprove the Board's order since it would not be in the
United States' interest to precipitate a confrontation on the
eve of resumed intergovernmental aviation negotiations with
the Government of Argentina. The Aerolineas Argentinas
schedule, in addition, is not new, rather it represents a
reinstitution of a previously operated service. Finally, these
agencies believe that the schedule change at issue would not
significantly divert traffic from the United States flag
carrier and that on balance the benefit to the United States'
aviation interests would be minimal.
INSERT
The Department of Justice, the Council on International Economic
Policy, the Council on Wage and Price Stability, the Office of
the Counsel to the President and the Office of Management and
Budget defer to the foreign policy conclusions of the Department
of State and National Security Council, and recommend you
disapprove the Board's order.
The Department of Transportation recommends that you stay the
order because the Board's follow-up comments provide new
information and require additional analysis that cannot be
completed in the limited time available.
Pursuant to Section 213.3 (d) of the Board's Economic Regulations,
the Board's decision is final unless you stay or disapprove the
order by May 7, 1975. No action is necessary if you wish to
approve the Board's decision.
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Walter D. Scott
Associate Director for
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Economics and Government
Attachments;
Disapprove the Board's order thereby permitting the schedule
filed by the carrier to become effective.
Sign to the Chairman under TAB A.
Stay the Boards order to permit time for further analysis
Sign letter to the Chairman under TAB B.
Take no action, thereby upholding the Board's disapproval of
the proposed schedule.
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INSERT
The Board hasfollowed up its order with a letter that
explains in more detail the rationale for its decision. The
letter reviews the histroy of the present dispute between
the United States and Argentina and concludes that the
new Lima schedule requested by Aerolineas Argentinas is designed
to take advantage of the Government of Peru's restrictions
on the United States flag carrier. The Board cites its
responsibility under the International Fair Comeptitive
Pratices ***** Act of 1974 and believes that its ptoposed
order is consistent with the intent of that Act and
necessary in view of the histroy of civil aviation relztions
with the Argentina.
The Department of State and the National Security
Councid have determined that the Board's follow up letter
does not provide new information.
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COUNCIL ON INTERNATIONAL ECONOMIC POLICY
WASHINGTON, D.C. 20500
file
September 4, 1975
CONF IDENTIAL
MEMORANDUM OF CONVERSATION
PARTICIPANTS
Argentina:
Antonio CAFIERO, Economic Minister
Dr. Guido DiTELLA, Secretary of State for
Planning and Economic Coordination
Dr. Leopoldo TETTAMANTI, Secretary of State
for Foreign Commerce
Ambassador Rafael VAZQUEZ
United States:
Messrs. Seidman, Dunn, Rosenblatt and
Ms. Brownell
DATE:
September 2, 1975, 3:20 P.M.
PLACE:
Mr. Seidman's Office in the West Wing,
The White House
After brief introductory remarks by Ambassador VAZQUEZ,
Mr. CAFIERO explained that the purpose of the series of visits to
U.S. officials was to describe the current economic/political
situation in Argentina and to indicate the steps that had been taken
to solve some pressing problems. He asked Mr. DiTELLA to provide
details on the economic situation.
Mr. DiTELLA noted that problem areas could be divided into three
categories: foreign sector; fiscal; and inflation. As far as the
foreign sector was concerned, Argentina faced a serious short-run
problem in its balance of payments for 1975 which was not a conse-
quence of long-term difficulties. He noted that in 1973 and 1974
Argentina had current account surpluses of $700 million and $240
million respectively. In 1974, however, serious inflationary problems
appeared associated with the price freeze that had been instituted
and by the first quarter of 1975, the current account deficit was
$955 million. Argentina tried to cope with this situation by admin-
istering a "shock treatment" which failed. Prices doubled in a two-
month period. In spite of this failure, there was a dramatic
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reversal in the current account situation with a resultant small
surplus in the second quarter. Mr. DiTELLA indicated that he now
anticipated a surplus of $280 million in the current account for
1976. This more optimistic outlook is based on the supposition
that the recently introduced crawling peg which ties the exchange
rate of the Argentine peso to changes in the domestic prices would
be successful.
In the fiscal area, Mr. DiTELLA indicated that the public
deficit had moved from its historical 5 percent of GNP to about
15 percent for this year. Argentina had introduced some tax reforms
to reduce this deficit to about 7 percent in the short run.
The rate of inflation is a long-term problem which will take
time to solve. However, the recent trend is in the right direction
Mr. DiTELLA noted, and he was optimistic that recent policy changes
would be helpful in moderating the inflation rate. Recent monthly
rates were 50 percent in June, 35 percent in July, and some 23 per-
cent in August. He hoped that Argentina would be able to achieve
an annual rate of 60 percent for 1976, very high by U.S. standards
but well below recent Argentine experience. Mr. CAFIERO then made
some remarks on the political situation in which he noted that all
sectors -- labor, business, military --- of the country were united
behind this effort which gave him additional hope that the policy
changes would be successful.
Mr. DiTELLA then noted that the short-run nature of the Argentine
balance of payments problem now indicated that the 1975 deficit would
run to $600 million. He then indicated that Argentina had requested
Secretary Simon to provide a two-year loan to Argentina of $600 million.
He felt this would clearly be of sufficient size and duration to get
Argentina past the current crisis it now faced. In support of his
request, he also noted that Argentina had provided some assistance
to the U.S. in 1968 and that Argentina had traditionally run large
trade deficits with the U.S. He also said that such action by the
U.S. Government would provide the necessary confidence to private
commercial banks in the U.S. to extend additional loans to Argentina.
Mr. Dunn stated (Mr. Seidman was called out of the room earlier)
that he fully understood the situation Argentina faced, that he felt
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the Ambassador and Economic Minister were proceeding skillfully
and in a proper way to make their case known and that Secretary
Simon and other Treasury officials certainly would give very
careful consideration to the Argentine request. He also noted
that Mr. Seidman had been pleased to receive the delegation for
the President.
The meeting adjourned at 4:20 P.M.
SAMUEL M. ROSENBLATT
Assistant Director
Distribution:
Each U.S. Participant
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