1939: Argentina

After four years of preliminary discussion, the United States Department of State on Aug. 23 announced an intention to negotiate a reciprocal trade treaty with Argentina, and both Governments published lists of articles on which they proposed to discuss tariff concessions. Public hearings on the proposed agreement were held in both capitals in October, when objections were raised by the representatives of Argentina industries very similar to those voiced by North American wheat, livestock and dairy farmers. The need expressed for a high protective tariff and the outcry against concessions on imports indicate the difficulty of arranging a satisfactory trade pact between two countries whose economies are essentially competitive. The difficulty of resolving this fundamental conflict, particularly at this moment when the whole trade policy of Secretary Hull is under fire (see VENEZUELA), was recognized when the negotiations were suspended early in 1940.

Economic Problems.

The protest raised by our western cattle-country Senators when President Roosevelt tried to supply Argentine corned beef to the United States Navy is in line with the ban on Argentine frozen or chilled meat, excluded ostensibly on the ground of protection from foot-and-mouth disease but actually from a desire to keep out competitive meat products. The failure of the United States Senate to ratify the sanitary convention of May 24, 1935, permitting the entrance of Argentine meat from areas free from this disease, merely adds to the prevailing distrust of the United States in Argentina. Yet Argentina must find a market in this country for her food products and raw materials if she is to become the excellent potential customer for certain North American raw materials and manufactured articles that she might be. It is this need for an outlet for her own commodities that has committed her to bilateral trade pacts with Great Britain and Germany and to the measures controlling imports and exchange, adopted during the depression, which have not been intentionally discriminatory but have substantially cut down imports from the United States. Exchange control operations are, moreover, a source of considerable national revenue, the profit on them in 1938 amounting to 73,000,000 pesos.

The hostilities in Europe have altered trade channels somewhat. In November, North American exporters outsold British for the second successive month, and German sales to Argentina have come to a virtual standstill. Great Britain continued in the same month to be the leading purchaser of Argentine goods, however, a fact which, in trade terms, is reflected in the new import policy announced Nov. 21. This is designed to prevent purchases, as far as possible, from any countries except Great Britain and France, and was a reaction to the Allies' agreement to pool their purchases abroad. At the time the Director of the Exchange Control Bureau said that Argentina must continue to 'buy from those who buy from us,' and to increase its dependence on bilateral, compensated trade agreements, begun by the Roca-Runciman treaty of 1933. This is an outright rejection of the principle of multilateral trade. It looks, too, like a repudiation of the new system of import control announced in August, which established a 'horizontal control by commodities instead of a vertical control by countries.' Such a system would remove the 20 per cent price advantage British imports have enjoyed. A decree of Aug. 7 had eased the ban on 66 groups of North American merchandise on the import restriction lists adopted in November 1938, which had cut imports from the United States about 50 per cent. However, these relaxations of the restrictions on North American goods seem to have been only temporary. The controlling factor in Argentina's trade policy towards the United States is, of course, the unfavorable trade balance with this country, in the fifteen years from 1924-1938 amounting to an excess of $486,900,000 in North American exports over Argentine imports.

An International Wheat Advisory Committee, representing ten wheat-exporting countries and twelve wheat-importing nations, met in London on Jan. 10, 1939, to discuss problems of production and marketing in view of the falling price and world surplus of approximately 900,000,000 bushels of wheat. The Argentine Government refuses to accept a quota on the Republic's production, insisting on freedom of action to produce and sell as much as she can. The Government's holdings of wheat (approximately 158,000,000 bushels on July 1) are embarrassingly large, and the operations of the National Grain Board have entailed heavy losses, leading to rumors, denied by the Government, of an intention to devaluate the peso to offset them. The Exchange Control Board estimated a loss on wheat operations by the end of 1939 of approximately 100,000,000 pesos.

Finance.

On Aug. 20 the Argentine peso, which had been pegged to the British pound, was linked to the United States dollar in an attempt to avoid its continued fall, accompanying the drop in the pound. Congress has agreed to maintain the 1939 budget estimates in force for 1940, in order to help adjust Argentina's economy to conditions created by the war in Europe and to permit a day-by-day consideration of financial problems. Vigorous action has been taken to prevent profiteering and to protect the public against unwarrantably high prices. The last report of the Ministry of Finance shows the revenue in 1938 to have been higher than was estimated in the budget, with the result that the authorized deficit of 77,000,000 pesos was reduced to 15,090,000 pesos.

Political Affairs.

The publication of a secret document in Buenos Aires in March, called a forgery by the German Embassy, which indicated a plot on the part of the Third Reich to annex the six southern territories of Argentina, known as Patagonia, caused some concern over the question of Nazi penetration. In his opening message to Congress on May 11, President Ortiz attacked the introduction of foreign ideologies. Four days later a presidential decree was issued, making mandatory the dissolution of all political organizations directed from abroad. In the summer the Chamber of Deputies voted a thorough investigation of Nazi and Fascist activities, it being thought that the court investigation of Alfredo Mueller, acquitted of the charge of 'directing anti-democratic activities' in the country, had brought to light enough in the nature of subversive activities to warrant an inquiry. The growth of Nazi penetration in Latin America has been the source of anxiety to most of the American republics.

Claims to Antarctica.

In view of Admiral Byrd's expedition, financed by the United States Congress and intended to establish North American territorial claims in Antarctica, Argentina's preparation of a formal claim of sovereignty over the region between the 20th and 68th meridians, W. long. constituting more than one-fourth of the area over which Byrd intends to establish United States sovereignty, is of interest. Argentina maintains that this area is a natural geographic dependency of the South American continent; she also claims to be the only country that has actually occupied any Antarctic territory since she has maintained a meteorological observatory in the South Orkneys since 1904. France, Norway, Germany and Australia all claim parts of Antarctica, and Great Britain asserts a claim to part of the area claimed by Argentina. Whaling in Antarctic waters and potential coal and mineral resources give more than a scientific interest to Antarctica. Argentina has vigorously opposed any attempt to extend the Monroe Doctrine to this region of the southern continent. See also INTERNATIONAL LAW.