UNCLASSIFIED U S Department of State Case No 0-2016-16244 Doc No C06315131 Date 04 20 2017 RELEASEINPART 25X13 9 2 8 7 MORI DocID 7 SEMESVEXDIS 72 ss 7 NOT RELEASABLE TO FOREIGN NATIONALS MME DEPARTMENTS ONLY NOT RELEASABLE TO CONTRACTORS OR CONTRACTOR-CONSULTANTS DISSEMINATION AND EXTRACTION OF INFORMATION CONTROLLED BY ORIGINATOR CAPTIONED e k-NA Crxx e ty6 4 ri SOUTH AMERICA'S SOUTHERN CONE--BLOC Ans RN Of ELLIOEOCE Introduction and Summary Southern Cone once simply ageographical designation for Argentina Chile Paraguay and Uruguay is now a term heavily laden with political and ideological overtones To some observers the term has come to connote a group of repressive right-wing military governments that are insensitive to human rights considerations and-are united diplomatically in an effort to confront a generally hostile international environment In the geopolitical context the scope is often expanded to include Brazil and sometimes Bolivia From the US perspective the notion of a Southern Cone bloc is significant and troublesome because it is commonly assumed that the bloc is or will be anti-US in nature i e a reaction to US policy onhuman rights Observers who perceive or anticipate the emergence of a bloc contend that Southern Cone leaders viewing themselves as abandoned if not betrayed by the US have drawn or will draw together in mutual defense against US policies oc z w This paper examinet the validity of this new political concept of a Southern Cone bloe expanded to include consideration of Brazil but not Bolivia and offers some comments on its implications for the US The key question to be resolved is whether the unifying forces drawing Southern Cone countries together are sufficiently strong and comprehensive to overcome the divisive forces and rivalries that have long prevailed in the region Some definitions exclude Paraguay XGDS-1 2 WARNING NOTICE SENS1TWE INTELUGENCE SOURCES AND METHODS INVOLVED o o - s-A Report No 864 October 6 1977 FALL IEXT COU - DO NOT RE rACt REVIEW AUTHORITY Kathleen UNCLASSIFIED U S Department of State Case No 0-2016-16244 Doc No C06315131 D te 04T20 2017 UNCLASSIFIED U S Department of State Case No 0-2016-16244 Doc No C06315131 Date 04 20 2017 MORI DocID 639287 SECRET EXDIS - - There is little evidence that the superficial political and ideological similarities among Southern Cone nations as defined above--Argentina Brazil Chile Paraguay Uruguay provide a sufficiently strong matrix for bloc activity of an anti-US character Granted that countries' in the region are highly sensitive to internal security-considerations and that US human rights and with respect to Brazil nuclear initiatives have aroused some negative official reactions the likelihood -of a coordinated response to US policies is undermined by the manner in which domestic conditions and issue perceptions vary from country to country --In terms of the issues of national security and human rights matters of prime concern throughout the Southern Cone shared perceptions have produced formal and informal cooperation However the history of cooperative 'efforts illustrates as much the- limits as the possibilities for regional activity --Old enmities and rivalries inhibit the emergence of bloc efforts Most notably the long-standing competition between Argentina and Brazil now evident in the hydroelectric Itaipu project and the nuclear fields argues strongly against sustained and productive regional cooperation 'Argentine border difficulties with Chile Beagle Channel lead to the same conclusion --There are no economic grounds for regional cooperation sufficiently compelling to overcome the political differences that exist between Southern Cone neighbors Given Brazil's status as the region's economic power and the only Southern Cone country with legitimate pretensions to extra-hemispheric influence its participatioh in a potential Southern Cone bloc is crucial to the success of such an undertaking For a variety of domestic and international reasons however Brazil has little to gain from and has shown no particular interest in coordinating or leading Southern Cone opposition to US policies Human rights problems will probably continue to characterize the Southern Cone and therefore problems in relations with the US will continue to stir anti-US sentiment in influential sectors in each country The potential for intensified cooperation on the specific issue of human rights SECRET EXDIS NOT RELEASABLE TO FOREIGN NATIONALS NFIB DEPARTMENTS ONLY NOT RELEASABLE TO CONTRACTORS OR CONTRACTOR-CONSULTANTOISSEMINATION AND EXTRACTION OF 7 ORMATION CONTROLLED BY ORIGINATOR'D UNCLASSIFIED U S Department of State Case No 0-2016-16244 Doc No C06315131 Date 04 20 2017 sl UNCLASSIFIED U S Department of State Case No 0-2016-16244 Doc No C06315131 Date 04 20 2017 MORI DocID 639287 %- SECRET EXDIS - iii exists especially if regional leaders perceive pressure for domestic political changes that they would consider threats to the viability of their governments as now constituted The likelihood however is for intermittent and ad hoc o cooperation spurred by specific US actions rather than a sustained highly'coordinated diplomatic offensive pressed across the entire spectrum of US relations with the cohntries - of the region Ad hoc cooperation would lend marginal reinforcement to anti US tendencies already present in each ' country but it would not create significant problems for US bilateral relations with the respective countries of the Southern Cone In sum cooperation among the Southern Cone countries appears much more likely to be intermittent and ad hoc than continuousoand self-reinforcing Aside from a TraFg-ily superficial similarity in form of government the five countries have little in common except geographical proximity The movement toward collaboration stems largely from their negative response to external pressures on human rights and probably is not strong enough in the long run to overcome rivalries and Mistrusts that-work against regional unity SECRET EXDIS NOT RELEASABLE TO FOREIGN NATIONALS NFIB DEPARTMENTS ONLY NOT RELEASABLE TO CONTRACTORS OR CONTRACTpR-CONSULTANTSAISSEMINATION AND EXTRACTION OFD 4INFORMATION CONTROLLED BY ORIGINATOR UNCLASSIFIED U S Department of State Case No 0-2016-16244 Doc No C06315131 Date 04 20 2017 UNCLASSIFIED U S Department of State Case No 0-2016-16244 Doc No C06315131 Date 04 20 2017 MORI DocID 639287 SECRET EXDIS I SECURITY HUMAN RIGHTS CONCERNS AND BLOC ACTIVITY If the Southern Cone countries were to act as a bloc they would have to share their perceptions of current difficulties and still believe that individual self-interest would be served by joint action National security and human rights are the issues around which one might expect a consensus to evolve These are priority concerns for every government in the area they have stimulated repeated discUssions among civilian and military leaders of the various countries and have provided the basis for some formal cooperative efforts The extent and success of these undertakings however have been limited by the degree to which each country views its interests and circumstances as being distinct from those of its neighbors Security Concerns Promote Cooperation Southern Cone military establishments are politically conservative strongly anti-communist 'and preoccupied with internal security Military governments in each country save Paraguay have faced terrorist organizationi of varying capabilities over the past decade and armed forces le0ers tend to view such challenges as the fruit of an international Marxist communist conspiracy directed from Moscow and occasionally Havana This view has inspired some steps toward coordinating a regional response to terrorism The fact that Southern Cone terrorist groups have aided one another and in 1974 actually formed an international organization the Revolutionary Coordinating Junta has provided additional motivation Under these circumstances intensification of routine cooperation among Southern Cone security agencies was a logical development Intergovernmental activities have included information exchanges and the provision of limited training and advisory services by Brazil and Argentina to their smaller neighbors Other measures of a more questionable nature at least on ethical and humanitarian grounds SECRET EXDIS NOT RELEASABLE TO FOREIGN NATIONALS NFIB DEPARTMENTS ONLY NOT RELEASABLE TO CONTRACTORS OR CONTRACTOR-CONSULTANTSOISSEMINATION AND EXTRACTION OED FORMATION CONTROLLED BY ORIGINATOI UNCLASSIFIED U S Department of State Case No 0-2016-16244 Doc No C06315131 Date 04 20 2017 UNCLASSIFIED U S Department of State Case No 0-2016-16244 Doc No C06315131 Date 04 20 2017 MORI DocID 639287 SECRET EXDIS - 2have included the forced repatriation of political exiles and covert activities by the security agents of one country within the territory of another e g Uruguayan agents pursuing and mistreating Uruguayan exiles in Argentina A degree of covert cooperation was formalized in mid1976 under the code name Operation Condor As planned Condor grouped the Southern Cone countries and Bolivia in an effort to --upgrade the collection and dissemination of information among national security agencies and --undertake the assassination of allegedly subversive opponents of participating governments residing in Western Europe or Latin America Condor's initiation illustrated how mutually perceived needs could stimulate regional cooperation but the organization's history demonstrates that even in so crucial an area as internal security the limits of cooperation are very real Condor seems to have elicited initially enthusiastic su port only from Chile Uruguay and Argentina lAs the thrie ou ern Cone countries most concerned about-aile activities in Western Europe they were the only Condor participants known to have followed through on plans for West European operations Brazil specifically rejected any'invOlvement in European activities and along with Bolivia and Paraguay acted k_as a damper on Condor c '-By late 1976 all assassination plans reportedly had been shelved and Condor had been relegated to an information-processing exercise In all likelihood Brazilian Paraguayan and Bolivian leaders did not perceive security advantages in Condor that would justify the risk of public disclosure of not only nefarious deeds but deeds undertaken in cooperation with Chile's notorious security agency DINA ri Z5 xl I scent reports indicate that Brazil his not been attend 3 6 CiniOperiodic meetings of Condor delegates and that much of the attention at those gatherings has been focused on improving propaganda production and dissemination Ckeru haa reportedly been invited to join Condor and discussions con- -- 1 tinue concerning the possible onenina If a -1E1A1A af iir A 3 41 Europe_QK dig United Statpq c _25X1 SECRET EXDIS NOT RELEASABLE TO FOREIGN NATIONALS NFIB DEPARTMENTS ONLY NOT RELEASABLE TO CONTRACTORS OR CONTRACTOR-CONSULTANTSADISSEMINATION AND EXX4ACTION CINFORMATION CONTROLLED BY ORIGINATOR 1 4 UNCLASSIFIED U S Department of State Case No 0-2016-16244 Doc No C06315131 Date 04 20 2017 UNCLASSIFIED U S Department of State Case No 0-2016-16244 Doc No C06315131 Date 04 20 2017 MORI DocID 639287 SECRET EXDIS 3The organization's track record strongly suggests inn a European undertaking will not materialize either Crhat g Huthan Rights Response Efforts to coordinate a regional response to international and particularly US human rights criticism have run counter to respective national interesta and this has inhibited cooperation Certain perceptions of the haman rights issue and US policy it is true enjoy wide currency among Southern Cone military leaders The litany is well known and changes little from country to country -7-the US does not understand local conditions ---terrorists endanger national security and are the'real human rights violators --offiCial abuses are the inevitable by-products of the dirty war against subversives they are committed by underlings in the heat of the battle and do not reflect 'established government policy ' --US actions constitute intolirable intervention in domestic affairs --the US is abandoning iongtime allies menaced by cOmmunism while seeking rapprochement with Havana etc Nonetheless the fact that human rights conditions the status of bilateral relations with the US and priority national interests differ significantly from country to country seriously undermines the likelihood of a bloc response ' to the uS on human rights or other matters The-manner in which Chile's Southern Cone neighbors have assiduously avoided public identification with the Pinochet regime illustrates how human rights considerations can retard rather than enhange regional cooperation Despite noteworthy improvements over the past 18 months Chile remains the preeminent culprit in the eyes of many'of those modt concerned over the abuse of human rights throughout the world Chile's neighbors realize that despite any political or ideological sympathies they may harbor for the Pinochet government any joint attempt with Chile to deflect human rights criticism can only detract from their own images Thus while Argentina's SECRET EXDIS NOT RELEASABLE TO FOREIGN NATIONALS NFIB DEPARTMENTS ONLY NOT RELEASABLE TO CONTRACTORS OR CONTRACTOR-CONSULTANTSABISSEMINATION AND EXTRACTION UNFORMATION CONTROLLED BY ORIGINATOD UNCLASSIFIED U S Department of State Case No 0-2016-16244 Doc No C06315131 Date 04 20 2017 137 UNCLASSIFIED U S Department of State Case No 0-2016-16244 Doc No C06315131 Date 04 20 2017 MORI DocID 639287 SECRET EXDIS - 4 human rights record over the past 18 months has been'quantitatively worse than Chile's President Videla recognizing that Chile has a worse international image has determinedly avoided the appearance of close political cooperationrWith Chile Brazil likewise has maintained its public distance while quietly providing limited support to Chile through modest arms sales Paraguay's recent difficulties over an on-site inspection by the Inter-American Human Rights Commission IAHRC provides another example of how differing human rights perceptions and needs inhibit Southern Cone cooperation President Stroessner believed that Paraguay's human rights situation would withstand-inspection or at least that the impact of any adverse findings would be outweighed by an improvement in the country's image for having welcomed the IAHRC 'Brazil with its own human rights'problems was determined that Paraguay not permit an IAHRC visit and thereby set a precedent that other alleged violators in the region would be pressured to duplicate Brazil in cooperation with Uruguay therefore applied considerable pressure in Asuncion to persuade Stroessner to renege on his promise to the US to allow an inspection visit Another revealing example of the limits on regional coordination of human rights policies emerged from an abortive attempt to convene a chiefs of state conclave on the eve of the June OAS General Assembly in Grenada While our picture of what was known as Operation Lighthouse is incomplete the intention was for the region's presidents to draft a common strategy with which to confront the US--particularly with respect to human rights--during an anticipated showdown at Grenada The initiative failed because there was not in the end enough perceived common interest to support a unified front even for this limited purpose --Uruguay was one of the most eager proponents of the summit but like Chile Uruguay was less than an ideal diplomatic partner Montevideo's reputation for public insensitivity to human rights criticism and its occasional willingness to indulge in anti-US rhetoric because US economic and military aid had largely been terminated probably made other invitees hesitant to participate --Regional skepticism about overt cooperation with Chile has already been noted SECRET EXDIS NOT RELEASABLE TO FOREIGN NATIONALS NFIB DEPARTMENTS ONLY NOT RELEASABLE TO CONTRACTORS OR CONTRACTOR-CONSULTANTSOISSEMINATION AND EXTRACTION OE CINFORMATION CONTROLLED BY ORIGINATO UNCLASSIFIED U S Department of State Case No 0-2016-16244 Doc No C06315131 Date 04 20 2017 f7i UNCLASSIFIED U S Department of State Case No 0-2016-16244 Doc No C06315131 Date 04 20 2017 MORI DocID 639287 SECRET EXDIS - 5--Paraguay and Argentina found it difficult to refuse flatly to attend but wanted to dilute the potential anti-US pro-repression flavor of a gathering by seeking the participation of presidents from countries with relatively good human rights records and reasonably good relations with the US i e Peru Colombia and Venezuela --Bolivia appeared on the original invitation list but reportedly wanted no part of what promised to be a blatantly anti-US gambit The Bolivians were probably also influenced by their belief that Bolivila's human rights record at least in US eyes is superior to those of their neighbors --President Geisel for reasons still not entirely clear apparently decided that a presidential summit was illadvised and opted for ministerial-level consultations in Grenada II THE BRAZILIAN DIMENSION o A South American bloc formed primarily to oppose or counter US policies would be of concern in any case and that concern would be intensified considerably by Brazilian participation Clearly Brazilian promotion of any bloc effort would lend the group a significance otherwise unattainable' _Thus an examination of the Brazilian dimenaion of the whole Southern Cone problem is of particular interest Brazilian Ambivalence There is no unanimity within the Brazilian Government about how to handle external pressures on human rights issues and Brazil's behavior during the abortive summit episode directly reflects its uncertainty about how to deal with domestic pressure for political liberalization and improvement in human rights observance Brazil has in recent years largely managed to escape the international opprobrium directed against Chile and to a lesser degree Uruguay and Argentina because of human rights abuses The Foreign Ministry has assiduously avoided Brazil's identification with the more notorious offenders though its justification for opposing US policy and discouraging bilateral SECRET EXDIS NOT RELEASABLE TO FOREIGN NATIONALS NFIB DEPARTMENTS ONLY NOT RELEASABLE TO CONTRACTORS OR CONTRACTOR-cONSULTANTSSEMINATION AND EXTRACTION INFORMATION CONTROLLED BY ORIGINATOC' UNCLASSIFIED U S Department of State Case No 0-2016-16244 Doc No C06315131 Date 04 20 2017 UNCLASSIFIED U S Department of State Case No 0-2016-16244 Doc No C06315131 Date 04 20 2017 MORI DocID 639287 SECRET EXDIS -6 discussion of human rights is very similar Its defense has been relatively subtle and effective however concentrating on --legalistic and technical arguMents to deny the investigative authority of international human rights organizations --discreet lobbying particularly concentrating on Third World countries most of whom have at best spotty human rights records to prevent any broadening of authority of oversight commissions and to discourage acceptance of inspection visits which might set precedents and --public relations efforts in Western Europe and the US to minimize the seriousness of human rights problems in Brazil The proposed South American summit meeting Operation Lighthouse described above would have been entirely out of keeping with the Brazilian Foreign Ministry's more sOphisticated approach Indeed Foreign Minister Silveira's revelation to Secretary vance that such a meeting was being discussed may well have been a deliberate effort to scuttle the affair by insuring that the US was aware of it before Mrs Carter's impending visit The Foreign Ministry's scruples about a Southern Cone bloc notwithstanding there appears to be considerable support within the Brazilian military for a more confrontational response to US policies US initiatives in both the human rights and the nuclear field clearly linked in the eyes of many Brazilians have provoked an upsurge of bewildered resentment in military circles against what is viewed as betrayal by a former ally This emotional response has abruptly strengthened anti-US elements in the military while leaving in disarray those favoring continued close ties with the US Indeed the initial discussions of the aborted summit seem to have been handled by representatives of the security forces Army Intelligence it is entirely possible that the Foreign Ministry was excluded until preparations were fairly well advanced SECRET EXDIS NOT RELEASABLE TO FOREIGN NATIONALS NFIB DEPARTMENTS ONLY NOT RELEASABLE TO CONTRACTORS OR CONTRACTgR-CONSULTANTSXBISSEMINATION AND EXTRACTION 0D CINFORMATION CONTROLLED BY ORIGINATOA3 UNCLASSIFIED U S Department of State Case No 0-2016-16244 Doc No C06315131 Date 04 20 2017 UNCLASSIFIED U S Department of State Case No 0-2016-16244 Doc No C06315131 Date 04 20 2017 MORI DocID 639287 SECRET EXDIS - 7 Domestic Pressures on Geisel President Geisel is under strong and conflicting pressures--mostly domestic--in the area of human rights Hardline officers have pushed for more repressive measures in response to an increasingly defiant domestic political opposition growing anti-regime student movements and strong criticism by church leaders the press and other important elements of Brazilian society The security forces regard the current political ferment and lack of support for the administration with great apprehension fearing a revival of political violence similar to that which occurred in the late 1960s and early 1970s So far US pressures on human rights have contributed to an attenuation or at least a deferral of repressive measures that might otherwise have been implemented However given the prospect of further student unrest and renewed opposition political activity 1978 is an election year albeit under highly restrictive rules Geisel's relative restraint in handling political dissidence as well as his concerns over foreign reaction thereto could well go by the board Brazilian Interest in Participating in a Southern Cone Bloc Having said all of the above the question remains of what use to Brazil would be-an alliance or coalition with the Southern Cone couhtries to oppose US human rights-policies In purely objective terms the answer is probably not much It is difficult to see how an arrangement of this sort would enable the Brazilian Government to defend itself against external pressures any more effectively than it is already doing One cannot however discount the emotional factor already evident in the seemingly disproportionate Brazilian reaction to the State Department's human rights report last March The rejection of FMS sales credit and the denunciation of the military assistance agreement were of course at least as much responses to US opposition to the Brazil-FRG nuclear agreement as they were to the human rights report Nevertheless the Brazilians were undoubtedly egged on by Argentina i s and Uruguay's earlier aid rejections and felt they could do no less Further US pressures on the human rights or nuclear SECRET EXDIS NOT RELEASABLE TO FOREIGN NATIONALS NFIB DEPARTMENTS ONLY NOT2ELEASABLE TO CONTRACTORS OR _ CONTRACT CONSULTANTSQISSEMINATION AND EXTRACTION 0 F__ ORMATION CONTROLLED BY ORIGINATO_RD UNCLASSIFIED U S Department of State Case No 0-2016-16244 Doc No C06315131 Date 04 20 2017 UNCLASSIFIED U S Department of State Case No 0-2016-16244 Doc No C06315131 Date 04 20 2017 MORI DocID 639287 SECRET EXDIS - 8 - issues might therefore lead Brazil to seek a visible expression of regional solidarity against US policies particularly if Brazil's internal political situation becomes more agitated A more active Brazilian role on behalf of a regional -- bloc would work to stiffen resistance to DS human rights initiatives This was evident in the way Brazilian pressure forced Stroessner to reconsider--at least temporarily--his decision to invite the IAHRC to Paraguay Other countries o in the region however are more vulnerable to external pressures which neither Brazil nor the Southern Cone as a whole can do much to alleviate A unified effort would therefore tend toward the lowest common denominator in terms of positions that could be adopted without damaging the individual interests of the participating countries II BILATERAL DISPUTES LIMIT COOPERATION Working against any SoUthern Cone alliance are historical and periodically intense intra-regional antagonisms particularly those involving the three most important countries Brazil Argentina and Chile Brazilian-Argentine Rivalry The Achilles heel of regional unity is the tiaditionalo rivalry between Brazil and Argentina which dates back to the colonial period ' Without close accommodation between the two largest powers in the region there is no possibility for the emergence of a bloc that would significantly threaten US interests The depth of the antagonism between Brazil and Argentina is frequently exaggerated the two countries have never engaged each other in combat but there is no doubt that both covet recognition-as the regional leader and compete for economic aild political influence in Bolivia Paraguay and Uruguay Each constitutes for the other the only credible military threat within the continent a perception demonstrated by the concentration of Brazilian forces in the state-of Rio Grande do Sul which borders on Argentina and a corresponding concentration of Argentine forces in eastern Argentina Mistrust based on geopolitical rivalry is exacerbated by socio-cultural factors Argentines resentful of Brazil's SECRET EXDIS NOT RELEASABLE TO FOREIGN NATIONALS NFIB DEPARTMENTS ONLY NOT RELEASABLE TO CONTRACTORS OR CONTRACTOR-CONSULTANTSaISSEMINATION AND EXTRACTION 9E INFORMATION CONTROLLED BY ORIGINAT010 UNCLASSIFIED U S Department of State Case No 0-2016-16244 Doc No C06315131 Date 04 20 2017 UNCLASSIFIED U S Department of State Case No 0-2016-16244 Doc No C06315131 Date 04 20 2017 MORI DocID 639287 SECRET EXDIS - 9 ascendancy tend to regard Brazilians contemptuously as crass Ill-educated racially inferior nouveaux-riches Brazilians in turn frequently look upon Argentina as a nation of incompetent supercilious has-beens In recent years both countries have focused their attention on two issues in which their interests conflict development of the Parana River and the Rio de la Plata basin in which Brazil enjoys the advantage and nuclear development in which- Argentina holds the lead The river dispute centers on the question of prior consultation on development of shared resources a doctrine which Brazil rejects but which Argentina has pushed in international organizations from the Cuenca del Plata to the UN Argentina insists that the mammoth Brazilian-Paraguayan Itaipu hydroelectric project on the Parana River wi11 adversely affect planned Argentine projects downstream Brazil opposes construction of an Argentine dam at a height that would reduce the generating potential of Itaipu Paraguay a relatively passive partner in all of the projects has remained neutral in this ongoing dispute The nuclear issue is potentially more serious and it strikes to the heart of the two countries' mutual fears Argentina's lead of several years in nuclear development and its planned reprocessing facility have been a primary motivation for Brazil's attempt to close the gap'by acquiring a full nuclear fuel cycle from West Germany Each suspects that the ultimate objective of the other is to develop nuclear weapons technology for which it would be the most logical target This suspicion in turn feeds the desire for nuclear weapons development in both countries US efforts to forestall implementation of enrichment and reprocessing facilities in Brazil have inspired some degree of Argentine support for Brazil's position Argentina sees its own interests threatened by additional restrictions and safeguards placed upon nuclear facilities by supplier countries The similar positions of Brazil and Argentina on external controls do not at least at present suggest that there is any significant movement toward cooperation in the nuclear field between them however and there would be strong opposition in both countries to any such proposals Brazil and Argentina also differ over strategic cooperation for defense of the South Atlantic specifically regarding SECRET EXDIS NOT RELEASABLE TO FOREIGN NATIONALS NFIB DEPARTMENTS ONLY NOT RELEASABLE TO CONTRACTORS OR CONTRACTOR-CONSULTANTSasISSEMINATION AND EXTRACTION cie aNFORMATION CONTROLLED BY ORIGINATOln UNCLASSIFIED U S Department of State Case No 0-2016-16244 Doc No C06315131 Date 04 20 2017 UNCLASSIFIED U S Department of State Case No 0-2016-16244 Doc No C06315131 Date 04 20 2017 MORI DocID 639287 SECRET EXDIS - 10 a proposed South Atlantic Treaty Organization SATO Brazil which has significant interests and larger pretensions for influence in Africa has been consistently negative about i tht SATO idea Speculation has included South Africa as a prospective SATO partner andauch an alliance would certainly inhibit the success of Brazil's African policy More fundamentally Brazil sees few security advantages in such an arrangement with or without South African participation Argentina has refrained from any official commentary but the persistence of speculation on the subject suggests that some support exists within the Argentine military ' Uruguay which has the most to gain and the least to contribute has been the most active proponent of such a scheme Argentine-Chilean Disputes As in the case of Brazil Argentina's prickly relationship with Chile dates back to the 19th century and its abrasive character derives largely from a series of boundary disputes Most of these have long since been resolved but a few controversies persist The most important of these is the Beagle Channel dispute involving sovereignty over three small islands south of Tierra del Fuego While the islands themselves are of little value their possession has a direct bearing on claims to the continental shelf which Argentines believe contains significant oil deposits The dispute was submitted to international arbitration and a recent decision May 1977 favored Chilean claims Argentina however does not seem inclined to aOcept the ruling and discussions with Chile continue Chilean and Argentine territorial claims to Antarctica related in some ways to the Beagle Channel dispute also conflict and there is little prospect for an amicable settlement there In some respects Chile's territorial disputes with Argentina are merely symptomatic of its overall geopolitical outlook in which Argentina looms as an overwhelming and potentially dangerous presence Chile has traditionally tried to develop its relationship with Brazil as a means of partially offsetting Argentina's preponderance and Brazil has found thia link useful as 'well The smaller states of the region particularly Paraguay and Uruguay have over the past decade gradually gravitated SECRET EXDIS NOT RELEASABLE TO FOREIGN NATIONALS NFIB DEPARTMENTS ONLY NOT RELEASABLE TO CONTRACTORS OR CONTRACTOR-CONSULTANTSOJSSEMINATION AND EXTRACTION ORJ CfiFORMATION CONTROLLED BY ORIGINATa0 UNCLASSIFIED U S Department of State Case No 0-2016-16244 Doc No C06315131 Date 04 20 2017 UNCLASSIFIED U S Department of State Case No 0-2016-16244 Doc No C06315131 Date 04 20 2017 MORI DocID 639287 SECRET EXDIS -11 toward Brazil and away from Argentina Nevertheless Argentina retains considerable influence particularly in Uruguay and the Videla government is attempting to regain ground lost during the Peronist years 1973-76 Brazilian-Argentine competition is an exploitable resource for the smaller countries one they have used to obtain loans investment funds and trade concessioni from their larger neighbors None of the bilateral conflicts in the region is severe enough to provoke open hostility but neither are they likely ' to be submerged in the interest of regional solidarity except perhaps temporarily and in pursuit of very limited goals IV ECONOMIC FACTORS while economic interests of the Southern Cone countries are less divisive than individual political concerns they do not provide a strong incentive for intensified regional cooperation As in political matters Brazilian-Argentine competition primarily in manufactured products is a major complicating factor The Southern Cone countries maintain trade links that are determined primarily by bilateral agreements and motivations even though all are members -of LAFTA the Latin American Free Trade Association and except for Chile partners in the ' Cuenca del Rio de la Plata a regional infrastructure development pact These associations give rise however as much to friction as to harmony in the members' relationships with each other Argentina and Brazil compete overwhelmingly with their smaller LAFTA partners so far as trade in indditrial products is concerned thereby undercutting the main development objective of the free trade association LAFTA's'cumbersome item-by-item system of tariff concession negotiation has virtually broken down owing to the reluctance of the larger LAFTA members to accord meaningful trade advantages to the smaller member economies Commerce among the Southern Cone countries including Bolivia is significant nonetheless accounting for perhaps 15-20 percent of the countries' combined trade if Brazil is SECRET EXDIS NOT RELEASABLE TO FOREIGN NATIONALS NFIB DEPARTMENTS ONLY NOT RELEASABLE TO CONTRACTORS OR CONTRACTOR-CONSULTANTSIBISSEMINATION AND EXTRACTION OE CiNFORmATION CONTROLLED BY ORIGINAT08 UNCLASSIFIED U S Department of State Case No 0-2016-16244 Doc No C06315131 Date 04 20 2017 UNCLASSIFIED U S Department of State Case No 0-2016-16244 Doc No C06315131 Date 04 20 2017 MORI DocID 639287 SECRET EXDIS -12 excluded including Brazil the group's world trade giant the total is perhaps 10 percent Argentina is the chief cone trade partner for Brazil Chile and Bolivia while Uruguay and to a lesser extent Paraguay trade more with Brazil Chile's economic interest in closer ties with Southern Cone countries is based on its greater complementarity with Argentina and Brazil than with other South American countries In addition Chile's change in economic philosophy after the coup in 1973 brought it into conflict with its more protectionistic Andean Group partners with which it never had developed significant trade in any case and led to Chile's withdrawal from the Andean sub-group in 1976 Moreover Chile has a traditional trade bond with Argentina based on its need to import foodstuffs a requirement that has tended to rise significantly over the past decade At times Argentine willingness to provide foodstuffs on credit terms has been vital to Chile Chile alsO perceives possibilities for closer trade ties with Brazil based On the expanding copper and mineral needs of Brazil's burgeoning industrial plant The increasing ability of Argentina and particularly Brazil to provide their neighbors with capital goods technology credit and some direct investment funds adds to the network of commercial links within the Southern Cone At the same time closer economic ties tend to enhance the rivalry between the two larger Countries and intensify the search by the smaller partners for further advantages Nowhere is this more evident than in the fractious relationships and stalemated situation existing within the regional pact known familiarly as the Cuenca del Plata o The Cuenca agreement signed in 1969 between Argentina Bolivia Brazil Paraguay and Uruguay provides for regional development of natural resources among countries bordering the River Plate Basin Chile recently made overtures to join the pact but was accorded only observer status A requirement ' Estimates of regional trade are impaired by statistical deficiencies stemming from Bolivia's and Paraguay's landlocked positions Reported trade with Brazil or Argentina in particular may actually represent transactions with countries outside the region SECRET EXDIS NOT RELEASABLE TO FOREIGN NATIONALS NFIB DEPARTMENTS ONLY NOT RELEASABLE TO CONTRACTORS OR CONTRACTOR-CONSULTANTSAISSEMINATION AND EXTRACTION Q JFORMATION CONTROLLED BY ORIGINATOE UNCLASSIFIED U S Department of State Case No 0-2016-16244 Doc No C06315131 Date 04 20 2017 124 UNCLASSIFIED U S Department of State Case No 0-2016-16244 Doc No C06315131 Date 04 20 2017 MORI DocID 639287 SECRET EXDIS - 13 for unanimous approval of project proposals and a clear Brazilian preference for bilateral development agreements are among the factors that have limited Cuenca activity to the study Of possible infrastructure undertakings in such fields as water power and river transportation forestry exploitation and industrialization based on mineral resources of the region A $20 million development fund established within the Cuenca del Plata framework in 1975 may eventually lend some vitality to regional project undertakings So far however the pact has been more a focal point of dissension than of harmony between Brazil and Argentina with the three smaller partners tending to maneuver for bilateral developmental cooperation deals V IMPLICATIONS FOR RELATIONS WITH THE US As indicated by the foregoing discussion the probable areas of Southern Cone cooperation that would adversely affect US interests are confined nearly exclusively to human rights and internal security questions and almost as a corollary military sales and cooperation All of these countries-will continue to have serious human rights problems for the foreseeable future o and it cannot be assumed that limited improvement in for example Chile or Argentina will diminish their resistance to and resentment of US policies Indeed the effect may be precisely the reverse as attention shifts from primary abuses such as torture and other forms of physical mistreatment to the much more difficult area of political liberties and legal guarantees--the full implementation of which would probably threaten the viability of all the regimes in the region Moreover should Chile and to a lesser extent Argentina shed its pariah image by accomplishing real or cosmetic improvements in its human rights situation its value as a diplomatic ally would be enhanced and its neighbors would be less reluctant about becoming publicly associated with it There is therefore a clear potential for further collaboration among regimes that share a belief that US policies SECRET EXDIS NOT RELEASABLE TO FOREIGN NATIONALS NFIB DEPARTMENTS ONLY NOT RELEASABLE TO CONTRACTORS OR CONTRACTOR-CONSULTANTSRBISSEMINATION AND EXTRACTION 00 INFORMATION CONTROLLED BY ORIGINATOAD UNCLASSIFIED U S Department of State Case No 0-2016-16244 Doc No C06315131 Date 04 20 2017 6 UNCLASSIFIED U S Department of State Case No 0-2016-16244 Doc No C06315131 Date 04 20 2017 MORI DocID 639287 SECRET EXDIS - 14 are inimical to their security For the US the most important consequence of such activity would probably be the negative tone it would impart to other aspects of US bilateral and multilateral relationships Formation of a Southern Cone caucus to oppose US hutnan rights initiatives would marginally reinforce anti-US tendencies already present in each country- particularly if Brazil were to weigh in decisively in favor of such a response But it would not be likely to increase significantly US problems in dealing with the Southern Cone countries on a bilateral basis since internal politics and external needs and vulnerabilities will continue to determine the posture of each on human rights and other issues --Argentina for example may well decide that it can benefit by contrasting its relatively forthcoming and reasonable approach to discussion of human rights problems with Brazil's stonewalling position --Uruguay on the other hand seems convinced that the US has exhausted its instruments of leverage but it -would nevertheless like to have a larger ally or preferably several to back up its intransigent stance --Chile after several years of virtual isolation would undoubtedly welcome the formation of an ad hoc Southern Cone bloc as a sort of diplomatic security blanket but it remains vulnerable to US economic pressures and cannot afford--if it wanted--the luxury of a stridently anti-US public posture --Paraguay whose ties with Brazil and Argentina outweigh those with the US is likely to vacillate according to pressures and incentives from outside but it seems generally inclined to discuss the subject of human rights and permit an inspection visit without -however doing much to alter the situation within its borders In much the same way Southern Cone opinion about the status of bilateral military relationships with the US varies from country to country and is divided even within the individual armed forces The probability of a collective action to confront the US e g other countries following Argentina's lead and withdrawing from UNITAS the annual US-Latin American SECRET EXDIS NOT RELEASABLE TO FOREIGN NATIONALS NFIB DEPARTMENTS ONLY NOT RELEASABLE TO CONTRACTORS OR CONTRACTORCONSULTANTSAISSEMINAT ON AND EXTRACTION OrD CINFORMATION CONTROLLED BY ORIGINATOA3 UNCLASSIFIED U S Department of State Case No 0-2016-16244 Doc No C06315131 Date 04 20 2017 UNCLASSIFIED U S Department of State Case No 0-2016-16244 Doc No C06315131 Date 04 20 2017 MORI DocID 639287 SECRET EXDIS 1 o - - 15 - naval training exercise does not appear very great though individual countries may further reduce military ties-with the US as Brazil has done The question of arms purchases has largely been decided already by the major countries' rejection of FMS assistance Within the region only Brazil is in a position to retaliate against US pressures with economic measures and its decision on whether or not to discriminate against US investors or somewhat more feasibly capital equipment purchases from the US will not depend on interaction with its Southern Cone neighbors In sum cooperation among the Southern Cone countries appears much more likely to be intermittent and ad hoc than continuous and self-reinforcing Aside from a largely superficial similarity in form of government the five countries have little in common except geographical proximity The movement- toWard collaboration stems largely from their negative response to external pressures on human rights and probably is not strong enough in the long run to overcome rivalries and mistrusts that work against regional unity Prepared by J E Buchanan x22251 D G Smith M K Manzoli EXMIPT FROM UMMASSIFIMATION SCHEDULE E O 11652 5B 1 2 asaified by R - Kirk Approved by H L Estep x22229 -____ SECRET EXDIS NOT RELEASABLE TO FOREIGN NATIONALS NFIB DEPARTMENTS ONLY NOT RELEASABLE TO rONTRACTORS OR CONTRACTU-CONSULTANTSOISSEMINATION AND EXTRACTION 010 LINFORMATION CONTROLLED BY ORIGINATOID UNCLASSIFIED U S 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