Meaningless Pact

"Unfortunately the agreement does not provide a fleet of merchant vessels," said one foreign-trade expert, of the first U.S.-Argentine trade treaty in 88 years, signed last week in Buenos Aires. He put his finger on one reason why the treaty, despite its political importance, was of little significance to U.S. business. There are others.

Greatest apparent concession gained by U.S. exporters were customs reductions in 127 items imported by Argentina, i.e., fruits, tobacco, autos, refrigerators, industrial and farm machinery. But full reductions do not become effective until Argentina's customs revenue is boosted 40,000,000 pesos ($12,000,000) over 1940, to a prewar, ten-year annual average of 270,000,000 pesos. Pessimists foresaw coming & going of 1942 before that occurs.

Now, as for the year past, Argentina is clamoring for more U.S. products than the U.S. can ship; her market belongs to the U.S. for the duration, pact or no pact. Chief articles wanted: autos, refrigerators, industrial and farm machinery and other scarce items with which the U.S. cannot supply even its own citizens.

Of 84 items imported by the U.S. on which concessions were granted, most important for Argentina were flaxseed, canned corned beef (fresh beef is still excluded), cattle hides and a new set of products formerly imported from Europe (wines, cheeses, anchovies, etc.). The 50% cut on canned-beef tariff (from 6-c- to 3-c- per Ib.) aroused the usual speaking-for-the-record opposition by beef-State Congressmen, but it meant little. Said J. Taylor, president of the Texas & Southwestern Cattle Raisers Association:

"We're not tickled to death . . . [nor] are we greatly worried. . . . We don't believe [it] will result in any increased consumption of canned beef in the U.S. The biggest effect will be cheaper prices for the Army and Navy. . . . The Government has been mighty good to the cattle man. ... If a concession to Argentina on canned beef and hides will contribute to hemispheric unity, then the cattleman is ready to make that sacrifice."

Since the pact can be terminated at any time on 30 days' written notice, it also meant little from the longterm, post-war economic viewpoint. Two days after the signing, Argentina agreed to sell her entire exportable beef surplus (500,000 tons) to Great Britain. Added to other heavy British purchases, that meant another sizable chunk of sterling credits frozen in London. When these are thawed by peace, Argentina undoubtedly will do her shopping in Europe. Supporting reasons: lower costs, better terms, partial European control of normal Argentine trade.

But for the State Department, and for stubborn old Secretary Hull, the treaty was a triumph. At every Pan American Conference since Mr. Hull's visit to Montevideo in 1933, Argentina has found it to her best interests not to follow through on hemisphere solidarity. What the State Department had almost despaired of doing, World War II did.

Said pleased Franklin Roosevelt in a message to Ramon S. Castillo, Acting President of Argentina: "In the years to come we will look upon the trade agreement signed today as a monument to the ways of peace. . . ."

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