South America: The Russians Have Come

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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 Jarrín, 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.