.

DEPARl ME N T 0,.- S1'/,T E

Dec~uber 4, 1970

MEMO~GJ~.DUH FOR NR. 1:-lt:NHY A. KI:SS "l NGER

THE WH 11' E HOUS 1::.

Su bj G!C t: Chi l~

Ther e c.rE;!: E:!.itC l o.sed fc:r: c<Jnsider.at.:. :n.l by the Sel;"lioz:-

Rcvi ew Croup p~ p er s prep.at: ~d in 1: es pons e to your n.G!I:"LJ.C r ar."
dum of Nov~ber 27. The d is cussion papers hav~ been
~pproved and tl:.e s t.a t us r-eports no C·ed b;.. the Ad Hoc
ln te:.r- Ag e:ncy Wc•r king Croup on Chi 1-e . The Ad Hoc Work i tlg
Group revi.e\4ed a draft study of i.I:r'l:p lic ations and options
for the United States in th.e event Chi le take s steps t.o
nationa l i ~e or e.xpropriate U.S . busin-e ss ince:res t.s it)
Chil.e; it wa.s agreed 'that the d r.aft . . . .ould bQ e:Kpanded
and revised a:nd submit ted through the Ad Hoc Group for
the ne~t ~e@ting of the Senior Review Group.

Q_ ,.- •,
..
_
Jt~IL{- C~~
1\J~ John H.u gh Ct: im:ui ns
Ac. ti ng. Chai1.--man
Ad Hoc Inter agency 'Worki ng
Group on. Chile

Enclosure:

P~p ers. on Chile

f Downg'J:RFJ ~ncmals;
not aut.cmatically de.~la.ssifi.e.rl..
 TABLE OF •:;ONTEN':·s

1. Security Impl icat i ons of Chile' s Pa~tlcipaticn in

the Int of!:'r -Ar;lei;ic a n De f e nse Board (IJo.DB }

2. A Study of Options for U.S. SC1~tcgy Co~c er~ing

Ch i. l e m s Fut: urc r3 t:'l:ic i.p.:!ticu"l :.L': t!:e Orgaa·.izat ion
of ~oeri~an St ates

3. Logal Impllcation s of Chilea n T1:ace with Corr;nn.m is t

Countries

4. PJ ~n.s for Congt·essional Cons ul tat io:ts on U. S . ?al i cy

To~a :rd Ch i. I.e - J a n.ua ry 1971

S. Status Report on U. S. Ac t i ons Discourege

to Fu~ th er
Re.S Ulllpt.ions: of Re lations r,,ri. th Cuba.

6. Status Rep crt on U.S. Stance on IDB Lending to

Chile

7. Status P..~?ort on R~e:st·rict:ions on I BRD Lend in~ to

Chile

S. Stat u.s Reporc. on Discussio1'1 s to:~i.th Export- Impoa:-t Ba nk

on Di scontin.uat ion of Ne~' Credit s and GLt 2~anr: ees

9. U . S. Scienti f ie Proj ec ts in Cld l e

 .s~ c.:·..:r i. tv !nplic ~t :i. ot·. s c·f Chil e. • s Pa_tieip<:.L i ol) in t.h ~
- --~ ;.;::Am~r ica.a De !c-n:o; e Bea r e ( U\DB)

'C I SCUSSION ~

':'he Lt.,D3 has .acc-ess to three c.:1t e8c>ries of c.lr~ss if i ed

i n fe rmat ion:

U.S~ clas s i f iC'd in f orm~tion n:.adc .':lv.a i l<ib.lc t o the

lADB;
lAD B. ~ lassi :ied doc:uroe :lt::s ;
IADB classified discus~ions.

u . S . Clc:.s.si f ied In form~: ion . The IADB as a body h.qs 32.

.acc e~s to a.ny c l ass ifi.~d U.S. doct=r:H~nt s. The U, S. TI!Cmh~rs
of che Staff and Sec t; eta .:-i..ac have tempe>.:t:a ry· .1cce ~s t o U.S.
~;:l.a s.s :.f:i.ed in forul~t i on thto •.1gh t he U, S. dQ:legat ion, bue such
· in EoJ."'[!lation is not made avai l able t.o the B·;..ard .::!.$; a •·h ole.
The U. s. De legatio n ~rovidesJ f~om time to time> class~fi.ecl
brief ings of cur :cern: iriivC~t~n-ce (the mr -: r ::-ecent ·...:..; ~ on the
}{iddle ,F;aat Situation~ on M.arch 5 ~ 1970 . l 'he J:',~ tet:ial pre.<>ented
was U.S. CON}' IDENTIAL, hCLnd1ed as •'IADt SECP..ET11 by the HoaJ;cl..
The IADB occ~sionally receives clfossified info1~atibn on i~ s
trips; this i nfot"C.lat ion is r.-cver of a category above U.S .
CONFID ENTIAL- Nat iona.l Disclosure Pol i-cy p~rndts disclos ure
or. a case by case basis of U.S. SECRET information about Cuban
st.:h".J'ei.-s ive act ivi,t i es to the I.ADfl. ; however,. thi s h.as occurred
only once .
LADB Class i f i~d Docili~ents. All member d~legatio~a have
access ·eo all c _ass i fied document s produced by the Boa~d.
These doc UIDe nt: s inc 1 ud a minutes of a 11 Boa rd. meetings ,
rnanua ls , staff s t.ud ie s. , ~ nd planning papers . -n~e most com p

p1:eheosive docUITi.eilt. is the IADB •'strat~g ic Evaluation

-of the Situation" {an a nalys is of political, econO'I'iliCt social
a nd mil it:ary fact ors which exert i n f h1en-t:e oC~~ 11 continent:al
sec\!ri ty policy 11 ) . The inform~ t ion contained i n these docu-
ments does not d.ir~ctly affect [J .S . security. 1·h~ subj e~t
mat t:er co1.\.tained in those of the lli.ghe.st ciassificat io:1 ,
u iADB S~ REF, 11 . is r-e l atively bland .. The s igt'\iEicCln.ce of its
compromise ~ould derive from agrf;:.ement by the ! ADB or from

,. f~ secRE'r !ooois _,
' .. : : ..• : -:-)" ;. . s.. 1~
-r'

-..
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 . '·

\:. ~"sr::cru:T
- 2 -
upn~~ ~
the :. n.=:.h:__ i ty o f U)e I .t..m~ t o e1 g;t:12e on subs cant ive mattet s >
r~c:her t ha.n Frcm th<".: fi'J."l t-e r :.a.l i t sel f
T

I/J,D B Di sc1. s s tc.ms <t ncl Brief in&.s . Access. to t.h e c lt~.ss i fie d
discuss ion ~ and briefi ng.s of the: Board c_:O[) S t itute-s the gr..;evest
s ecL1t'ity p~oblcm. Thi5 provi,des r.:ny member the op[>Ol:t:llni.ty
to rep o rt ~ 11 disc u ssions , d i s agt"e ements, p[)s LtioJ"I! S of de 1eg8 -
tic us, etc. lt uou ld be imp~ac ticable to keep ~11 c ~ assi­
iied mat ter out of t hese d iscussi o1'1.s. Thus , Jn~be:l:' s hi.p i:-~.
the l ADB i.s ?.. ,_.;i. nde>~..:o r::~~ -whic-h to obs ervc het':li.spher::.c rni.lita t"y
~tt::.ti..Ld.es <lt'ld to conii ~ inte l l:i.gence gat:he:ted frcrn othe::-
sources.

Curren t: S i tu~ti.on . There is no present evide':")ce of sut-

v e rs i on of t he Chi l ean Arntf!d Forc-es~ cw of di.s rup t;i.ve: ta<:.t:ic s
o:"l t he ps.rt ,..,f the Ch i l e Rn deleg.s.t ion to c::ac ·u \DB, th~t
warL-dn t s e:xpuls im of C:~ile a.t this t i me·. A mot i.cn1 t o E!1C;JeJ
.C hi lEt today rright r-eceive a bat"G! maj ority of the vote; a
di:.f.mat i~ event ¥.'ould be required to shift enoogh vct es to a
s ignLfic ~nt rr.sj ori t y .

Precedent. Cuba ~as denied access to cl~~sified session -

<.: nd documents of the lADB on Apri l 26 ~ 1961, ot"t a mot ion by the
11
UnitQ:d St.ates ~ ~hilc the present and ~ident milLta.ry alliance
exists bet-r...·e~rt Cuba .and the Soviet :Bl oc/' by .a vot e of 13 to · l
(Cuba). wit h 2 "-bs tent lens (Cbilc and Ecuador) and 3 ncnpart i ..
cip.at:ing o~r.a.z.il' Hexico ~ Veneg;II,H!la) .

Conclusions~

No ~e t:'ious darnage TNould r es ult from compromise- of

classifi ed information av.eilab le to che IADiB·.

·r here .;l:r:e no overt grounds for denying nolJDCll lAD5

ac¢e ss to c lassified ~nformation ~r far expelling
Chile f ~om thQ L~Dn at this time.

EXJHtlsio=" ot" cx.clus ion proceedings at t h i s timQ

c.ou"d resu l t in embarra ssment or defeat.

'Fhe U.~T Delegation to the I..ADB ·and the Director .and

1J. s. nlmoers c f the Sec. rc tari.a t should be asked t o:

~
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~j .~·~ SBC~~'fi~fQD IJi~
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(F:.) kce ~ tn·~ r".d H o~ JntG!:ragenc yo Wo't"k ::ng G1:01.~p.

apprise d o~ ~ny s hifts i n the ~t titudc~ and
a ct: ivit.ie s of che Chi.l12.an delegn.tion ;q n d of
dev e l oping a ttitudes and probl~m s wlthin the
IADB 1 ,.;i t h speci:t 1 empha s i s on the 1. ike 1. i ho od
of disclosures o f hemisph eric m ~ litary a -titud c s
dm.- in,g. cl~ssi Eied d i~ cu ss ions that mizht have.
adve:::-.se c onscq llcnc:es. t o hemispheric: :.;.e:c:uri ty ~

(b) T~ka necessary ste ps ~o l ns ura a dded protec r1 on

of U-S- cLassifi@d info~nation both i n l~c al
p1;pcao:::rl.ings of the Boal:"d and on tr i ps duJ: i ng
which s.u<: h info rna t ion n"Li gh t be divulged . No
U .s. SECRS..T i nfor:uation on Cuba should be di.vu l ge:cl
'W lthout the appt"ova 1 of the AC. Hoc Inte ca gEHlcy
Wo t.-'k i ng G1.- (a:. p .

2- 'l'h.r:! Inte ll ige nce CO'ir!nuni ty sh ould car.c f ully scTeert

Chilean o f fice~s a ssign~d to the Chilean d e::.egat ion :.
should alert the Ad Hoc Interagency Wet' king Group
to changes in t he po l itical eh~cacter of thg ChileAn
d.e 1~ga:::ionJ .and s h~uld keep e h e Ad Hoc Gr-oup apprised
.o f any E2Vidcnc e of inEiltr.at i on of t'he Chilean a:rmed
forces that ljo.iould increase the dang er o f compromise
of c la s .., if i~ d informatio n within t h e IADP...

·.
'

:"'-·-= .. . . • - ..._
 A Stud Y. o { Or t i OC1 s fo r 11 . S . S c :rate .I;Y
f oncen"ling Chile ' -" Future p,q r ti,c i: pat i on. i ~·}
the Oq:;ardz..:.H ion of .t'l.me t"" i c an State-s

The following study div i de $ t ::-.e prob lams r,.4C ll'..C!.)' face w:.c.b
1.-r:!spect to Chi.lc 1 s future. pDr::ic ipation :.n tb.e OAS ii'lto five
cstagories~ a s fo llows :
!. Cbilean con tinoa.t ion in or ~:<c lusion
t rom t be OAS.

1 t. Poss i..ble OAS sanctions agG; i..ns t Chi Lc.

I II. Possible Ch;ilcai:'l i.ni tiative to end

OAS isolatio~ of Cuba

IV ~ Chil~a.rt genera! td.ctic s in t.he OAS

V. Possible Soviet military facilitie s in

.Chila

The Allende Government can be exp~ctad to move soon~r or

lat12-r to seek to -weaken U~S. influeuce in the OAS and to
reduce tt:..e eff,e ct:ivenes s of the Organization as ooe ge:ru:~t'~ l ly
cooperative ~ith U.S . objectiv~s. A ll~nde•s present decision
to keep Chil e in the OAS is in 1 ine with this purpose. Ch:i.le • s
act ions w:i.ll de'\•elcp as a mat:te:L of t.imely oy.pol,""tuni.ty .

In d~ve loping U.S. strategy to deal with these proolc~

it is assumed that: we: ~ould coutinue our preS'ent role of
d isc reet leadership in the OAS . This means limiting U. S.
visibility in. t:he OAS insofar as practi<=able, playing our
roles behind-the s~~nes as ~ucn as possible! en~ourag i~g the
Latin ~ricans to take tbe initiative but , if necessary,
feeding suggested inltiatives to them! taking our own initia-
tives jointly, and <=Onsult:in.g wLthout scrirlency on al l problems
of mportance to us . We th\LS ·e ndeavor 1:0 minimize L.."itin
Amr2rican sen.s.itivity to U.S. pr·epond~rance w-hile stil l a..s.sur i ng
the de.gre:.e: of U.S. lea.der~.hip ·nece-5 sa.:ty to bring .ab rn.:.t meaning-
ful action, i.e.. a discreet leadership tbat the. Latins th~m-

•
 .t :~'s/c~i~/N~rs. ~
U e."' "-' 1·"'" - . .
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expect of u:S . We mus t .a 1 s'!J x ecogni z.e t h.a t ~ de s ~i t e:

s e 1v e s
the e ffectivene ss of our leader~hip, ~he tati ~ Amer i=ans ~r~
increasi~gly determin ~d ~o a~sert the i ~ ~ nd~ vi~ua l pos it ion s
.and not t o s l P-vis h ly follo1.o1 th e U.S . lead.

A ba sic as s-.:mpt i on that govern:!: a 11 ccm;::-c::nents o f this

study is ch a t th e: U.S . wil l not: a.·:>andon the 01\S as D !'l:! g:i,o niJ. l
oxg.an i z..ation in f a·. to r of a. s na llcr ~s soc i tlti on b outtd t ogecher
by milita;~;:y t:i,o2s ·b ut p;r;ogressive. :..y de:? t:ived o f :its chara c::ccr
and auchor i ty a s a regional org~ n iz ~tion .
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1

f'S ECR ET/NO:) Is :

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:Pr:ob lE:::m:: Chi l~Cln contim.lat i 0~) i.n 0~ e:.x.cl HS ion rro•.ii tne OA~

Considerations~

l . \.fni le ,P,ll ende was higb l y critic~ 1 o f tbe OAS in his

campa i gn pl.a. t Ecrm~ he has: :!: ictc e st.a:ted hi s irtt-2-£'1tion o.E kt::!E:rp l. ng
Chile i.n tbe Oi\S. Chi lean offi c l.:: l s expr ess part: ic.u lar :.ntere5 t
in ut i lizing the fP.ociliti.e:s of IA-ECOSOC, Gl.AP ~nd t h e oLher
economic-social machinery of the OAS~ as well as the IDH . This
p-re.se.r1t Cbi laan ln t ention of s t.s y inB in the. OA5 u1.ay chat:1 ge ,
bowever ~ as a :resu lt o£ Chi t ea-n :i.n t.c~nal poU. ti.c.a L dynar:~ic:;; ox
evolving requi~em~r. ts of Chilean fo~eign policy_

2. The only precedent: for exc lucli..ng a me:nber: f:-om

participation in the OAS is the Cub an case. The Eightl: Heeting
o!; Foreign Minis t~rs (l--lB-i) (Punr::a del Este, January 1;>62),
acting under dhe Rio Treaty~ refe~red to cxtrscontinental and
Cub.an subversion as backgrOUII')d bt:.t gave as specifi.c reasons
for excluding Castr o 1 s Government the· fac.ts that (a) MarK ism./
Lenin ism is inc ocnpat:i.bl e wi tb the inte!:"-Arnet ican S}'S t:.em. and
(b) a lignment with 1 and especially mi..li.ta.ry .assist.c!.nce: .ft-om:t
the Comm.uni s t: pO"...r.e r s bre.a~s t:h.12 solida:ti ty and coll ective
secur ity -of the inter-Americ~n system un.de::t: the OAS Cf::arter and
Rio T:t:eaty . (On Oece~ber 2~ 1961 Castro had declared the
Cuban Government to be Communist.) There was a sepa rate Eighth
MFM resolution ~c'udiog the C~stro Government f~am the Incex-
Amc.rican Defen.s12 'B oard,. ..-...~ ich h.ad, in fact:, ah:eady (.Apri 1
1961) denied the Cub~n~ access to ~lassifiecl material and
sess1ons on se.curity grounds.

3. Allende has not ~p 1 icit 1y idencified h[s Gove~nm~nt

as Ma.x.x iat/Leniraisc.~ d·escribi.ng i.t !'athe:t: as a tefti~ t/s ocialist
coalition.

4. All~nde is intent on clos~r re lations ~ inc l uding

econcmic ~ wi tb the rrsociali:!:t 11 cout1tries, but has n at s~ok.en
of military .alignment. (He. has already resu:ned full relations
with Cuba .and ~==:tablishe.d com.me~ci.al t:ela.tians with North Kox:e~.)
 SECRET /t~ DDIS

~ 4 -

S.. Thus, A_ 1 e nd !'!: has .so far .liVOid.:'!d i.der. ti fy: n g hi~ ':)a 1 i t-
ical system a nd estab l ishing rnilitaty a)i gn~ents in a way ~hat
could n.ake the E.igh th :Y.F11 grounds f o~ ~c lus ;Con £] t Chi le ~n
case .

6 . l{orao'..-Tcr • Allende~ unlike c.~sn: :J, i.s the pt:'Od\lCt of

·c onsti.t u tiona.l election .and at present is !;OVet:'nin~ wit~ i n the
f x:- .ame\oi·or k of <: Otl s t :L tu t ion.a 1 i nstitut i ons .

7. It is likely t hac. the: Chi lean$ w;i,ll be mo re. soph is-

t.ic a ted than the Cubans: and that: the~r wi 11 c:ndcav·o r ~ £01; .;::: t i me
at l east 1 to avoid givi ng clear occa si on for ~iquiring OAS
dec is ions, i. e. a :.,as is for ~:he app t:::.ea t t :.)t: of t he :;.igh. tb MFN
critexia for exclusion.

8. It is entirely possible t hat at sone po:lnt do'WTI. the

track Allende , in order to we.:J.ken che OAS and embarrass the U.S .,
may ex.p l ic it 1 y cha 11 engc t be 0.4-S on the cx:c us ion i.s s"L e . This
eould oc:cur p.a.rti-cul.a.rl·y in c:oon~c tion wi th the g:t:owing feri!J.ent
in the OAS on the Cuban issue. (See also SQction III).

9. A maj ority of CAS rnem~e.l"s ~re likely to prefer l i.v:lng

Ufi~omfortably with Chilean par ticipation unless and urttil
Allende t:t: i g.gllrs g:roun.ds fo:t ex:c lusion. EN en then, mcs t
member~ a:te likely to give less weight to the espcusal of
Communism internally and/o~ alignment with the Co~munist
p~we~s than they ~ould to the factor of interventi~iism (~1-
thoug.h th.e latt~:r was~ strictly speaking. the grol.lnd for the
imposition of s IUI.ct.ions against Cuba. -rathel:" than for e::xc:: Ius ion ) .
Thust despite the diff~rent criteria for ~elusion and s~nctions
applied by the Eighth and Ninth MFMs~ there is a tendQncy among
t:h.e. Latin A•·ner icans to loo'k upon interventionism as the C'I"UX
of t:h.e entire Cub ~ isolation policy and to think of intarna.l
Cor.m:runi.sm as a country • s o"'-n aff.ai t: and on mi li tat"y ties to the
Soviet Union .as a matter of con<:!e~n lat:gely t::l th.e u.s.

10. An increasing trend towat:c advocacy of ••un~ versa U _ty"

i:n the U. N ~ • shared by many La r:.in A:ne:::-ican. count :r ie.s, wou l d
m.ili tat.e: ag.ains t c.n addit!iona 1 e.xc1..1..1..~ion ft:~n the C)A.S . U.S.
 ... . - 5 -

-
accep:.ancc of this pr in c.: p (:!: i111 t he :J . N. wo ulc J of <::ou r s.e ~
g-r e.atly comp l ic:at e a lL ~. posit i on [avor £ng t f:e e>i c lus ion of
Chile fr~~ the OAS (as it would =h e concinu i ng exclusjon of
Cub..1).

1L An act erupt t o exclude Chile Et' nrr1 the OAS under

pl:e.s ~nc ci t: ClJI";'IS t a.n·r::es i. ~ . ~ · n tho2 ~bsc:ncc of c leax: grounds
and gross provocat i on by Ch i le, woulrl be mast unlikely to win
suffic i ent su pport. Sucb en eff ort would, ~ n ~ddi~i cn. b~
highly di visi vc; would 1 if S?Onsor.ed h y the U. S • • be .".! de c i..s h•e
and ~:ra.CJa tic act of open has ti 1 it)' tow-1rd Chi lG!; would a 1 i c~a tc
many of our Lat i n American supportel: s; and. wO\J l"d project an
unfavorab le public image .

12. In al l our recent c onve·. :saciotlS r...•ith Latin A.me!: :.. c.an
gove:rnments .and their OAS representatives, none has suggested
excluding Chile \:mde::: pT·esent c i i:'cums tances. If wt:!: "·e.t:e to
attempt to galva~i2e suppo~t for ~uch action under p~esent
circumstel.nc.es, ~e m:ight bring .into line: a :s mal l h.andfu.l who
more: or less autornath~.a lly follow the U.S. l ead, .suc.h as
Nic~r~.guc, hue ~..·~ .c.oul d expect strong opposition from s\.lch
co~ntries as Colombia, Vene~uela, E~uador, Peru~ Bolivia,
Mexico and tn~ three Com.~nwca 1 th Caribbe.F-n members. Arge.nt i na.
would be unl i kcly t.o support us be<eaus e of its desi.t:"~ t .c avo i d
p r obl~~£ with its n e.ighbor , ~nd we could not be certa in of
suppo-rt:: from Brazil, [Jrugua.y 1 ot:" most of the. rest ,

13 r Ihi s current negative prospec t wo·.Jld be al t.ered in

direct proportion eo the c ! ari tyj extent and blatancy of
Chilean actions ini mical to the inte-rests of OAS t:J.e~r~bei:'S othBr
than the U.S., partic:ul.a:t:'ly act$ of intervention. Even uode=
materially alt:ered circwnstances, hcwe.v-et, th-e cb.a.nges i n the
Latin .A,Il,e rican po litical e1nd so cial en'.ril:on..ro.-cnt since the early
sixties would make the ta~. k of obtaining the necess.=:~"ty t:~o ­
thi~ds majority for ~eludi ng Chi ~ ~ consid~rabl~ more diffi~ult
and Tl\Qt:'e divi.sivE! than it was with :t:es pe~;t to Cuba in 1962
(when. a rni.nimum. two-t::.hitds was barely achi.eved)~
 ...

Option 1 :
Seize early opportnnitias to ~onvtce o th.c:t: llH~1nbet's that
Chi lean part ic i p<itio<e i n t h e OAS is una.::.:c e ptab l e and tl1.e t ~ <::.:s
sooTJ as fes si b 1 e ,. t he: Eieh th MFM ~ri t:er i.a fo:~: exclus i on s hould
be it'~terpre t ~cl to .appl y t:o t he Chi lean :-a s e .

a. Ihi. s course would~ if suc.cess ful ~ ren)ove a

pote11tia l ly dist"upt:ive elemenr; fram the CAS
and frOTJ oth~t: o.r gans o £ the intet' -Ame.ric.ao
syste'!T1 (incl!.uding ehe IDB) .

b. t..'hethe~;
successful or not, it 'i-'Oul d IIlak~
absolutely clear our hos~ility to Chile and
to potential like-minded governments in the
Kernisphere.
c. It would be .a l;i,'<at:=ning to the SoYiet s that we
were determi:n.ed. co l imi.t thei.:r scope- of
.e~ ti vity in toe Hemi sphe1re.

d. It: vmuld oblige. the OAS ID{!lnbcrs to st.3n d up

and be counted.

D>issdvantagcs::

a. This .effort W'Ou1d be most unlikely t o succeed

for the lack ~f support ft~ member ~ountries.

b .. I. t would be wid.e:ly a nd pub lie l y interpreted

as .a pre:mature ove~-re.action.

c. It would be used by Allende to belp con-

solidate his governmcntrs position i n Chile .
 d. Jt ~ight pr ovoke (~r tbc= ~adicali ~ a ti o~ o f
t he Cbil ean Government and even clos er !'11 i gn-
~,u~nt y.·it h th{! CorrcrNnis ·t. po~Ac:t:.s.

a. I ~ ~ould prov~kc retaliatory ~ction against

U.S. interes t s in Chile ~nd in teE nat ionally 1
in·:! 1u ding r e t:a 1 !.at i on in t: be OAS •

t. lt would be highly divi~ive in t h(! OAS. (wirJt

the preponde-rat\ce against u.s) and .....,·culd
alienate m~ny of cur Latin Americ~n suppor~ers.

g. S ·~c t-on: =of t'ne opposi t.: ot~ to the AL 1. ende

Governmen t wocld be disi l lusioned by a
failu~e of the move after having been
encQuraged by its initi3tion.

Option 2:

:Begin IlOW to m.a.neU'Ver t.he Ch·i lean Government int,o with-

dra·wing f~om the. OAS and othe:r organs af th~ inter -.American
system (inc1uding t be IDB) J th~ough s uc h tacti~s as bla~ket
and concerted opposition to Chilean positions and p~oposals,
haras smen e, and a s l o-...·-do-w-n or sus pens ion of rnB loans and
OAS technicG 1 a. s.sis ta11ce.

Advantages:

a. Thi s would, i= successful~ remove .;:.. potentia lly

disruptive element from ~he OAS~ ID't, etc.

b~ It would be l~ss vulner~ble ~o criticiso

than the ft"ontal approach of Option l.

Dis adva.n t ag~s :

a. Such tactics are likely to hoam~r~n~ fo~ latk

of sup pore o-r sympathy Erom. oth er OAS metslbers
who wist to avoid driving Chi l e i nto ~dv ersar ~
and extreme positions.
i.H ~ () uvan cage s :

a. )~){~ lu.s ion mi. gh t provo ke even fur the1·

::::-ad ica 1 i~at:ic:n of the Chi le..an G•( Jvez:n-
mG!:rtt (a i... though the premise is that
t:ne. latter wo11.~ ld a lr:ca:jy have been
id~nc ifi,~d as. M.l 3rxis t -LeniLlis t).

b. It night drlv~ Chile toward an even

closer aligtiT.~en t with the Communist
p ::~vte~ 5 (a 1 th cu gh the p rcm:.i s e .a g.a in
is that such .al ignmen t wou:Ld already
ha ve been est~bl~shed) .

c. r t might pr ovo ke ChilE: i n t:o the

E\.rrther ste.p (if r.tot already take.n)
of Cuban- style support for subve,r sive
movements i n certal~ Latin American
countries. thus ~: ais.ing tbe issue
of sanctions (sae S9ction II).
 - ll -

rt
Prob :eru: Possible OAS sane t ions against Chile ( ~ n addition t:.
exclusion or withou t it).

1. Previous cd.se s of t he ::.:pp l ica ti on of OAS ::oancti.ons } t<"ken

under t he Ri.o ·rrea t y" have been tied directly to intc-rrvent ionisrn.:
(.a) r:he app l i c.g t ion o f d iplomatic .a:-~C. partial econom i.·: sa. net ::.ons
a gainst the Trujillo regime in 1960 by the Sixth ~~f, ~hich con-
demlted tho9t r-egime's acts of aggression .and inte.nrent i,on aga i n st
Vene·:z.uel a; (b) the ~pp-i<::<1cion of .aJ;m.s s.an::t ions .ag~in:st Cuba in
1962 by t he Eighth Hl"M, which c it ~ d CoLm-:.t mist bl ock .a rtd Cub ali S\1·: 1-
versive acc: i vitiE:!:S in the Hem i sphere ~ (c } t l:e application o£ ful l
economi~ and d iplomat i c sanct i cns against Cuba in 1964 by the
Ninth NFM .. which condemned t:l:.e Ca stl."'' reg i:oe fo-,::- act s o:E agg"t"e ss j ~n'.:
and in terve:n.tion .:::gairt.st v.en~zue l.a and .authorized the OAS Counc 11
to discon.t:inue these sa net io-ns by t·,.;o- thirds vote when Cuhd ce~ses
to be a t hreat to peace· e:nd ~ec.ur:i.ty c)f tbe Hemisphere. Til~ Twelith
tf}<l.{ in 1 967 conde·mned Cuoo of furth~ r a cts of aggression and i nte r -
vention ~gains t Venezuela~ Bo l ivia and. others, urgE:!d stri~t
application of exis ting sanctions and rccofl'll'\Cnded efforts to
discourage non-member trade, a s ..,.,,ell as coop-et;.ative security
me~ s ur:es.

2.. Several L~tin. American G·Over:nm_ents s€!el.il to be moving toward

the conclusion that CUban i ntervent i onism is no longer a real threat
and the:t: sanctions, i.n any event, have ~ot been effective~

3. l<."h.ile Allende and othe:r members of his gO\•ernment have in

past years given moral support: to ••N.at;i,ona.l tiberat i on Mov~mBnt s••
(e.g. Alle11de e s pat:"t i c'ipation in the T:ri- cont ioental Conferenc:·e ~
Socialist Party s upport for LA50; Allence•s Y.~elcome of escaped
guerrillas from Bolivia) J Allend~ as P·rcsidcnt is currently ma in-
taining that he will r.aspect the prin<:ip le of nonir-tervention and
as yet there are no clear. signs that ~is government is e~g3ged
in s ubversive activities in other cou~tries.
 - 12 -

4. All@ndc will probably attempt tc avoid the i~ter ­

ven . . . ~oni.s t l~bel so •'3.S to rninipize U:e chance s r.=f canfl:-on t:-
at ions with n~ ighbor in.g cm.m.tr ies and t he applic.a t i on of OAS
sanctions. It is possiblQ, hcwever~ that i n tL~e he will
·C::hoose:, or be forced by his aggre.s s Lve: a:ssoci.a t~s ~ to engage
in id.e:nr:if:i.able interventionist act:i.vir:ies.

5. Given th~ so~wnat softer vie~ of Cuban inte r-

ventionism that is grO'W'ing in cet;ca. :f..['J Latin Ameri ca=:1. co.u•1tri(~.s ~·
some of t:hem impDrc..ant, i.t f..s almos.t: certain that the necessary
maj crt"ity of Latin Arneri·c an gov exnrnetc s would floC S'LJpport
s~nct ions .against Chi 1-e uc.:les..s the-re were- .con<::rl1!te: e vidence'
of substantial support of subversive ar1d revolution.:~ 1-y
~ct ivit ies.
OPTIONS

Option 1
. .A.t t ·emp t to ol';"ga ni:ze sup port for sanctions. lig.a ins t Chile
as: soon as tlle:re is reiteration by Allende of his. advocacy
of r~volution in the Hemisphere.

Advantages:

a. This would~ if .achieved, p-ut th~ Allende g,ovQrn-

ment on plain notice that int~rvQntion will n.ot
be tolerated by OAS countries .
b. It: might then induce hiln to de.s ist from furtoor
movas in this direction.

c:. Wh.ethar successful or not.,. it wo~t.1.ld :make .abs-olutely

clear Ol,ll:' h os t il.ity to Ch :U .. e ilnd to potential l ike&
_.minded gove-rnments: in ~he Hemisphere.
d. v..: would be a T,;,Ta:t"ll i. :lg to the Sov ie ts c: hat ...:e ;:; r e
·de-te-:..-min ecl co lLr•it the sccre o£ t.hei!' ac t i.vl ~ies
io the H~misphe re.

e. It: woul cl oblig-e t;he OAS rn<!rnbc r s to .stand up ."!nd

be COUilted •

..;. . Advo cacy Cl f rc-volu t ion, wi tl1ouc co:le re ... e evidence

of actual int er~en tion i st activities, would be
most un: ikel~ to· engender s uf ficient s upport
( t:r,..T,o- thirds of Rio 'r xeat:y signato ries) fc::.:r: &.a:'tc t i ons ,

b ., Such a mQ'l.:e by t he U•.S. wnuld be widel}' and pu.b l i.cl y

interpr~tcd as s; premat •,mr e ove~rcact ion.

c. It;: 'C!1ould be· uscr:d by .AllG:nd e to be!lp con sol idatc

hi:s governr.Je [tt: r s pasitiml i n Chile.

d. It might provoke further yaoicali~at ion o f the

Chi lean Gov erl.1.E"'2: r:. t and E:1!V~n c 1 os e 't" a 1. igruncn t with
the: Ccnanu:nist pm-.·e~s.

te.. l t woul d provoke retaliatory .actioi:"J a:gci.i.nst U. S.

interest s in Chile and internationally, including
retaliation in the OAS .

f4 It would be highly divisi.ve i n the OAS (with the:

prepondera ne-e .a ga .i ns t us ) and would al icna t e
many of o11.rt:' L~tin Amel:'ican s uppo rt-e-rs..

g. Sec tors of the opposi t iC~n to the Allend.e gcn.., t;!rn-

ment: would be disil l usioned by a f.ll i lur~ of th~
1110Ve after h.avio,g been enc ou:-aged by its initi·
at ion.
 • t i
• : . • ~ ii t•'-' • .
; L • " Co .• •q. · l 1
~ . , .. ~u •, . 0

~CRETJ,Notl. J.JS b·· ~ ·

- 0 0

Opt i on 2.

P'na s e 1 0 >1a k e n!) rraove in c h~ OAS now ou t ( a) cont i n1.:~

to dc c.: ·...m~ent fu'rther deve l op;1:ents in Al l er.de r s att i t u d e
tOWcll:d r•.a~:~jcd s t : :." ugglc" i.n other co unt des ~ oespec ie~ l :v any
cL ear ev id e nce of acl r.,;.al i nt.:ervent ionist .;~.cth• ities ~ beyond
propagan da, tha t wou l d justify the icpasi tion of s anc t ions;
(b) make clear t o r;othel.· s e1ec[ eu Oi\S ,.,embe rs that v.:c o3rc
,.me ch i ng che sit: u.at :..Dl':l carafull Y' e nd sugge.st s ird l at;" att en.rt ;f. on.
by t h e1m, with pr ·ovisioo for exchanges o f hard i.n f onrra ticn;
and ( c) cnnti.m.1e t o t::ombat :: he r elaxing at:tit ude t:owa ~d the
ssscci8 c~ d q ~es ti on of Cuban activ it i e s .

Aclvan.t.ol ;i!!,~~:

<1 + We would be in h~rmony Nit h t h ::: actjt udes o f

mos t: c thor member st~~es. ch us Dl.<l.int a ining
cohesion in the OAS.
b. We woul d avoid t he ~ is~dv a.n.t: ag.es of Option 1 .

c. We would project a favorable image of r e.stea int ,

d. ~·ewcul d reta i n. thC! abili t y to rn(:;.-.,e co concre:te

mea SL'..res i: ~nd whet"! call~d fo r ( i. e. s~nc t i or..s •
to re.St:t;"a i n .actual interventi onist: .acts);. hav i ng
meanwhile ac cumul sted th~ nece ssary ~vidence .

e. An alert st:ance on t:he part of th 12 U.S. and

othet-s: c ould senre as a rest rain t on Allende' s
moving t owa rd actu.a1 j nc:erve:ntionis t ac t: s ~
Dis;::idyall.t tage:

.a . Ou~ :position Dlight: be interpre t e:d <ts shoo;.;ing

we aknes s or undue tol e ra ;tce fc't' r ,e vulut i on a:r.·y
pt"opaganda.
 i I .. : t: 4 I i-' ! 1

S~CHl·:t ~ti. 9fJ J~~~_.r· j·· j ,

.. • -: '- I I 1 : I J •' !

- lS -

Phase 2 Jf a pers uasive bc~ y of evid enc e

of .a ctua l in l;e r..rej~ t ianis~ .acci.vities b~yond rr-c:pa gandx s houl.d
develop in t h £a f•.Jt u~c and i. f .RS. a r esult then~ is a -.;-eelson .~ bl e
p r-ospQC t of t:•~·o - thi:L-ds :su p poT::, rnov.Q i n c oncert wi.t h o t hc-t-
Ri.o Tr ea cy signatori~s t o apply sanct ions, prefe~.ab l y a n~
gra duated ba si s i n accor da nce with the se~iousn es s o f the
in 1: e~.,.reationis t a.:: t iv it ic s .

Adv antag.a s:

The measures called fol."" woul d be cJ..earlv • J

w:;:~ t·rar.ted by t: he tnte rv-en t ion i.st act i·...ri.ties

tney .:t "I:"e des i.gr1e·t.l t o t' r1S t rain .find they -.;..,TQ\..r l d
oe g 3: Gl d. ue t ed t; 0 Eit: t he t eve 1 0 f s UC" h ~ c. t i v it ie s •

ThQy would t hu s h~ve of a r easonably good ch~nce

winning the neces sa.ry t w-o- thirds Jt'l~j ot'i t y of Rio
treaty ai gnat~ries ~

The- gr~ du.a t ~d application of sane t;i,or"Js could

serve as a s t-r-:;;n:'.lg det"-'!r-r~nt to sn inc.re.asing
l12v el of inte:rventionism.

d. St:ch sanctions mi_ght induce Allende co .abandon

i mtte:J.-v ~nt io!l.1 isl a-ctivities,

e. The f.a c~cr of j oint i n;i.tia.tive wo1.~ld red1..1ce

son~~r;..1h.a.t the .asp~ct o f a 1..!. S , -Cb:i,le cct'Lfroncat i o:n .

f. Such action would. minimiz-e the split in t h e OAS

~nd the a l ien.at ion 'Of su pport for the 0. S. t:hat
"". vould result ft<ou pr-en1:J.t""tl :re a c.t: ion.

g:. !t would place- th(!- burden. of confrontation on

aggr essive Chile .~Ht d t'l:o t o~ the forb•?aring U. S.

-h. C<ll~c.e--rc ed .act ion by OAS c ou.-t t-r;ie s might memb~(

en~ourag.c domest i c OiJ>9CS ition to AllGndem:s
reg ime.
 S~G~ET/NODIS. ·
.
... .
' - 16 &

Disadv~ntag,c-s:

.a. llespi tl:! the just i fi r..:at ion, t'h ~re might sc: i. ll
be con.s i der.able. t:"e·s ista':lce a..'!long member
co\.mt ries to s :ln ct ions ~ gi,;ert the· pre sent
slc.:!p t icis:u ,o f some ove!:' the continuat :.on of
sanctions ~gains Cub~ .

b. Sanctions mi~ht provoke even further radical-

i z.a r.: ion of the Chile a~ Cove rruM at ( a.l th O\.lgh
.by that c: i.me it may a l r-l:!ady h~ve he.en t hor oughly
-r.adical ize.d) ,

c, . l"hey might d~ive Ch:.le. toYO"~'t'd an even closer

slignroent with the Comm~~ist powers (altboug~
again such .r=.n a li.gnne.nt m<3y by then h~ve
e~lready 'b-een .achie'\•ed. )
 · S E.CR t T ft,' QPI S
L • . . "/; · • •t .
... . ..
.
: :.. j 17·. _;
'

III

Probl ert~ : Possible Cl-:. ilean init: i &t ivc t ·O e nd Of, S

i so 1 a ~i o~ of Cuba.

Cort s:i d e t:".at ion.s:

1. Al l e :nce ' .s go·J~rnmt':!nt .ac ted ou ts ide the OAS f rat11E-

work in re- .e st.:i:hl i. st-d ng diplorMtic , economic an d ot he r
bilat eral rel at ions with Cuba (thereby violat i ng 8 bind i~g
cb lisation unde 't:' t ne Ri Q Treaty) and. while i t: i nfot:ma lly
notifi e d member g()vCt't'L"llCi'lts ind i v ic3u.:i1l -v cJ c. th i"s .action ?
it did no t notify t he OAS peJ: ~-

2. It is obvio us that the Alleod e gov ~r~men t NCuld

lik~ t:o see the OAS t-erminate the 1962 ~:x:c h 1si ol't of Cubi3
( Eigh th ¥.tFM) and the 19 64 5 anctions agel. ins t C\.Jba (Ni nth MFH) ,
but Chile r 5 OAS Representative ho;:~s t ·o l d us tf,e Allend e
c
govern.men t oes no·t i nt e.nd to :raise the rna t ter o£ r e laxing
.sanct1.ons against Cuba in the Ol\S an·d the .Allende govet;r.m~t'lt
has not taken any . initiative with respect t o endi ng the
ex:c l w:; i.otl of Cast. ro 1 s goverilii:.ent= from the OAS .

3. On balance. ~ it se~s unlikely t::ha.t the AllEn de

govcr~en~ wtll itself raise th ~sc issues in the OAS fo r
the ti::r.-c being a t le.ast ,. becausa i t would pt'es\lli.ab ly Yfish
to avoid a confront~ t ion wi th other member s ov~ ~ such an
init i ative in the. i nterests of e s tablishing. its ·c :r:-edentia.l 5
aA an acceptAble menb er of the inter-America.n cC~l!IID.unit'J and
beca\'! S~ there a-re other ••respect.a.ble: • '!!i1.€'Sbers T,....ho may be
1

ready t o do the job.

4. TherQfore, if thes~ oatters are -raised in the OAS,

it is more l ike: ly that t he ini t i .ati.ve wi 11 come from some
otbe~ cou ntry or countr i es as a res ult Qf the sounings
nO\o! t.ak i n.g pla.cc with respect to possible OAS con..siderat:i.on
of the Cuba. guestionj and that Chile wo"lmld sic~ply take side $
with those advoce t t ng change,

- --- -~ --- ·- 5 ·. ~f;- 'however ,- -chile finds i.tte1:f in an -open

advers3ry relationship with the U.S and cartain othet:
 ~ .
. SE_CRF.:f /NmH S

- 18 -

members in t he OAS or if othe r pot~ ntial i nit iators of a

Tilove on Cubs bac k .away , t he .o\llende· gov~rnment might: fi nd
:i t u seful t [) place this divisive issue betot;"e roe:rn h2r.s ~
thus en~~r r~ss ing the U.S. effor t s to hold the line on
Cu ba..

OPTlONS

(t-iOTE: These o ptions are advan.c~d in t he fr.olmework

of exi s t. i ng po 1 i~y cha. t c a U.s f or 'P re\P'C:t"' t i t1g any
c hF-nge in the OAS policy towar d C~ba a nd corest elling,
if poss ! ble: ~ fom...a.l discussion of th G' Cuban. case
in the OAS . Therefore , in the cont::e;.c:t of tb is p~p·er)
the r e i s no addTes.s to t.he e o[1c l2"ivable. op tion [~f
rn.aneuv-e ring Ch i le: into L~.king an initLlC ive O·Ll Cut.a
in the OAS i.n the hope t hat its sp·:m:s.orsh i.p ·would
reduce s upp o~t for t h~ move .)

Q;et ion 1~

Prepare t he groundwo-rk now , in c:art s.-:Jlt.a.tion with other

OAt. P'I~'1Dbcrs, f or conce:rted act: ion to block any pos .s il: le: move
by Chile in. t he OAS to terminate OAS: s~ nct ~on. s .ag.aiost
and exclusion of ~ba.

Advan t-s ge.s :

a. We WO"'J ld be: p'r e-pa.red for this c ont i ngency .

b. This. would b~ co~sistent with out general

policy o f preventing OAS reconsideTation of
the Cuba ques~ion gnd ~~u ld r£inforce our
efforts to dissuade othe rs from in troduc ing
the i.ssue .

Pis advantage:

a... TI1e Chileans ~ould p-r obably get win(j o f

o~r effoxts and might thus be led to t ake t he
.~ _ . _v~·:t:.y _.action we are t rytng t: o prevc-n t .
1
~
r
.• ~"
. ~ ( , .: \ :. :11 I '
SECR'n/NODrS
 ~0-
Op t io n 2~
r

T~'ke .;:Jdvar'lt agc of ~h€ All~nd e gov·er-nmcm,t; s .app:'lr •:::J"'I t

pr~ scnt intention no t t o raise che Cuba question i n th e
OAS ~nd avoid adversa1:y att:i.tt:des that might gi.ve it
~n inc Q~tive to introdu~c this difficult quest i o~.

Advantage~

a. We wot:: ld probably .acn:.eve: out' obj ect i vE

o.f k eeping Chile f r ·om r- a is i.ng the Cuba
question in the OAS, at least i.n t he .shot:'t
run.

e., We wou ld p:rot:ably not; deter Chile f1· 001

introducing the Cuban i ssue over t irne .

b. I n our effort to avoid pt'o;.rokin.g ·chile i nto

introducing the Cuba quesciony we would be
p lac Lng sro.e d eg'te e: of con~ t 't" a i rt t on our
ability to oppose DthQr Chilean actions in
t.h e OAS or e Is ewhe r·e .

c. s~ch a pa ssiv~ attitude mlght be i~terpretcd

as weak.ne s s or lac k o f co nee rn .

.QetiOitl 3 ~

D~al wit h the p·roblem of possible OAS consideration

or reassessment of the Cuba q~est ion on its ~Nn m~its and
d:i.vor~eit insofar as pos sible from the Chilean problem~
whethe:r or not: it is: Cl-l i lt1 that at tempts to intt'Odl.JC:e ~he:
matt:e"t" ,

Adva.nta~es ~

a. We wculd t hus recogni. ~e the fact that, alt hough

it is Chi.le: • s re.sumpt ion' o£ ::,-elations with Cub .a
t'hat has p-::-ovoked the pres ent fluJ.-ry cf re-
• - -- - ~ a.s .ee:;;smc:nt and co nsult.ation:s t th@ problem is
n~ one of ac:r o:ss-the - board attitudes toward
GAS Cuba policy ,
p~l fW~Cl[l[rt
.JntltA~U
 c • <""·!! f . ...,. -
• -..-r'dv s~LL
s&cRtri/r
.. • I~ ~~
. 'l·
, • =- '.)'1{1" i ~ V t H
- (!' :.

b. oc :"lt!T" memo·er countr i ~ ~ w:ruld :r e : ogni 2.e that.

~e ~ere dealing wi th the Cuba prob l em on its
rne:dts, 'Wi,t:hout h~v : ng our .c.Cl i t.udes: to";.;ar.J .a:
possible reconsideration of OAS Cuba policy
colored by m..l!r .flnt:.ip.athy tov...·a1·d Chile.

c. we would t hus be. in .51 someT...·hat bet t el' pos i.tion

to pursue our policy of diseourag i ng other
ma:m.:"Je:~; s from su~u~.est in.g th;:,;: t the OAS reop~u
the Cuba ques~ion.

d. We would be free of const~4ints on our ability

to oppose other Chil~ar. actiofts in cteOAS o~
e lsawhe:re..

a. It tn.ay seem somewhat artir.~.;i.al t c sepa·t:"atc

these two questions .

b. We might lose the chance of capita izing on

sus pic ion of Chile 1 s motivEs to provide an
ext~a ingredient of suppo rt fQr o~r general
polf.cy on Cuba.

\1~
 . . 21 -
lV.

Problem: Chile a n gener c:l t.a·:::"Cics. in chc OAS.

Considerations:

l~ As stc1ted. in Section I, .Allei'ldl2 has ~nno•.1nce.d his

intl2t"ltion of keeping Ch ile. in t .he C·AS .

2. I n the Cuba:1 cc:=se > Cd.$ t,.;o 1 :=: GoveJ:nmE;!nt. b~tween its.
accessi<m in January 1959 and its exc ·us ion from the OAS in
Ja:nuary 1962 parti cipated in the OAS in an inc re..:~sing,ly di s ·
nlp t i ve marm.e r ~ u:s ing i t -5 s: a prop a gat"! da :forTh1l. t.o ac voc.a ·t e.
Castro's syste~ and to att~ck t he U~ S. and certai~ other
lllember countries, and introducing divisive issues whe.n
opportunities a-ros~. llnti l C.::!.~ t::t:o 1 s :re.p1;e.sen ta ti 1J'e,~ "''ere.
vir tually excluded frcm the lAD~ in April 1961, they had
foll.owed obs true tionis t ·tac: t.ics. t..""i th respect to. hemispheric
defense against Co:mmuE::tism and ha.d e.ngaged in polemic;: s .agai'ns t
allegations of Cuban support. of gu.e.1.-ri llas i'n ·c ertain countri~s.

3. Many Latin Americ-an govern."l''ent.s and their OAS repr.e-

s entatives, wl:li le p:rivate:ly expras:sing t:h@:i't' awn <::r:rnc.ern,
have u't'g~d us to be as forb~ring as ~o5sible with respect
to Chile's pB;rti cipation. :in t:.h.e: in t.er-A.'Tie.rican system, .and to
· avoid .c:!:dver:s.a:ry t"elat:ionship.s chat 1nigh t d rive Chile. evE!:n
further along the :r-oad t.o align...-·ne.nt. ,...t.r;:h the USSR and Cuba~

4.. It ts like 1 y tlta t Alle:L"'de: 1 s gove:rt'lm.en t 1 .a. t. le.a s t a t

the outs~t, will be more subtle in its u::ctics than CUba was
and will attecnpt. to aYoid t'he i.mag~ of the saboteUir of the
OAS~ bearing in mind Chile 1 s need for frie~ds among tbe some
Latin Americau m~ber coun tries and fo~ allies in La~in
Americ~n movements such as CECLA .

.5. Bence the Al~ende govertm~ent is more likely to purSl..IE.

limes t:h.a.-t will l::ry to stay short of a disruptivE:! confronta-
tion but -wi 11 be .an in tens i fic.a.th)n and a.'t::lpl"' fica t i on o£ pt"e-
Allende Cbi l~a:t'l. policy. such as:
 (a) The s tl"Cl'l~ch e n.in g of r;ure.ly U1 t .L n Americ~n
u::-ganiz.a-::.ions (e.g , CECI..A) to ~ the uetri:oen t o f the OA S .

(b) Efforts a t weaken i ng th e political .a~tr ~ but~s

of the OAS, ~ .g . by strictly lirr.i ti ng ~he power s o f the
P et"ltlsnenc. Counci l,. <:~ ppos ing a s t:x:-ong Set::ret..ary General
and .a ce-ntra liz.ed S ecretarf..at! e l i mina ting th 12 Sp e c ) a l
Consultc: t. i.ve COiuiJit:t ee. on Security, dil.udn.g OAS action
against Lcrr orism ~ nd kidnapping, ecc.

(c) Advac.acy of perman ent obse rvers f rom a ll

cout-. t;·d .es including. '~soci..a_i.:st" cot..Jntrie:s .and t h e.
cmp lO)fmG:n t {>f "socialis t" ,cou:n~ry technic :.ans i11 OAS
a ssi.s t a:r.c e pro.gra•rs .

(d) Advo~a~y of UN prLmacy i~ p e~c~keep in g .

6.
While Chile will probab ly 1:.ry to avoid .a. cor:f-ron tation.
in advocstin8 chc forego i ng positions, it i s l i kely to C.ave
even less :supp o;~;t for t hern frou1 othe:r rnembers tha11. it h.as had
heretofore beca.usc of gr~ater sus. pic. ion of Allende • s mo ti. VI!S.

7. If sophis·t:icated t.actic..s rlo not (::rosper .and cease

to serve: Chi 1 e, s i.nte:-es t, or if Allende c s g.overrun:-cat finds
itself i n an adversary p o s ition i n the ~\S and elsewhere in
the hcn~ispher e, it might t.hen resort t o mo-:x:-e aggr essive and
disr-uptive ~ac tics it"L the. Cuban s tyle.

8, If tl-. e U. S • s hcu ld move towa_rd taking o v.er t measures

aga.inst: Chile i.n the ecpnomic and f inan-cia l fields. s:u<:.h
aggr@ssiv~ Chi lean ta-ctics ere likely to be in tensified and
Chile. as a. conseQuence, would probably cou-nterac t by .accusa-
tions of economic aggress i o~J citing Article 19 of the OAS
Charter.

OPTIONS

Con vi nc e o the::- rn ember go·..r€ r1'tme.n r;: s no";.¥ tlota t ct:i 1 e ~ s a c t i on.s
-~n the OAS wil l s~rve t o weaken and 9isrup t ~he O~ganization
r-md p(:n · s uad~ t n Ct71 of ch ~ need roT -2.:3r l y cone eort~d act ion t :J
:rcn:3 c :- Ch { l c·' s p~r t: i.e i ;?:rt t ion in.<: f fee tl..tc. l .

Advii.nta~e :s :

a . "f h i s h'O t.Jld 'c l"d.ow cl~a~- a t•d early 1 in€ s (:-at
isst•e S <:~ nd mir,h l 1~ c~derc u r-
1
C':lile s eff o r t s
fr;:,m t h e ou t 5 (~ t.

b. 'Z' h is '-''Ould clerJOI1~ t:rar e U . S_ cfn1c e "t.-n ov ~ r the

e~ t stence of another Ma rx~st
s t ate in the
hemi spher e and ovec i t s acti ons i~ t he OAS .

Dis s dv.an ce~QS ~

---~---=,.____

.=t, Otb£"r rr:embP.J:S ·..:ou l d b e reh.: c cd n t to dT a·..; s.uch

clea r battle lin es against Ch i le) e-spe:ci~lLy
a t t h ~ ::; e:~r 1;- stage l wi t1;-. the t:" esu l c t hat ,;..;~e
migh t f ind outE~ lve s more a l one th~ n C~i lc .

b. We would project an Ln<:~ge of ovQrreAction .

c. 'We would g.ive th e imp ressio n of taking, posit: i ons

to frust r~tc Chilean initiativ~s ra th eE t han
addressing the merit~ of e~ch i ssue.

d. Other lClerobers :'io.TOL ld ~.e~ li t le re~son for not

.1ppr ocching is s ues or1 t he i r indi vid !..1al tr..e:d .t s.

e. s~ch an e a~ly con fron~a tion wit h Chile i~ t~a

Ol\S t..:ould le(:ld i t to !il\Ore .aggress ive and dis -
r up t ive t ~ ctics.

Option 2

Phase. L If AllE:::nde • s gove1·nrn-cnt: i nit ial ::..y purs ues a

re1 o. ': i \}e l y re s tt"".airH,"!cl po :.ic; y of b u i Ldi ng on a nd ..:~mp l ify-ing
exi s ting 01i le a~ pol~cy i n t he QAS, coun te~ such moves on a
cas~ - by -c.as c~ b as is~ on t he m.f!rits or e.ach ~ avoic.lin ~ a. t ti tudes
of <) Ut oma tic Opposition bur; at t.':le same t i t:Le aJ.ert i rig -:
6 t:he t' mC!:L""" her s to Lt.a j or shif ts i .n Chi lea n p o lic}' and
tacc i c s so ~s to be a hl c t a ~~vc, in conccYt wi th other
m~nb e~s to t hwa~c C~i le2n ac:ions .

e. Our atti~udes and tactics wo~ld be in h a~acoy

wi.th mo:s c other rr.embers.

b. We would be more l i ke ly t o r11c ~i.ve ..a:\.!ppot-t

...../;, (::n ::1e e rj e o.
c. we w~uld d~prive Chi l e of t he opportunity to
~ake emocional appeals against frontal U.S .
oppos i,t io11.

d, we \o.,Ould hopE:!:fu lly avoid that

c~nf:ront.at:ions
wo~ld l e ad Chil e to ~ore a ggressiva and dis-
D J [p't i v P. ::::act ic s .

e. We wo\J l d be credited by f e 11 OV.? til-embers , and

publicly! for a~ting with pois~ and restraint .

. Di s sdv.a:nta.g-es:

a. Our position might be i nterpreced as a sign of

undue tol~.n.arll ccC.t woa.akn.~ss or ut\CC)ncern o,,~t:
the p~e ser.ce of a Marxist gcve ~~ent in the OAS.

b. Chi l ·e roi ght t:'hv.s 'be in a oo.z:e favorable pos i ·-

t ion to influeace othc ~ ·members.

Fh.a.s~ 2. If Chile should t:urn to -:nore- disruptive and

aggressive tactics~ conceTt with other members to rend~~
Ch i l~an part ic ipation ineffe~tual.

Advant~ge-s:

.a. Our re:.a.ct ion ~o.uld be commensur-ate with t he

problem to b e confron t~d.

b. we -...rould,. under the: cit;ctrm$t.(l.nces • nave wide

s.upport from other ulembers .
 SECRET/NODIS

DNClASf'-orrU]['i
ln..L
c::. C'h i l !! \-!ould be ef~ec t ~ 'v·e: l:r
i s o1!.at:e.J in th c-
Q..t..S and mi g::-tr then owi thcr.a'N froLil it .

Disadvantages :

a. Chile•s iso l aticn and withdrawal might provoke

i'u·r th e r ra-dic.a 1iza. tion o£ the Chi le:ai'Ii Go'.rern-
men t .a Pd even c los e 1: sl i g :\.,:en t Tf'i' i th c;he
Con:munist powers (althoug:, S'l.l<;h ra.d i ca li z..q t:..::.n
and a l igniT1.e.n 1: may already ha vc occ~rred by that
time:) .
 v.
1'1.-ob 1~: Po.ss i ble Soviet r1~i li t.ary t.:Jc i li ties in Ch i le

I f Soviet militat:y fee i l i t.ies affec l Utg hern ~ .sphP-r i c

secu rity ·were: t o be es tab 1 ts.hed in Chi lc , che OAS ~ "'·h i le
not t:h41 focal poin c of our actions_, -wou l d nevertheless pl~y
a n. iJopor t-an r:. role .

In the. .above even ~uc.ltty 1 we judge Soviet: Cl.nd Chi l e an

act::ons r,yould be viewed with such seriousness in the
hem i sphere as t:o assure in al l prohc:.h j, 1.i r:.y a ~o- thir-ds
rnaj or-i. ty for the acl.op ti.on of a~propriate me.asurcs c~1J'[)ensu ­
rate "'ith the threat.

Just .as in thE:! 1962 Cuban rnissi.le cTisis,. in ~·hich

Uni t.ed Su~:as action received ur.anirnous suppor-t of the
OAS mC'ttli>er stat:es, the OAS Council, under authority of the
Rio T-reaty, could p:t:ovl.de. useful legal justi fication ~nd
political support _for our sctiQ~s.
 l;. '•''
.~ ..
St.""C RB.T (NOD IS ~

Leg3l Impl i c8tion s of Chilet ~ T~~de ~i th

Sc·mrmm i s t C'.Junr t" ie .s

1:. Pe rt iner.t Agree;r1e n t .s a nd Legi slation

A. OAS Decision o£ 1964 .·

Th~ Ninth n.~s Meeting of Fore2·ign ~Unisters ( l ~ 6la) ,
acting as Orga;n of Consultation u:oder the: Inte:r-Arceri ca~
Treaty o f Rec lp:rocal Assistance~ adopted ce:rt.ain tneasu-:---?.: s
aga ir1s t Cu':n:~ including the suspension of -

diplomat i.e .:and con.sul{:lr relations;

"t1:ade~
whether direct o-:- indirect, wit h Cuba~
except in foodstuffs, t~1e-dic in.e s and medical ~qui.p ­
lllent that may be sent to Cuba for· human ~ ea_r i an
rea sons ; tl and
11
all sea tr.an.spc·1;t:at i on betW"e.ert th~ ir co:.1ntrie :s
.a:uo.1 Cu1::...:. :t e:xcept for .t>Hch transpot'tation as mt~y
be :nec11:ssary .for -rea SOl'LS of a human ita '~'"ian na.f.:ui;"e."

These ~asure s are binding ~nder the Rio ?act, but

the re are no specific procedur~s or sanct iQns for their
en£orcement ~ Mex ·co has 11ot accepted these- ~as •.Ires and
-~ s nnt· comply wi tt then.

B. U.S. Lesislation

United Stat;es legislation provides certain sanctions

ag.alnst thf.rd-c:ountry trade wi th G\.lb<l ~nd Nort!1 Vietnam .

1. llndet: Secti[)l'~ l03(d) (3) of th~ Agr!,cultu-r:-a1

Trade: De\o•elopment a n d As$istancc Act of 195lt-
(ATDA)~ Chile would becom~ ineligibl e for
fu.rtl\e-~ PL 480 cocuncdity s:.sles in the .event

~ ---. ..
-- - .-- ~ ~
>
..... - - .. --.. - .. _, .. -r• "' - - . ... ., ............... _ ..,._ - --- - ..
 s\~C !{!IT/N JD IS '
..
2

it shoul d r esmr~ trade "'it h Cub~ by mak ing gov e1:n ~

~ Sd.lcs t o that country. The Preside n t it'~f 1
how~ver ~ authorize PL 4.!30 s ale s in ti he 'E.i ~ t i onal
int e t:'~St if the $d. l es to Cuba ~:re l i mt ted to
m~dical supplies or nQn -strategi c f.! g r icu l t.: ural
mate~ ial s or food c ~~oditi~s .

2. I f Ch i le .s hould make govern:ne nt s8le s t o Nort h

Vietnam, or if it s hou d pe:t.LTlit sh·iP s cr a ire raft
of Chilean reg i.s t:ry to tr.a.n:::poet equ ip:neu.t ,
. materials O=:' CO::l-:J.lLOdities to or from .C t)b~or
North Vietnam:t Chile w·ould be preclud e d £r.om

i receiving ~ny new l oans or other a s s i stance as well

a s further PL 480 sales. (Sections 620 (a)(J) and
(n) , FAA Section 103 (d) (J)., ATDA.) '! 'be Pres ic ~nt

Ii
may author i ze ass ist.flnc.e l..md~r th.e: FA.~,. hcrweve1:- ,
if he determines that suc;:h a.uthoriza.t i on is
i~po~tant to the sacurity of the United States ~
. (Section 614l FAA.)

3.. AI though there is no provision of the F<rreign

~
Assistance Act applicable to Chilean Gove~nmen t·
sa.les to Cuba, the 1970 Foreign Assist~nc~ ~nd
Re l ated App't'op l;"i<l t ions Act TNou1 d proh ib it
furnishing assistance t c Ch il£! in the event Qf
GOC :sales t o Cuba. or to North Vi{!tnac:n of 11 Sa t t l e
Act,. i tett~s or other mater lals of primary st ra:tegi.c
signific~nce, incl uding petroleum products.
(Sect ions Hl7 {a) and l l6- -these provisions
probabl:·· will act he carri·e d over i n tl~e· new
appt:opriat ions legislat:iort.) Tl\e President may
waive this limit.ati o.n if he deetas as s istance to
be importan~ to the sec~~ity of the United States,
(Secti on 6L4 j F~A.)

6. The only pertinent sta.tutory prov1sLon c: hat woul d

preclude the disbursemen t of fund.s oblige~ted undc:r
AID loans i s Ser-:t ion 103 (b) of tbe Mut L.lal D~ fens e

'
 SECR~""T / N::m.rs _.
, :.. I' .
:' ~
i. , ••,.II•1 ~ .. ~~ - .
!
• 'l . . ~ ~ !. ; ·. ':I ~ ~ ~ ':i ~
• •
-
• -'• \ I ~~. J•] ._ ...
•
p
• I

As s~st R nce Con trol Ac t {Ba t cl e Act)_ This

sect io:t reqt: i res t h e teim ina t i on of ass i.stanc~ to
any na ti on whieb knowi-ngly perni. t .s t h e ship-men t
of arms ~ nd o t her designated St ~atcgic R~ t arials
to commnn ist areas t ha:t: t hreat en U.S. secu~ity.
Again, t he r -.:es ident nta)' author iZ·Q a i d under t:he
FAA if he dce rns such authori.zation ir~ rpot;tant t a
the sc c:\J1;ity of the BT S. (Sect ion 614 , PJA.A .)

S.. 'the Battl e At t prov i s ions re lat: i :1g ·ro s t r a.teg ic

iMt<2-rials, and simila.:~:.- provisions o t the Expo:rt-
Im~ort Bank Act prohibit i ng t he extension of
c redits to ~my r.at J.,on rha t f urrdshes by di r,ec;:t
governm~ntal .act io:-. good s, supp l ics, military
ass ~, st an.c~ or advi..s-crs t o ~ :na t i on e;~.g~g:~d in
a rmc:d c on f 1 i ·c t ·...:it: h t he U. S·. · · { 5 c c t ion 3) , .::~ re the
sole statutDry s~nctions appl ic able to Chilean
tra d~ with communist coun t~ies other tha n Cuha
and North Vietnam. ·

6 r In the ev~nl: Chile shou1.1 provide items of

e ::onomi'C ~ s .sis tan ~e t: o t be pre- s ant gove rnmeH't t ¢ E
0~Jba, furthe l:" assist ance u::.l cle-:- the ~"'A.A. "W'O l!ld be
ptohtbi te~ unless t he Ptesident find~ th ~ t such
a id is in the nat i onal int e rest. (S~ction 620(a)
{l)j FM.)

7. Ft.JJ;-ther assistance unde:r- the FAA or any oth~r a ct

i.s prohibited to any coun try 1.o1hich fut>ni shes
equipmen::-. materia l s or <:o['lmodit ies to North
ViQtnam 6~ long ~s tbac regime supports h ost ilities
in South Vietn~~ . (Section 620(n) FAA+ ) The
Pres i dent ~Y waive this restric t ion i f he
dctfrt'iui nes that: the a ss ist.ance is important t:o
the security of tht! U . S ~ (S<2c t i on 614 1 FAA.)

\.

•
 ,..
- 4 -

Apart from Batt ~ e A=t pro~isions . c unc~~n i ng str~tag ~ c

materL~l.s! there .a:r.fl no st.acutory sanctions llg='\inst pciv.at:~
tra-de bc t t.;een Chile at'ld any co1mlitmist: coun t :~.;;. There in;e no
U.. S. s t~tutory sanctions ~pplicable to pur~h~ses by Chile
from .any C OTlll!lUI1:. st c oun c:ry .

II. Jmplica t 1ons and Options

l"he primar)..--and P'robsbl;r early- - irnpl ica tion of .a

res:umpt ion of Ch:Uea:n trade witl:. Cuba, North Xorea ot ot :1 e:r
IDll'Ol Unis t countries would be pub) i ·C. .1nd Congres s iom'l l p-res::a.t"!"C!
up on t he Administration to (:::xplti in its i n'!: entions' ·~;oo.ncr:trning
the pert i.nent leg i s l a tb.•e :s.anct ic)ns. ~Tf"lilc ve wot.:.ld oot
exf~ect che public to kno~ muc h about the p"t"ec is·e leg:Lslat ion
i n quest: ion! ~'e could antic-ipate sb.at"p qu.~rics 1 even from the
uninform~<i] along the line~ of n'k'lhat · is- ~tne U.S. going co do
ab o ut this trade 1' ot:' ' 1why do ·..aoe .give aid to a Marxist count'!:"}'
which helps crur enemies,'' or, conversely, Hare '9o."'e going to
over~~~ct in the face of a relatively unimport~nt threat to
our intercst:s?"
- -
The nature .and stt;eng.th of such press'.ll:"E!S \\ilould , of
cc.u:x;-se, be c-ondit ic;med by t he n8t-vre_ of th~ trade. 1 f the
trJide consisted of foodstuffs <:rr medical supplies. to Cuba~
for examp l e:~~ the reaction W'ould probably be less signifh:ant
thao if the trade cons:.stcd of strategic mat~ri:s~ls to North
Vi~tnam or North Kore~.

The in3'tl(~diate . op,a ration.al decision with w.rhich the

Administt:"ation would ~e face:P would bQ ~·hether--and in which
in st.ances -~to a pply tl"'Q waiver of the sancti on . "lmpo:rt<tn-ce
to the U.S. national se~urity 11 is the cri teJ:"ion on \Qhich
such a waiv·er would have to be base<!. Any judgments o:r. c:be
applicab i lity of this criterion would n~cessarily represent
an amalgam of ~actors~ inclcding such cons id~ ~ati ons as t he
react ion of Chile and othet:" Latin /l.merican CO\lntries if the
s ane t ion were to be applied a nd the reac ti<)n cf other nati-ons
o~tslde the Hemisphere .
.
 - 5 -

The gr oss ortions avail.ablC! to the i\drn i r:.is:rat ion rE:!lt:rting

directly t;o the cited s a net ions al;'e simple 1 i.e • ., t o apply the
sar'l.ction in each. pe1:t inent c.a.s e or wa~v e it. In addressing
this qlJI!stio n,. .....,~ wot.Jld hcve t o detemine the relacionship of
om: acti c)n to two f undernertr::a :L obj c-ct:ive:s of U. s. policy toward
Ch il-e~ i . e. 1 (1) str,et:gthening :;he posi ti<"'tl of anti-communist
force~ w ·thin Chile, ei.nd ( 2) persu..<Jding or preve nting the
J\ :. l en d~ gO"~.'errunen t from e ff~ct i ve ly disrup t :iug U. S. ref:V=. tions
w :t c:1) oth er com1tries o f the Hemi:sphere and the im:er-Americc:m
sys tem ~tself .

A pcre inent: element in t he cons ..:.d ers ti on of I: he fund a-

men:lt.al dec i s ion is t:he fact t h at the sane t ions i n question
.arc re l ativel y mil d. They iavol ve dec laring Ch.i" e inel $..gible
fer r.er... PL £.80 sales .a nd prec l ud i..ng Chile- from fu1;the r e-conomic
T

assistance . The d is bursement of pres~1t lo~~s ~ould not be

.affectQ:d e x~ept i n. the un li.k~ly event that Chi le should provi C.e
Ba tt 1 e Ac. t -i.t e.lllfl to eommun i s t c: o un tries (coppe r :is not s ue h
an i t em)+ ·

The s(! s~nctions- are not a s severe or as · bro,a d as those

prov id.ed under U.S. 1egislat i.C'l1 not di re ctly related to tbe
quest i on of Chilean tre. de "-'i tb conununis t countries. Fo t:
exar11ple ~ tl:c Exp ort Ce·ntrol Act o f 1949 and t;he Trading wic b
the ~'~Y Act (1917) provide f a r g1:eate~ coercive capabili ty .
These: and oth er sanctions that might become availa.ble to the
Administration are disc'lls s ed in Sect i on III o f this paper .

Application of the sa.nct ions described i n paragr-aph I.E .

would noneth~less have possible Effects of fo~eign policy .
s lgnificance for the Admtnist rat ion. These effec ts might
be as foll ows :
'-
On the one hand -

Term.inat iog assistance (or PL 480) to Chile might pro-

vide AllQnde a p l~usible bss · s for posing ~s ~ victim
of the U.S. • thus r a.lly ing che Chil.aan public to his
'
 - 6 -

suppor:t 2nd ga ining him ~yrn?a thy in o the r secto1·s o:

Lac: in American opinion.

Such action :night be viewed by othe r Latin Arn~ r ic.:in

gove:rnme•nts and He-misphe:-re pub_ic opinion as unr~a~ o n.ab L y
coercive J;"·e l. a: t ive to tho provoc {;; tion . Gove1.-nments out-
stde the He-mi. s phere might: reac t: simi l a rl, )r; pa -t i cllla'='l}'
those which ch emse l ve:~ couduct t~ade with Cuba or o thQ ~
commun i s t countric~.

S\Jch action by t he U.S, might be vie-..Jed 2s incor.sistent

wLtlt our attitude tow.:J:rd NeKic.o, 'Which c~rries <)n some
trade '{.;' ir:;: h Cuba,. which "did not acc-~?t t he 1964 0/~S
de c :i.sion,. and which er.j oy s unusually cordial ~e la t i ml.s
with us.

Ul:"uguay ~ Tri:tidad and· Tobag.o,. and other L..;tt i r\ .o\111e r i c an

count ric s. :reJ>Orl:edly <;:on.sid~1:'ing resumpt:ion of trade
with Cuba might resent U.S . retaliation ~g.ain.s.t Chile;!~Jn
trad~ ~ith Cuba and might well. wonder what ou~ reactio~
would be s hould they follow a s Lmilat' cou::- se.

Our ·action might pr ecipitate reta.l i.at::ion by t'he Allende

regime against U.S. invest:o:-s or other U.S . intere sts
in Chile.

On t he oth€r hand -

Applic8t i on of sanction s ~··ould demonstrate cbe serious

c oncern with which we view ecQnomic and commercial
linkages between a Hemispheric nation and commuflist
countries. It t..r01.1ld indicate to our frieods and al l i eG1
pat:ticularly those in L~tin Ame't"ic<~~, that they can cooot
(ln ~$
to be both cons ist'ent and · det ~nni n~ d (s&viu.g t:h.e
~xic-an ca.se) i n OUt:" cont i nuing cpposition to rapproche-
me n t s Chile or other 'Hemispheric gov.;!rt\m.e nt s -with
b}T
countr ie s av~wedly un frie~dly to t hQ U.S.
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I~ the even t of Ch ilea n t~adQ ~~th c~b~, a~plica t io~ of

sanc tions w;:,uld undG! rline O\L:- cont in·.1ed s uppor t fo-:- t he
1 '964 OAS de cis iotl, a de c is ion \.;ba t we believe continues to
conn..1.a nd m.o j o't'i t y Latin Amer ican ~ dhG! cG!nce .

I t would be a clea r signal to AL.C!nde that we meart what

we say.) tha"C our c onc ern i s seriollS n e t tr iv i al. He may
t hus as1< himsel f lj,.Thether gt"(!atel;' P't'OVQ C'S.t i on ~ill b~ met
by heavier ~etaLiation.

lt would dernons tratc a willinenes.s to a bide by the i n t-en t

o f legis1~tive prescription.

II I. Othe~ Sanc t iQn s

lfl add it ion t:o t he le_gis l a t i;.·e s a:1ctions th.a;t might be

dirC!ctly t riggered by Chil ~an t rade with comrnuni.st cQuntriG!s ~
the following additional sanctions a ~e av~ilab l e in certain
circurnst~nces o, u~de~ specified conditions:
I

Und.e r exist i.:ng_ ~greements 'loil'ith ·t,;hil·e t he U.S. Govern:~':C:nt

retains in large mea s ut"e the ri~b-: unila t er.al l.y to. con- .
tr.ol the pipe line of military assi stsnce and milit d~Y
· sa:los , and the dispo si;:;ic·n of U.S. n.aval ve sse ls on .•
statutory loan or leas~ .. Ba laf~ces of AID loans not
corrmi tted tht:ough i rrevocable LQt ters o f C"t"edit or
otheL payment arrangQ~nts may be suspendQd if furthe~
disbu~sements wo~ld violate th~ legislation governing At D,
or if AID determinQs that an "extraordinar:v .s i.tuatio:l"
ha.s occur:ted whi -::h 'ktakes it improbable: e f t her t'hat the
. purpose of the loan will be <~t t a i ned or that the B.or~cwcr
will be abll:!: to pe"t"fOtm its obligat ions. 1, Project agree-
~nt s for grant tec hnical as.s ts.t:a alce nol:lnally provid ~
for tc-rmf.nat ion upon thirty· d a ys writ cen n ot ice by
either party~ and the irnplem~nt ing contr~cts norm~lly
provide fot; renninal:ion in the best interest of t he
Government with fair reimbursement t o the cont ra. c:eor
for cos t s l:'e s ui t ing f rom such t encina tiQn.
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Sirr.i · a1: l y .. t t"l e st anda rd f o t-m fa r mil i t c:. r :.v ~ J le s agr e e -

ments,. DnF 1.51 3 ~ provides th..:t t -c h e ll SC 1i un G~ r un 1..1sua l
.an.d cornpeJ 1 ing ~ h :eu.us tances "'·hen t he be s l: i nt(;n· e s i n£
t h e U.S. re qui res it, r ese t:\H;!S "the right 'CO o:::~ nc cl all
or pa.:-t of t his offer at a ny time pr ior t o t he d e l i v e ry
of defe ns.c .a ;r;-t icl.es c r pet" f o rrn.ance of Set."V ices. Tt sha U
be 'r~spon:> ible for al l costs resuLting .f ~otn can ce l l at: io':"ls
u ncer this p2.r agz;aph .. IP This right of canc el. tat ion
.app l t cs :::o all FHS pipel i nc items up t o the p ·C tint of
delivel"~t ~ DOL"lrlal ly at t he hti.ti.a l poin t of shipn~nt,
whetn 12r p~ i d for wi th cash. in .ct d·.,.an.c e or on c re dit . ·

The USG can a.ls.o cot1trol the delLve;-y cf .an y commercial ly

supplied mi lita~y items b y wit hhold t~g the ~ecea s ary ex-
·- port l :i.can s es . In the e"' e nt of a 'FM3 c :::-edi, t a:-r-a ngement
wit1l ~ c ornmerc :.~ 1 supplie-r, howeve 1; ~ USC 1 i.a.bi l i.ty ma y
resuLt. ·

The l o an .agreel'£\.e.nt s and leases under which U.S. naval

vesse-ls ~rP. btein:g \ltil i z.e:d by ~he GOC provide f o r t:he.
retu~ of such v~ssG~to the U. S. cont r ol upon reque st .

·n~e:President ·~ou.i d determin12 that: Chi l a :. s a 11communist

count r y r1 under Sect ion 6 20 (f) of ~h~ F.AA $nd a country
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"d omi nated by a colilrnunisl: goverml~cnt under Seet i o:-t 103.(d )
of the ATDA) thus precluding a:. s ist.anc e .and s~le s of
agricultura l commodities fo r foreign curren~~es unde r
these statutes. file l?1:eside nt col.)ld ~a.i'\·e the re -
striction oc assistance if he dee~d that such assist ance ·
were vita_ to the: s e cut" i t>' of the- U. S • and 't<oiould promot ~
the independence of Chil12: f['om irtt ernatfu nal comnunis.m,.
but he would b e required to deten11ine th«:. t. Chile i:s not
controlled by the int ~rnational co'lttt"!uni st consp~racy.

The Pres i~ent could e-xercise t h e a·.Jthori ty p:-ov l.ded ':>y

the Expor-t Contw l Act of 1949 to prevent thQ e xpo,;- t
from t he U.S . of comrr~dities the sh ipo~nt of wh ~c h
eithet' would be ir.consis te.n t TWith the f c)r e i gn polic y
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of the tJ. S. c:r would i rop.ai..-.:: t:he na tional sec1.a.·ity. ~1-:: i s

~uthorit>" ha s beett used co pr-ohib:i..t all exports to Cub.a ,
t~oeth V i etn.;~m , Communi st China) No rth Yo 'bea ~ and Southe:-n
P..h.;.d~ siLt + LiNt:-a s~ s also an~ de t)i ed for any e xport •which
is determi;ned to b e .o s i.gnifi-c:.ant cc)ntr::but ion to the
mil it ary or eco~omic pot en ti•l o f tt~ c~ronuni s~ ccunt~ies .

The Preside.:l:r c ot.::l d exerc ise t he au thor ~ ty prc-vid ed under

the Tl:a tH,ng "to "i ch the .Enemy /'.e r:. o f 1 917 during a ti:m-e: of
wa't' .or pet"io d of n.at i onal ~L"fter.g.r,fn~y decla L-.e.d by -::-he
Pres icle 11t to p-rohibit fin.-a:1cia.l t rans.act i.ons ...:i th a
fore ign cou::1try an-d tT.at·. ~ a r= t i t>£'1$ i.nvolv ing ~-ny propet·ty
.s ubj ect t -o iJ . S . j u:' i.s di.c t io:r. in whi ch a fore igr"\ ccmnr::ry
or nat ion.a l t"-..?. ::;. ,'f'!n inte"t"e: St. (The Dec1ar~t ion of Em.ergQncy
iss ued by P~:""e:Si.de.nt Truman in 19so · a s .1 res ult of the
" Ko"I:"e.an conflict i .s st i.ll i,n ~orce ,. a nd t .he Trl'.lding. wi th
the Ene!TDY Act ha.s been used as authority .f.a r the Cub an
Ass e~s Cor.~rol ·Regul 3tions 2nd regulations rel?ting to
limi~a ti oft of d i rect U.S. inve stmeot ov ers~as + The 1950
D.::!:claration of Emergenr:::y made refe"t"en-::e t o the dangers
of 11 comm.L..L1t is-r. -i n:p.eri.alism' 4 and t b.Gt '"i ncrea.s i.ng meaua:ce
(>f the fo·t""e~.s o f c-onmn,mi st ~ggre ssion . 11 )

!he array of f avorable arid u11fdvor~bt.e -effects of .=;:p pl y i ng

any o r several of tbese .ad ditiona l saL"l ctio n~ is diffe~ent
only in degree £ rom tl\~ effects slread~ listed for the
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:::H~ c:t(td.a rd u sanctions. Th-e un f.avot'al:: 1 e -re.a c t ion coul d be
expect;ec to be str·ong~.st were sanctions to takQ on the color
of ireccnomi c warf.are 11 ~ s might be in!pl i.e·d £ rom .a seve re
applicati on of the ~xport Cont rol Act or t he ·rra.di:ng with
tha l)lemy Act. In tl-~ t eve nt~ Chi le mi.g1l.t well .attack the
u.s. in t:-ie. o.t..s and pe':rhap.s in other forums for ~CQnomic: 11

.aggress.i on1 ' or ' ' un l a~·f~ll i. n.tero~ent.iobrt. Chile mi gh t c;::.::~ l l I[

attention to Ari:icl~ 19' of tlt~ OAS Chat"tet:: whic h p1·ovid e s th~t

1'no stat:e may u.se ot" encour age the 1;se of cooerc: i.ve m-aasU"J.-es

of an eco:-~omic or pol i~ i ca l clt.a-ra.cter in o:rde-r to fore~ '!: h~

s overeign will of another stat ~ and obt~in f~orn it adv~ntages
of any kind. n .) am:.Lar p:t·ovis ions hc;.ve been .adopted i~ t'"he UN
Declaration on _Principli s· ol~~~ . 1\ional Law Conce~.ing
Fri-endly R.elat :tons a.n~\~ · . . ~~\t't''>ng Stacas ~ and UNGA

' .\J .; T/NODIS

Resoltlt i::m 2lJi on J:J(n-a inter'V·ent.ion. If st r ong 5artct ~on s ~e :::-e
a pp 1 ied in the .absence of cictuonst r able Chil ean in terve:nt ictYi ?-Di
ot- t hr~.a te r'l tng miJ it~ry ties with the U~ SR.. Ch ile r,..oo~.cllc f i.nd
some pu.bl.i.c il't"'<f rr.ore privat e sympathy h :om Lat ln Am!! r i c <i: ft
governmen t s fCtr the "e c: o r,om i c aggression'• cha t;-ge. An at:
l e~sc equally s ympntbetic res p o ns~ c oul d b~ ~nc:ic ip-3t ed ~~orn s orne
so;ne sectors of pHbLic opinion i n Lati n Ame r ica .
 ? l ans fo r Congress iona l Con~~l t~t ian s
C·tl ll . S . Pol i.e\: Tow.c~ rq Chi 1e - Ja:'lun r y 1971

Scon af te r the 92 nd Congress cotwenes in J;anua.~:y 1<:1 71 ~

the Depr.rt:rnent of S l:a.te, s uppor t~d by other in teres ted
agc~cies. includ i~g US1A) AID, DOD a~d CIA~ wi l l ma ke a
c. oncentr~ t ed effor t to hold conff.d,e ntial discussions con -
e e!rning U.S . po i cy tc:o•o11axd Chi te including. rec en t devc lop -
rnen ts, future possi h ili.:: ics a.1'ld some o f the problems \o.o·e s.hal1
be f a c ir..g . Targe ts fer the.se discussions ~ hcuLd b e. Congr~s w

s f.one l leaders, Cbai men ..::;;nd rankit':tg opposition Mem.ber s of

re:lcv.1.:. t ComrtLitcees ~ a nd seLected Cormiti.t: tee Staff Mernb e::;:-s .
Methods t o be employed '\-:i 1 L ra r\~C:: wicl~ ly f::-crn .s ene~· a 1 dis -
cuss iotts in whi(!:h Chi lc is in<; l1.1ded VJi th other i.t em.s ,
tilt' Cl.lgh one~to-onc b::::-i etings 8nd d is.c ussiot1S 11 to group
briefings in l~e Departmen t . A dec isiotl.whether t o favr. r
·f o lllla l hearings s~~ou ld be del.::~ye:d un t il after --he in£orn:.<J.1
consul t::..a t ions. Genera 1 reo$ pons ibi l ity fo r d h·ec ting consu lta ~
tions will lie it'l the. Bur-eau c£ Congres£ i<rn.a 1 Re-1(1. tions . .So()r.
aft:E!r detet:mi.;-~.ing the date to be gin cons ul tatiotl.S ; .a.ss t gt'.ments
of of fie er rcsponsi.b i litics wi l l be. r:nade in coot-dina tion with
other l'le:partments a nd agencies con~f!rne.d, to in.s.ur.e q uali fie d
b<lck -up on th e. various aspects of interest .

W:tCM 1'0 CONSULT

(some l eadel:'s hip <:!hanges should be. e:xpected)

SENATE

Lead~r s
Mi ke Mansfiold
Edward Kennedy
Hugb Sco t c:
Robert: Griffin
Richard Russ ~ 1

Pa rt~_Policy C~it te~s

Gordon 'Al- lott

 fH.;.c,Jss ions T"'ich th e <: hove shou l G b e.~ general rathE::r tha ::
sp~c i f i c ~with Chi l e being only ona of several i ~ems J i s -
c usscdJ ~nd shcu ld b e cond~cted by Dav ~ d Abshire . ~eader.
should be to l d tha.t others w ·3.1 be: h:r:iefed in mor-e. detail~
buti i f they desire, chey ~ill be so briefed too. I f they
choose: t o be brie fed, Charles Heyer will br ief t:.hcrn.

Substantive Leaders

Fo ~e ign Relations C~itcee

,J • 1(11. fi..•l br. igh. t.

George: Aiken
Fl.".ank Church
A~ed Servic QS Commi t tee.

John Stenni s
:t-1arg.are.l:. Ch..;tse Srni t h

Forcigi\ Oper.a tions Sub.;OJtlll.lit tee

Senat~ Staf f

Carl March Norville Jone:s

Pat Holt Maurice Pujol

HOUSE

Carl Albert
G~rald Ford
(Major~ty Leader)

Discussions with the above. should be. ge:~er.a 1 rat:het- than

speci fie ~ with Chile be i ng only
one of s cveral i tems d:!.s-
c~ssed, and should he conduc~ed by David Abshir~. Leaders
should be told that others will be b~iefed in more de tail~
but 1 i f they dcsir~. they will be so briefed too. !f they
choose to be b~iefcd} Charles Mey~r will bri~f them.
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Forei.g.n Affa ~ t""S C::J:md Ltee Ar rn ed S erv i.e: e s Corr:u;l i L tee

Thomas Morgan L. Mend el Ri ve rs

Willian MaLlli aru \·hlliam B.a.te s
Dar. t e F'ascell

ForeisH\ Opel:" a t i.or.s Subcomni ttec (A?propr:.a ti ons)

Oc t o P.;J.s so~ E1
G<n-ner Shd ver

.§.ubcomm i tt ee. o n F<)reign Op~ratior'ls P.nd Gov..-.rnmen t

lnfo1:"'ma tioi. (Cnvernment Opera t~ ons)

John Mos s
Ogden. Reid

Hous e S :ta Ef

Roy Su lloc k
Ma.r i on Cz.c1 rne.c k1.

~'HO SHOULD CONS ULT

:t-fos t S\.rbs tant ivc c ons ult;:;:. tions will involve Ch~rl€s Meyer
or his C!eputies, assis ted by represl2ntatives of o ther Oepart-
me~es and agenc i es as occasion requir~s. Senator CPurch ~nd
Congr essman Fasce ll s hould be in.vi te.d to lunch s~para t e l y itl
the Depar ement . ARA art·~ INR/RP...R. will p:rep.":lre a twenty minute
fa.c tua 1 b t-Lefing ·•,.;~f:ich will b12 perfot::med t ,_.,ice > on th~ ace as i on
- of a.~o br.e.akfas ts 7 to be held in the De:parttaen t: and h osted by
M::r . M·e yer , o:n e fo r s ubs tan t i •rc Lead c r s of ho th Ho1.1s es .and the
othe~ f or l is tQd ·Congress Lona l Staff.

T!MING
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InL tia l cou.su ita tion s h OI.l ln
c.over .a three-day pe.r i od .
Day l ·- dis.{:u ss -wit;h Leadet"s and i nvite S e:na tor Churc h to lunch.
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na y 2 - br ea lo:fa.s I; i o-;: Subs tanti'olC Leader:"S and lun<:h with

Cong-ressrortn. Fasc~ll. Day J. - b=-e ak f ast. fer CQ:tsre~siona l
Staff and special br iefi~gs fer tho~e whn have missed
c.;n: lier oppo-r tunili es. It is aot. nae:e s sary for thG! above:
thr(!!:! ••ciays 1 • 1:.:) run COiL"'S e~"~;tivG ly.

CONTE-NT A~D TO~lE

•.f'he cont~nt of tl'H! di.scus,sions will be adjusted in

spec i.fici ty to tlH~ rnembe.r. '.:'he ~a lking p ape::~.- s will be ·
prepared by the: Ad l~oc: Inr::.erQgenct Workipg Group fot:' sub-
mi ss i.on to the SRG f o:t;" approval.

_ Sor~te me:mh ers of Congress have r ,ece.nc:ly express-ed s ::rongly

their anger fit ne,:•t; 0€ ing CD[l:f,'.mlt Cd as Shnll1Q bC trlle r,Th~n b-i.-
pa:rtiSart.Ship in fcreig.['l policy is des b.-ed. furthermore, tb e.1:e
i s a widespread fee ling that consultations come to(> late,.
"involve rna t ters of lirn i. ted importance , .and .are mor,e. it1fot"t11ings
than consultatioas. Tha lack of a rr~jor public Congression~l
c l.a.m.o r o·v C!:t' Chi lc- U . S • r c l.a ti o ns does not rne~n lack of
Cong~assional interest . The failure to consu lt Congress
befo't'e January and the '¥a it to consult until a.fter the.
c~opletion Df the 'NSC p~ocess a~~ matte~s of potential -
vulnerability+ Ne:vertheless 1 our approaches should sc;rcss
a tol"'e. of dialog\.le, an ex:.amit't.a t i,nr. of where t,.;~e s t 8nd 011 Chile.
at tbe time, a sea.'t'ch through the cc:ning pt"oble:ns, and th e
need for confidential d ~ alogu~ .

We shoul cl consider recom:r.ending th.at C01rmittee S t.:aff prQ~

pare a ccrtfidenti.al report Oil the prohleru to tP,ei r CQr:omit t c~s.
We should offe~ ou:r ~,;.sista~K-12 in prep.arat:ions f-r.rr such .a
report .

T HE PRESS

Thought must be give:n to whethe.:t;" the press is t:.o be

notifi~d of our accions. If not~ ~e ~rust ~tress the nc~d
for keeph~g confiden.ces in the pro:::es s of COJ\g:t:"e. ss. i on.a l

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coasulta.tioas. YC!t ow~ s h oiJ l d ex.a:ni n e f 1rch::r i f ~\JC L an
e:>~p ec t a t ion i. s v.l t s e or :rea. 1 i s tic . · I f no c 1 a. p: e~ s s t r a t € g~;
shou ld h e <i'e-\H:!lO;Jed concurrently ·. .;ith, but be c o:r.plc:na.n t12cl
srJtr.-e',..;oh~ t b e: hind, the Congressiona 1 s ~ra tegy .
..
i Q.E?.!f
A spec i al ?roblem rr.ay .c.r is a oveJ; pos s ibLe expJ:opd a ti o::".s
of U.s . -or,..'l1c2d co:r.r>&nies holding in.v e:stment g:uara:1t ~es . 'We
.s hculd be prep~ red r;:o write ~ specific .sc.ena ::- io f o.z: t he OPlC
pr ob lQffi if it b ecom~s clea( that i~ ls inde~d ~ prob l~, ~nd
having i n mi nd the possibility of a future r eque~t for a·
suprleme nt~L approp ri~ tion.

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St~ L ~ s Re port o~ U. S. Acti c n 5 Lo

D i scou t: a ~e further Re:s L~3\P .. ion::: o f
Relaci c QS w it~ Cub~

As ~~ p o~t~d to tb~ SRG by the Ad Hoc Inter ·

a.gency lo:orlri ng Group on L'\ov e~1bet" i. 7, the Uepart;nen t
c: S catc on N o'u~mbe:!" 15 ins tn.JctQd c.l1 ARA post~ t o
info~ m h ost g~ve~nments of ou~ Novembe r 1~ public
s ta t e net'.lt depl oring Chi lean :-es umption of re la t .L ans
wich Cub?, t ( encourage similar uni l ateral state -
ments a~d t~ ~evie~ w l ~~ host govern~ents the U.S.
pos i tion in favor of maintaintng sanctions on Cuba .
J\ s u~r.rr.r. r y o: re s ~ottses is at: Enclosut:e 1.

On N~vec1~e r 17 . cbe Oepa r tnten c of St.::. ca sup-

p1emented .the instruction me11t ione (l aho·.,e with a
cii:-c ular m·: !ssagc to a l l ARA diplomatic posts
containing a deta"led r efuta t ion of Allende 1 s publi c
jugtifiea:Lcn of his decision. to ren~~ r e1a tion s .

Our OAS t~e legatio:1

iOli c arttinuine ~ o- ~sul t.l tions
~ith ~Otm~er po r t;Si n W.'\Shin8t on, a nd during hiS
attendance ac th~ inaugura t ion ceremonies of
P~esidant Echever ria in Mexico City Koverober 28-
Decemba~ :5, Assistant Scct:etary Meyer- will ha\.'e
ext:e.nsive ccnsultation:s with Latin Am-erican \ead~z: s
consonant with th~ policy guidance of NSDH 93 .:=.:nd
of SRG decis i ons . ~e wilt then r a tu~n in time to
make an ora! rcpor~ to the SRG .

SRC princip~ls draft cable

hava &P?roved ~
instructi~n (Enclosure 2) on dissemln~tion to
Latin American Govern~e nts of covert inEotmatiou on
Ch i lean ~ctiv i ties~ ~h ich are adverse to th~
security inta rQst of other A~ex 1 can republics and
a~'a.::-cne s s of w-hich s hould s ~r-va tcJ discourage o th~r
cnu n ~ ri es f ro.:;z fcito-wi ':'tg Chi Le in ren e~-.'ing tel.otion.s
witb Cuba.
·~
 I~ ~dd it i on . 2 cable inst r uc t : on t~ ARA
rusts i G b eing prgp~~cd and cle a~ ed wi th SRG
principals \..·hich d12scribe~ in detail recent Cuban
effo~ t s eo ~xport its ~evolut~on. This up-dating
of inf or mati on on Cuban activities will support
our con t~n t i on tha t Cuba has not ahRndoned its
po lic~as t o export its revo lutionJ provid~ a
r e a ewe.d bas i s for dec I.;- rin g ~ha t lj . S- policy of
isola t: i n g Cuba rerna i n s uncba.t'le_~d J and provide the
:.ppDr tu~l.i ty for ouL .Amba s sad ors t o c on ~u lt f n de t .2 i l
with hos e govc r ~ments with a vi ew t o persuad i ng
them to suppm:: t the co nt i nucd application of. th e
OAS resolutio!'ls a.ffectj 11 g Cuba .
 Enc lo~l.Jt"C 1

L a tin Ame rican Rea ctibns t o Ch ilean

Rc n ~(~' .a 1 o f Ke 1 a t ions ·,..rith Cuba

Un i l a !..et·.a 1 public s ta t: emen t s o~ a. dh<:!t:C nc e to

OAS dec .Lsions \o.• c:;r e 1r1.ade by Bt:azi l~ Colc:nb :ta,
Costa Ric~, the Dominic~n Republ ic~ Ec~ador,
lioL"H.Inra.s, IJJ:Li 0 '1.la:y and Venezuela. !l"te Fo.re ign
M3ni s =ers of Bra~il and Costa Rica point edly re-
asserccd tteir oppositi on to resum?tion of r elati ons
with G\.lba or 1·e ~admiss ion of Cuha t:o the OAS ~
Howevet' 1 only the Ccs t.a. Rican was open ~ Y critic a. t
of tf'e Chi l ean c.cti.on. Se\.'eral othe.rs pr-i·11 a tel y j.
exp~es:: ed acih e n~nc e to OAS dQcis ions, but se. ~n,ed
- raluct~nt: to s pe.c k puhli<;l y . t;'l;:"e$ ident Vela.sco of
Ec uador ela ~orated upon his FoEeign Ministe% 1 S
scatcrn eut of support f or the OAS position by
saying t hat Cub e sh~ula not be ~~intained in
pecmanent ex communication.

The Foreign H ~ nis t ,e rs of Guatemala and

El Sal vader se~mec recaptiv.e to :n.Jking s t .a t:eme nt s
slmil~r to ours - ~nJ i n a ddition u~ged a concerted
effect to bloc k Chilean cand i dat~s 5or I~ter­
American and internatio~al offic~s as a r eac t 1on
to Chilea n con t t:<lvent ion of OAS dec is tons .

Disapp o intingly~ Argentina s atcl publ ~cly that

it consldeES Chi le s actio~ of domestic Chilean
1

concern) ~ l though this was obviously .stated -wic:h

Argentina-Chilean ~elations in mi~d. Panama will .! .
_consul t 10rdth other .Arnar ican goventments befor e
dec t ding on a pcb~ic statement.

On the poss ibtlity of sn OAS ru.eeti ng. on t:he

g~neral subjec t of Cuha, the Co lombian F01:111ig.n
Mi nister ann~uuced that Colombi~ would support
convoca tion of an OAS meeting of to~ ore igt1 Min is t;er s
a~ soo~ as possi~l c to ~eco nside~ the Cuba cas e .
He. stated t~a.t dip"lo-nat ic r~laticns .could be resumed
 if Cub.'! c01r.:-t' i ts i t s e l f to a policy of non-ir.ler -
ven~i on . addi ng th at he Lnders tood thete bad
been a change ::!. n Ca st:r o 1 s .~id t:o g\le.tl·1l l .a.s _ The
l)r u gu~y an and Co lombian foreign Mi.nisters ex:pres sed
c once r [] in priva te over pos sib 1<: fm:· tb e: r er c·d:l ng. o [
OAS dec isior~s ~ nd ever a r es lll t a nt WQ<:I keni ng of
the R:. o 'I' r eaty under '\.ynic h th e y 1...·~r e ::~a de . They
thought r- me~ t i ng of 'the OAS might be celled to
r e vie~ po~it.ions one r,;.E~y o~ .anot.:hf!r. The Venez.u~ l an
and l!c uador ean Foreign Hin istr ies are also ·, ;ei g.l-)i ng
t he ? respects of OAS discussion , and there are
i nciic .:.tj 0 1"1 5 that the l.s.t t er roa y be mo...-i ng. to·,.:~<:u:d
~dvoca cy of ltft tng sanc t i ons as no tonger needed
- cl' us eft: 1. 7h.es e goverm:a~n t5 plan c :-> cons\1 1 t
wich othe~s ove r the po£sibility of an OAS mee t ing.

On the oth~r band ; t he Brazilian Forei g[] Minist e =

has coubts ove r the outcome of an OhS oaetingj t he
S 3 lv ~ dorean t h inks a meeting ~ould b..:: c ountex-
productive; and t hE Pa~aguaya~, while also suppnrti~s
OAS decL- i ons t t hinks lit tJ e can be done by the OAS.

The F ore i gn Min ~ ste-r .o f M£!xicc s poke ap -

p:rovingly of Chil e 1 s .act i. on 1 s ay ing that ..~ I though
Mexi co wnuld no t raise th~ i~sue i n the OAS, it would
vote :t"in .accordance wi th i ts traditi onal p.rinci plQs••
if it i s raised. The Pe~uvian Governm~nt s tated
that it favored fresh cons ider~tion of fac tors
surrounding Cuba: 's exclusion f rom the i nter-
Arne ri_c an dia l obrue . The Pe:ruvian Fo teign Min i ster
had £a i d earlier t hat the Cub~ que~tion should
be re·examined but oniy ~ithin the OAS context
.and th~ Prime Min i ster ~dded t ha t P€~u would not
re~rume re l~. t:ions until Cuba c e~ sed e.>: port i ng
.r evoluti ons . Our Arn':>.E~ssRdor be U.ev es that t'e:ru
woul d~ i n fact, vot e to withdraw s~nctions. The
Boliv la~ Foreign Mi nis try ha s pri vately t ol d u s
Bo livi..=.: will n ot pr op.;;.s e any cha~ge i.n 0.1\S p olicy,
 GONFIDENT I~L'

-3-

lnJ. c o u r Et:tb os sy l;r'arn s that HTh.ird \olorld ' r ad·voc:a t es

in t:.I:H~. Gov e :t:nment w;i l l be -.;.mr:'king fot: .a !• :u:~}e ra l b :. a-
t i 0 [\ •' o f Bo 1. i 'I I. o 1 s p o s i t ion on C·...-ba •

·.

\
 Enc l c s u ~- ~ 2

Dro=::ft: Ci.rcu l ~ r Te l eg.~D m tc all AR..~. (h) efs of ~lU. s i on

As part of USC. c:cnsult~tion ~i.r:h sele-c ted Latjn Amcric .3r.

gov·ern.~'tlent.s o:-. Chi] -e to a.ss -.n-~ tE.: ci Y undoP..t."'S t.attd i;rl.g. .and to
proma~e thei~ sharing of our concern over Chile , we wish you
to br ie:f your d:. plomatic con ta·c t.s on cove:ct and overt ~nfc r­
ma tion 'W'hich s~.:.pports th i s obj ec t:i·..,e.. ~~ ~ 'L.avc. been infor:ne·C.
b y CAS Rqs t hat it pe't" i .od i c.a lly pra~.a res t n te l ligenc e i t::.n~
for its Li1. s t.:n:ions for u se: wi t.h careful ly sele.c:. tt!;!d co11 toe ts
i~t support of E.bove obje-ctive. CAS Hqs has inforn1ed j,.ts
s ._at ion ch:i efs tha t suitable i t.ems t..'i ll be di..!$c:ussE!!d with
you so Ehat you ~ay consider pass~nz t hen co selectee
coneacts whom it would be us eful tO influence . 1be se l ec-
ti:Jn and clissem i na tion of CI\S ma t e rial to such contac;: t s
s hau ld be close: l y c oo r din.a tee -wi r.:h th e CAS •

....
 St~t u s Rc oo _t on U.S . Stance o~ IDB
Lending co Ch i le

The U.S. Ekoc utive Jirector cf the I nter-An~rican

Ce vel oprr.€ :n ~ iS a nk understand s t"ha t he wi 11 l:"em<:. i ::1 \m ins t rnc t 12 d
until f ur ther not: j ce -on pending ! r~ans to Chile , As th.ti! l oans
fo r Chi l ~ arc- fro1u tl'te f u nd f ot' Special Ope rat ions • where a.11
affil:'mCltive vot e by c::te U.S. i.s. reGu irerJ f!(n- l -oan epprova i ~
this wi 11 eff.e ct i vel y b.a r a pproval of the loans tH'Jt i.l t:he
SRG decides ot her~isc.

The Ad Eo·c T,.;J or], .1n,g Group -..:il l s ubrn i 1: t ·o the- ne x:t meeting
of t: he Sen ior Rev i e~· Croup a. report en tbe s t a r- us. wit hin
the IDB o f Chi l~an loa.:·, l"equ.c sts 1 ~nd .:my p~ r"t i nertt ~ecorr.­
Jt'lend at i O:.)~ .
 Th~re .::n·e th:-e<a :Jppro'\•ed lD RC 1. o~ns to Chile f or wh :i c::h
disburser.:cnts ~,:3V e not been ma<ie. On t-..;o of 1:he5~ - ~ a $1. 5
million loan for education th~ough CORVO and ~ $7 million
loan to th~ Ml nist-y of Education--the condit ions preeeden~
co disbu1;-sem::::nt h ave heen rn€t . O:"t · th~ thi:t:d· -a $10.8 million
loan to the Minis try o [ ru':>l ::.~ Wot:k:s for 1:oad cons t l.-uc tion--a
leg2l opi~ion called for by the lo3n agrec~1 enc has not yet
been receivP-d but i.s exp;;;c ted irt Decem.bGr. ·

"fhesG th\."ee loans J which were approved by .t he Exe-cutive

D i.~::ectcrs Bnd f<Jr v;·h.i,ch l oe1 n .agreements wel;"e· signed befo:t:e
tl}:~ Chilean eLect 1 ens,. are beyond rec.all.

ThoG:re is curTently a f'l.u:ther 1 oan-proj~ct f cYc Ch i.leJ u[·.der

act i.\•e preparation within: tho2 l.BRD. It amo·~~nt s to $2 L million
~ and would fin.r:tnce cont iouat ion of .~ l i vestack ~ mpro vement loan
begun in 1 953. The purpose of th.a pr-ogram is to pr-ovide loans
to farr.al:::s for p~s t:ure improvQft'lenc and fo't' ~cquisi t ic·n of
machi~ery, fencing and buildinfl~. An IBRD :scaff te~~ is
scheduled to visit ~bi le in O~cember tQ wo~k out de~ails af
th@ l o~n . If sat iz fi~d with t he re~ults of t he trip, a recom-
~tel"ld~tion o E e: lea n coTMii t tee t o tru~ke th~ $?.1 rn ill ion l oan
could be ~~pect~d t.o come b~fo~e r he Executive Directors in
Jaii.u.ary or Fe-b:ru"'ry .

A set;ond ao.d irnpo-rtant pt:J.r~o~~ of the Decembe't' _BRD

staff visit to Chile is ~o discuss with the ne~ gover~o~nt a
bank staff report on Chil€!· completed la st August. The re~ort
identifies economic policy iss ues confronting Chil e and
rec01m:1ends a seri~s of policies ·.nh.ich the s t.a f f regard as
cons istl'ant wi.t h Chile r s achieving a !5a tis factory r.ate of
s ustained. groT~tb. Unless tl'le sL:a.ff is .s~tisficd ~hat the
Allende go·v en.-nm.enc 's policies .c. :-e to be: :::=onsona.nt wtth. the
 rc- po r"t 1 s e~.s~n t ial r ec: oumenti[lticns , the T ~H\D > usin g ; t s o·..;n
n o m r.. l. ct"iter i a . 'I."'0 1.•.1l d r-es c r i c t l e 11d ing t o Ch ile. The- st.~.ff
r e port a.n d the E~Htk 1 s ev[l l ua t i OL't (>f t he Chilean r-e~po:ts c t.o
i~ a re t hu s of cri t ica l importance.

By agreemen t betuee n the Acting Assistant Secret a;r;y of

f o'L lnr:er- Americ.an Aff..ab.-s and the u?s. E.~~.-;ut ive
S~ <:lt.e
Dirrc ctor o f t:hc2 IBRD ~ t he D.:2p.artm11nt o f State! is pre pa:r:ing
for t he ;:: xec;utiv.e Di :t"ectar :S p-ecif ic orieltl:ation questions
conc er :ni:ng a r eas wh~rc Chil12an p~rforrn2:ncc- 3t'ld poli<::i.e s t118Y
be ~o s t vulner~ble with respec t to future ~ERD financing .
'I'h.~ Exec\tt ive Director wi 11 routi u.e l y c:nd discre-etly c:.onvey
the~ e ~ue-st i ons to Bank s taff ll'i:embers conce:r:ned eo ss t o
in s u r e a d~q ua t e at tent ion to th ~ni by the team vi.s iting
ChU e <:!Cld b y othe1: staff e :. ernents ~Tith ir.. the Bart l< 1 b\.st wi th -
ou t t h~ ha 1:1d of the: U, S. Cove-rnllienr sho-..:ing. .in the proc ess.
-·.

...

= :-r· 1 • ;w' : : : :!I= .

 Status Reoctc on Di scJ ssions ~ilh
E:xpor r:-lrru ot· r: B3J\lt c.: ::~ Disconti1~uatJon o f NeT.., C::-ed its
.Jnd C.u.ara nte.e.s

Assistant Secretary Meyer aud Export -Import ~ank Frasi-

d ent KeaTns have discllssed t his rrsat. tcr. Mr. Kearns is r eari\'
to coope~·at~ fully bu c has r-e·qu12s. c.ed specif ic guidance on "
a ppr.or>rL~ te cutoff p:~in.ts . The cefin i t.ion of 41:ncw CJ:"edits
and g,u:n.- ai:lte..e$ 11 is made diffic\llt by the var i ety of Bank cr:edi.t
.and .gtHn·antcc- ins t'rUJnenc::s .:ind tb-12 revo lving natl::re of much of
the Bank r s bus i TH~S ;$ . Add i ttonal c.omplica ting factors ~re the
possible risk to exi.st~ng ~xr-ortglmport Baok exposure in Chile~
'Poten ... ia.l damage. done to th-2 int-erests of U~S. ncJ.t:ionals by ...
the ter-mination of certain 3ank ac c.i vtt:.ies J and thQ publicity
....,hi.ch: ',.,;c.u. l d ~ nevi. tc:_b).y be gcne::::-ated by most specific !Bat"lk
actions ~n this area.

These various clements a rc being u t"gently sorted oc..:.t by

Deparc:.me:n t. of State and Bai•k officer.s , As soon as· thi.s
process is completed, a further report; with cu L"Krct~ tecoru-
menda c:ions ~ 'Wi.ll be made to t:be. SR.iJ.

t
~.

'
 U.S . Scient ific Pto iects in Chile

.Q ISCUSSluN ~

A radi.o astronomy obs-er~Jat:ory is. being cc·n s true ted at

Cerro Tololo i n southern Chil~ by a uon~profit U.S. cc~por­
a t ion urtder cont:~:act with t he [\l;S t tonal Sr:: ience rol.lnda t ion.
Approximately $20 mil l ion has al~eady been spent~ with an
add it io1'la1 $2 r.~il1 ion projected ovet: t h~ next two o r three
y-es rs before coll!lplct ion.. The project has ;;; writ ten ~gree­
mcnt wi t:h rhe Uni."·ers i ty of Chile, and is covered by a
Ch:i l ean lG~w (wlli. ch also .appl i es to the Soviet ob.s ervator:.,.
nea1· S.anti~go). A.t en de told the U.S i!'~nage~ that he
1

w~nts the proje~ t to continue,

Sene of ou~ :r:-esearcb ac t i. viti~$ in the Antarctic in-

volve t he u.se of Ch i.lea:1 terri tory for t:r~nsi t (including
port call s) .;md/ or: st.a~i.ng In addi.t i on.) the F@.se:aJ;ch. Vesse:l
1

Hero spe,nds m::.s t of tbe year in Chile~ sailing. to the: Anta.rct ic

11
during the s'ULYI1ll.err~ season. Chile ts customarily i.t"::vited to
se:nd a reprc.sentat.iv~ (o-r more) Otl all such fl i Bhts :s:nd
cruises~ ~s are occasionally oth~r countries as ~e ll? The
An~a.rctic T~eaty calls for coope~ation in scientific r esearch,
and cooperation a.':OCing the various signatari es has in fact been
veqr good.

It is~ of course, poss i ble th~t either or both of th~se

projects could at some point b~¢Qme the obj e~ts of politically
mot iva. t:ed a ttack ePd ing in demand s for their t~tmin..atton Ot"'
e"J<pulsion. Up to now; howeve·t:'., the y ·Mlv~ not been polir:ic.al
is.sue.s o f any i mport , nor does their purely .scient i fic and
unclassif ied n~tu~a lend itself to politic8 l exploitat io~.
Similarly, tlte i.r cont i.nued ope!!ra t:ion is rn.ot suscept ibl.e to
inte~pr~tation as su~port fo~ an Allende government.

w~ bel ieve that while these scie::ltific progt:'ams i nvol"e-

Chila~n p~r tieip~tion, they ar~ clea~ly of benQfit anc
interesc pr i nci?ally to the 0.5 . PurtheL~re~ their. re-
location would he diffi.cu t (in terms of finding suitable
.alterna t i\:e- sites) .and costly in t12r-ms of both m.oney and
t: i.me lost.
 RECOM>~NDA'r lefl"'f :

rn:.e Cerro T~llolo ob.SeTVato:t·y pt:'Oject ~n d the At:..t at-cti.c

t:"esearch .activities should proceed in .a routine way witb th~
clear underst~nding t hat the ~gencies invo lved in these
project s will maintain close consulta : i on wici the Office
of ;~dean 3 nd Pa~ific Affairs .

.-1:-