W.-ESTERN HEMISPHERE DEFENSE


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    5. Stockpiling program (Annex- No. 4).
    This section appears to be inadequately presented and sets forth
 no criteria for developing a positive program of strategic materials
 procurement in Latin America.'3 Neither is it related to the increased
 current consumption requirements for strategic materials as set forth
 in Section D of Annex No. 10.14 Neither Annex No. 4 nor No. 10 pro-
 poses a concrete program   for the expansion of strategic materials
 production and transportation in Latin America. As stated on page
 19 of NSC 68/1 ". . . almost no start has been made on the basic
 production and expansion programs -vhiich are so essential . . . "1
 ARA has on several occasions volunteered its whole-hearted coopera.-
 tion to the representatives of the Munitions Board and the Federal
 Supply Service in giving full diplomatic support in the Latin Ameri-
 can countries to a program designed to expand the production of
 strategic materials in the other American" republics. To date no such
 program has been forthcoming and little or no evidence of the estab-
 lishment of productioni goals in Latin America designed to meet both
 the requirements of current consumption and of stockpiling in the
 United States. On the contrary, it appears that we are pursuing a
 day-'o-day policy of trying to deal with the problems as crises arise.
 This was acutely evidenced by the directive recently received by ARA
 to approach Argentina and Uruguay on a program for allocations and
 price controls with respect to wool without any regard for other
 aspects of our economic relations with those countries and particularly
 in total disregard of the refusal of the Department of Agriculture
 only a few months ago to grant Argentina's request to remove wool
 from the CCC surplus list so as to make it available for purchase by
 1ECA countries.
   It is important that as soon as possible a comprehensive program be
 developed with respect to the increased production of strategic ma-
 terials in Latin America. It is also important that this program be
 related to all other aspects of our economic relations"with these coun-
 tries. It may be anticipated that extreme reluctance will be encoun-
 tered on the part of Latin American governments to go in for wartime
 production programs except in the context of an integrated economic
 program which takes account of their essential wartime requirements
 and also of the adverse effect on their economies of an eventual termi-
 nation of these programs.
 Furthermore, it is important that programs which we stimulate in
 this field should not be required to be financed through loans. ARA

 13Annex 4 to NSC 68/1 does not have estimates of strategic materials procure-
 ment from any region.
 14Annex 10 to NSC 68/1 contains an overview of economic requirements for
implementation of the NSC 68 program.