The Russians Have Come

Not since Czarist days has Russia bothered to foster relations with faraway Peru, or has Peru cared about Russia. Now the two are becoming the best of friends. Three weeks ago they agreed to exchange ambassadors. Last week, after twelve days divided between business negotiations and Latin hospitality, representatives of both nations gathered at Lima's graceful Torre Tagle Palace to sign a two-year trade agreement. The precise products and terms are so far uncertain; the Soviet Union, through European middlemen, is already purchasing sizable quantities of Peruvian fishmeal. But the meaning of the event was clear. Peru's Foreign Minister, Eduardo Mercado Jarrin, one of a spangle of generals who seized power last October, called the occasion "the end of an era in which our trade was channeled in only one direction."

Mercado meant his voice to carry, and it did. Washington is dismayed these days by the fact that once friendly, conservative military men like those in the Peruvian junta have become as vociferously anti-Yanqui as the left-wingers who spat at and stoned Richard Nixon a decade ago when he visited South America as Vice President. Peru's rulers have seized a U.S. oil subsidiary called International Petroleum Co., and refuse even to discuss reparations with parent Standard Oil of New Jersey. Indeed, the Peruvians claim that I.P.C. owes them another $17 million. Two weeks ago a perennial squabble over fishing rights flared again when a Peruvian navy vessel challenged U.S. tuna boats working within the 200-mile limit that Peru claims as territorial water. On earlier occasions, tuna men were released after buying fishing licenses. This time the Peruvians pumped more than sixty shots into one trawler. After U.S. officials inspected the porous hull, Ambassador John Wesley Jones submitted a $50,000 damage bill to Peru. Unless the I.P.C. situation improves, U.S.-Peruvian relations will come to a bitter climax in April when President Nixon is forced by the Hickenlooper Amendment to revoke $79 million in aid and preferential sugar purchases from Peru.

Economic Aggression. Peru's neighbors are scarcely happy about the I.P.C. controversy. As Argentine Economics Minister Adalbert Krieger Vasena observed last week, "Any dispute of this type affects all the countries and creates the impression that we do not favor foreign investment." Nor are they pleased by Peru's threat to charge the U.S. before the Organization of American States with "economic aggression" (the countercharge, quite properly, will be that the U.S. is willing to accept expropriation if need be but insists that Peru observe international law and make repayment). Yet, in a showdown, most would probably side with Peru because of the sad state of U.S.-Latin American relations, in spite of huge U.S. private investment. Once, other nations in the hemisphere could command U.S. attention by pointing to the threat of Castro subversion. Now, however, Cuban infiltration has failed1 and Castro has been muffled by the Russians as the Soviets seek peaceful expansion and influence in South America. One way for Latin politicians to make the U.S. notice is to go right ahead and parley with the Russians.

Russia's "Via Pacifica" diplomacy and the new responses of some South American countries to it have brought about a quantum increase in the Russian presence. The Soviets within the past two years have opened embassies in Colombia and Chile as well as Peru, and are now recognized by six South American nations. Even where there is no formal relationship, Moscow has been busy pushing rubles and culture. Total Russian trade with Latin America is growing and now amounts to $260 million, compared with $157 million in 1965. Moreover, in pursuit of diplomatic gains, the Russians graciously let the South

Americans have the long end of trade balances. The Soviets buy such commodities as bananas, coffee and cocoa on which these nations still depend and with which they too often glut Western markets.

Arms Are Different. Some experts doubt that this idyllic barter will last very long. Says Professor Ernst Halperin, a Latin America expert currently lecturing at Massachusetts Institute of Technology: "The Russians are not much interested in delivering economic assistance to countries they cannot control. But arms are a completely different question. They are the Russians' main instrument of expansion into an area, as they showed in Guatemala in 1954 and a year later in Egypt."

If the Russians were to begin arms shipments--they have already offered civilian aircraft--the U.S. response would be immediately hostile. But until that point is reached, the new Soviet amiability campaign seems to have the U.S. baffled. To the irritation of his southern neighbors, President Nixon neither made traditional mention of them in his Inaugural address nor has so far chosen an Assistant Secretary of State for Inter-American Affairs. Last week the President did announce that New York's Governor Nelson Rockefeller, who was a State Department Inter-American Affairs officer under F.D.R. and today maintains a Venezuelan ranch, would make a series of visits "to listen to the leaders" and consult on common goals. It will likely be some time before even Rockefeller can make sense and suggestions out of the situation. Meanwhile, the ubiquitous Russians keep at it. The Soviet trade delegation in Lima moved on to Quito last week to discuss an agreement covering Ecuadorian bananas. In Uruguay, Vice President Alberto Abdala packed his bags for a flight to Moscow to sign a $20 million trade pact.

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