Then he bluntly posed the question as to the adequacy of the Montevideo Treaty for promoting meaningful integration in Latin America.
“Since the scope of the Montevideo Treaty is strictly confined to trade proper, it does not cover that aspect of the problem which relates to payments and credits in Latin American trade. Can a progressive integration system work in default of agreements in this field?”
And he answers the question himself in a manner which makes it abundantly clear that the questions of meaningful economic integration and a fundamental political commitment of a kind West Indian leaders will be loathe to make are inextricably connected in his mind. He is not only concerned with the ends, he is also concerned with the means. Appropriate ends call for appropriate means. Thus, he declares that
” … the Montevideo Treaty has manifestly proved insufficient and inadequate. The object-lessons afforded by other similar processes show us how necessary it is that such institutions should incorporate certain supra-national elements.”
“As evidence of our determination to attain the objectives indicated, a few days ago I submitted to the National Congress a project for the reform of the constitution whose provisions include legal authorization to co-operate in the creation of Latin American organs with supra-national powers.”
“I should also like to suggest, in the institutional context, that the labour force should be assigned a definite share in the integration movement, together with entrepreneurial activities, whether individual or co-operative. A broad basis of popular support is an indispensable requisite for the integration of Latin America, as for the whole of structural reform, which would be doomed to failure if it were confined to official circles of a financial or technical character, however competent they might be.”
“I am convinced, like you, that the economic integration of Latin America is one of the essential means of solving the serious problem of the external bottleneck which at present impedes the acceleration of our countries’ rate of economic and social development. Similarly, it is of the greatest importance to expand our trade with the developed countries and to secure our industrial exports an advantageous foothold in their markets, as well as to exploit the considerable potential represented by trade with the socialist countries and with other developing regions. All this was confirmed at the Geneva Conference; and it is in a spirit of pragmatic realism that we must be prepared to play our part in the new institutions required for the pursuance of herculean labour on which only the merest beginning has been made. But – and herein lies the crux of our problem – we cannot carry our full weight in these and other institutions, or take advantage of them to secure the adoption of all the decisions we want the great industrial centres to agree to, unless we give proof of our ability to achieve, boldly and wisely, what is clearly within our reach the economic integration of Latin America.”
These, too, are our problems, ladies and gentlemen. Trading paper bags back and forth might inflate us, it will never integrate us. It will leave us exactly where we have always been, the ‘house slaves’ of the international community. Integration in the current era in the Caribbean is, as President Frei feared it was in 1965 in Latin America, “just another subject for meetings and speeches.”
The reply to President Frei was equally instructive. In a letter published on April 15, 1965, the four officials conceded that the pace of integration was slow and cumbersome and attempted to explain it.
“The slow pace of integration,” they wrote, “is not, of course, due to the Montevideo Treaty itself, but to the fact that no general integration policy has yet been formulated that clearly and distinctly establishes the desired objectives, the methods to be used, or the time required to attain these objectives, and because not all of the countries of the area have acceded to the Treaty.”
In addition, the Montevideo Treaty itself had by its provisions tended to focus attention on “commodity-by-commodity negotiations” which, while “very useful and instructive”, clearly needed to be quickly replaced by other conceptions.
“This cumbersome procedure of miniature negotiations is showing itself to be incapable of bringing about a substantial liberalization or an important expansion of trade. As the easy stage of concessions comes to an end, it has become increasingly more difficult to include new products in the lists. Moreover, in each negotiation vested interests exert pressure on Governments to exclude products that could be exposed to competition from the rest of the area. As a general rule, the selective procedure limits tariff reductions to a specific number of items and makes it almost impossible to achieve the general liberalization of reciprocal trade. This is even more important if account is taken of the high barrier of tariffs and restrictions on the area’s trade. The tariff is largely a result of the improvisation to which our countries have frequently been forced to resort in trade policy under critical pressure from outside. It is estimated that the average tariff level of the LAFTA countries exceeds 100 per-cent and duties of 200 and 300 per-cent are frequent.”
Admittedly the Latin Americans have a different scale of problem. Admittedly, they are approaching free trade by the more difficult route of gradually removing restrictions on all products none of which at first qualified for free trade. But these are marginal considerations. The real point is that, after five years’ experience, the Latin Americans were convinced that that kind of integration was futility itself. Strong initiatives were needed in a variety of fields, in commercial policy, in the field of regional investments, with respect to monetary and payments policies. The problems of the less-developed territories, the problems of stimulating Latin American initiative, perhaps, above all, the development of the institutional machinery which would facilitate the establishment of a Latin American common market were calling urgently for attention.