Foreign Relations of the United States, 1981–1988, Volume XXXVIII, International Economic Development; International Debt; Foreign Assistance

74. Intelligence Information Cable From the Central Intelligence Agency to Multiple Recipients¹

Washington, November 5, 1981

[number not declassified]

[cable number and distribution date not declassified] Country: Mexico.

Subject

• Evaluation by Mexican Foreign Secretary Castaneda of the Cancun Summit Conference [less than 1 line not declassified]

Source

• [3 lines not declassified]

Summary: Mexican Foreign Secretary Jorge Castaneda de la Rosa, shortly after the 22–23 October 1981 Cancun Summit, evaluated the results of the Summit conference, noting that in terms of achieving the objective of re-opening the North-South dialogue, the Summit must be considered a success.² However, Castaneda cautioned against excessive optimism over the Summit’s results, noting that there were still doubts as to whether the North was actually interested in pursuing Global Negotiations. The Foreign Secretary also pointed out that a number of the basic North-South issues—prices of raw materials, energy, financial assistance from the North to the South, high interest rates and external debts—had not been adequately treated at Cancun. Castaneda felt the next step in pursuing the North-South dialogue was for President Lopez Portillo to convoke a meeting of Latin American leaders and later of the leaders of Third World organizations to evaluate the results of Cancun, and establish the bases for Global Negotiations. End summary.

1. Shortly after the conclusion of the 22–23 October 1981 North-South mini-summit in Cancun, Mexican Secretary of Foreign Relations Jorge Castaneda de la Rosa discussed the results of the conference and the next steps in pursuing the North-South dialogue. Castaneda said that the Summit could be considered an international political success for his government and President Jose Lopez Portillo, but cautioned against excessive optimism over the Summit’s results, stating that the actual results of the Summit and the possibility of sustaining the North-South dialogue must now be carefully analyzed and evaluated. Although an atmosphere of good will and optimism prevailed at the conference, it was now important to analyze what will happen in the future and what repercussions Cancun will have in the Third World and in the industrialized countries which were not present at Cancun, Castaneda said.

2. According to the Foreign Secretary, it is necessary to address the doubts which remain among the Third World delegates concerning the actions of the President of the United States (U.S.) and British Prime Minister Margaret Thatcher. These doubts were based in a vague but general feeling that the basic problems of the Third World were not discussed at Cancun, or were only touched upon in a generalized way. There was also a question whether the U.S. and British representatives were actually interested in establishing the bases for Global Negotiations. Castaneda specifically noted that the rigid attitude of Prime Minister Thatcher, who had cordially rejected all propositions in favor of the Third World, was disquieting.³

3. The fundamental objective of the Cancun Summit, according to Castaneda, was to overcome the deadlock in the North-South dialogue, and that was achieved. All the parties, even Prime Minister Thatcher in a minor way, expressed their interest in confronting the problems in the United Nations (U.N.). In view of the North’s previous opposition to discussing North-South issues in the U.N. where the Third World has a majority, that can be considered a victory. But the North’s, and particularly the U.S.’s, acceptance of Global Negotiations now requires Mexico and the developing countries to critically examine the future for Cancun and the errors made at that conference.

4. This analysis must focus on several points, Castaneda said. The problems created by the massive external debts of the developing countries were not sufficiently discussed at Cancun. It was obvious that the U.S., Great Britain and Canada were not interested in discussing this issue, which is a vital point on the Global Negotiations agenda. Nor was there a clear position on the question of financing to the underdeveloped countries, and nothing was said about the high interest rates which these countries are paying for U.S. investment capital and the serious disequilibrium resulting from these high interest rates.

5. On the contrary, Castaneda remarked, the industrialized countries refused to discuss ways or mechanisms for channeling financial assistance from the North to the South. The U.S. President and Prime Minister Thatcher stood by their position that the International Monetary Fund (IMF) and the World Bank must continue to be the means for channeling financial assistance to the Third World, but the Third World knows that these organizations are controlled by the U.S.⁴ and have served as a means of repression on the South. Other means for channeling aid to the South must be found, said the Foreign Secretary, and the IMF and World Bank eliminated.

6. Castaneda also expressed his concern over the problem of stabilizing the prices of raw materials, which he said is a fundamental and priority issue for the Third World, an issue which has been at the center of the North-South discussions since 1974. However, this point was accepted at Cancun as a general topic which could be discussed in the future, so treated according to Castaneda because of the “agreement” among the delegates not to create frictions and to conduct the conference in a cordial atmosphere.

7. An even more serious error at Cancun, in the Foreign Secretary’s opinion, was the elimination of the energy question from future North-South discussions. Energy cannot be separated from the issue of prices of raw materials, Castaneda said, since the world economy is based on energy produced from petroleum; the question of petroleum prices is vital to any petroleum exporting country, and particularly to Mexico whose economy is fed by petroleum revenues. Castaneda thought it strange that President Lopez Portillo had been silent on this issue, and attributed the President’s silence to poor advice from Mexican Secretary of Patrimony Andres Oteyza.⁵ Castaneda also noted the silence of Venezuela and Saudi Arabia, members of the Organization of Petroleum Exporting Countries (OPEC) and countries whose economies are based on petroleum.

8. Noting again that Cancun was a relative success in terms of re-opening the doors of the North-South dialogue, Castaneda reiterated that some of the basic issues of the New International Economic Order had been lost at Cancun. The Third World had also lost leverage over the North;⁶ previously, the Third World, as a producer and supplier of petroleum, had an instrument to pressure the industrialized countries to cede to their demands. That aspect of the South’s tactics had been wiped away at Cancun because of the conciliatory attitude and the desire not to provoke negative reactions from the U.S. The elimination of the energy problem from Global Negotiations was a clear triumph for the U.S., Castaneda said, and will have consequences for the unity of the Third World,⁷ which is fighting to stabilize and improve the prices of their raw materials and for OPEC countries whose basic raw material is petroleum.

9. Castaneda commented that he had expressed these views to President Lopez Portillo during the private meetings of the Mexican delegation, but the President had accepted the thesis of not creating frictions at Cancun which could endanger the central objective of the conference, the re-opening of the stalled North-South dialogue. In order to create an atmosphere of cordiality at the conference, Mexico had sacrificed fundamental aspects of its and the Third World’s policy, according to the Mexican Foreign Secretary.⁸

10. Nevertheless, Castaneda recognized that the most important goal was to re-open the dialogue and begin discussions leading to Global Negotiations. To do so, he personally felt and was going to suggest to President Lopez Portillo that the Mexican President convoke a meeting of Latin American leaders, and after, a meeting of the heads of international organizations such as the Group of 77, the Non-Aligned Movement (NAM) and the Organization of American States (OAS) to study ways to accelerate movement in the North-South dialogue. Such meetings would provide a means of evaluating the re-opening of the dialogue and of establishing bases for discussion in Global Negotiations, including those areas which had not been fully discussed or were ignored at Cancun, areas such as energy, prices of raw materials, external debts, high interest rates and the creation of a world energy bank. Such North-South activity must take place apart from conversations with the U.S. and/or the North, Castaneda said, in order to rapidly formalize the agreements of Cancun and to prevent the dissipation of good intentions.

11. Castaneda then remarked that he personally would telephone Cuban President Fidel Castro to discuss the NAM’s participation in this evaluation of Cancun, and would then advise President Lopez Portillo of Cuba’s views and those of the rest of the Third World. He commented that he did not feel that Castro should criticize Cancun and its participants as that could endanger the re-opening of the North-South dialogue and noted that he intended to tell Castro that.

12. [1 line not declassified]

13. Field Dissem: Embassy at Mexico City for Principal Officers only: [2½ lines not declassified]

1. Source: Reagan Library, Douglas McMinn Files, Economic Summit Files, Mexico—Follow-up; NLR–369–10–47–6–4. Secret; [handling restrictions not declassified]. Sent to State/INR, JCS/MC (DIA), CIA/NMCC, SWS, NSA, Treasury, SOO, DOE/OCR, Commerce, USTR, FRB, NSC/S, NFAC, and WHSITRM OCR.
2. An unknown hand circled “the Summit must be considered a success.”
3. An unknown hand circled “were actually interested in establishing the bases for Global Negotiations. Castaneda specifically noted that the rigid attitude of Prime Minister Thatcher, who had cordially rejected all propositions in favor of the Third World, was disquieting.”
4. An unknown hand underlined “are controlled by the U.S.” and placed a question mark in the right-hand margin.
5. An unknown hand underlined “thought it strange that President López Portillo had been silent on this issue, and attributed”.
6. An unknown hand circled “Third World had also lost leverage over the North.”
7. An unknown hand highlighted “the desire not to provoke negative reactions from the U.S. The elimination of the energy problem from global negotiations was a clear triumph for the U.S., Castaneda said,” and placed a question mark in the right-hand margin.
8. An unknown hand underlined this sentence.