AND LIBERATION IN LATIN AMERICA
of the 1980 Conference of the Canadian Association of Latin American and
by J. Nef, Vice President CALACS
The Roots of Dependence
the current issue of the
American Research Review
the British historian D.C.M. Platt has raised objections to the interpretation
of nineteenth-century Latin American history presented by adherents of the
With regard to the years up to at least 1850, Platt argues that Latin America
was isolated and removed "from the world economy - 'independent' and
self-sufficient against its will".
As far as external trade is concerned, Platt has the following to say:
America could sell nothing to Europe so that it could buy nothing in return.
After that first, furious activity that accompanied the reopening of blockaded
markets, Spanish America retired over the edge of the periphery. It remained
outside world markets to any significant degree, for the first half century of
only was trade insignificant according to Platt, but so also were financial
flows, as London markets were closed to the Spanish American governments, by
virtue of their loan defaults, from the mid-1820's to the end of the 1850's.
Even, in his view, if these markets had been open to the Spanish American
countries, they would have been unlikely to have made recourse to them:
were always short of money, but they wanted two to three hundred thousand
pounds at a time, at once and in cash. In Latin America these needs were best
satisfied at home . . . such loans, in any case, were too small and ill secured
to be quoted on the (London) Stock Exchange.
conclusion is obvious - Spanish America, during the first half century of
political independence, stood outside the currents of world trade and finance.
leads Platt to reject the
view of the new Republics and to question what “finally brought Latin
America into contact with the world economy?”
and Stanley Stein in the same issue of the
American Research Review
engage in an exchange with Platt over his interpretation of the data on the
value and relative importance of trade between Latin America and the United
On the financial side, one cannot dispute the absence of new lending, but one
must not neglect the simple fact that loans received must eventually be repaid,
about which we shall speak briefly later. It is our contention, however, that a
search for the
of modern dependence in Latin America should not focus either exclusively or
obsessively on the magnitude of exports and imports or on the size and
continuity of international financial flows. That search should be able to
provide an answer to the following paraphrase of Platt's query: Under what
conditions was Latin America brought into contact with, or incorporated into,
the world economy? To answer that question requires a return to the no-longer
fashionable study of diplomatic history. We shall try to demonstrate, in the
limited space available to us, that the initial treaties signed between the
United Kingdom and the various Latin American countries, and we will speak here
primarily of Mexico, Costa Rica and Guatemala, established the roots, or might
one say the ruts, of dependence. It could be said that the treaties, by both
proscribing and prescribing, led to the establishment of dominant channels or
least-resistance paths of commercial intercourse from which flows tended over
the decades not to be deflected.
recent years we have heard growing calls for a new international economic order
and for a new international division of labor. One of the foremost proponents
of such a reordering, Raul Prebisch, writing in the early 1960's, introduced
the concept of "implicit reciprocity"
to be applied to tariff negotiations: de facto reciprocity in outcome was to be
abandonment of equivalent concessions. By reducing tariffs on products of
interest to the less developed countries (LDC's), the industrial countries
would gain, insofar as the increased LDC revenues from exports would perforce
be spent in the industrial countries. By arguing that discriminatory means
could achieve reciprocal, mutually-beneficial ends, Prebisch struck at the
heart of a system of international agreements, which predates Bretton Woods and
the General Agreement on Tariff and Trade (GATT) of the 1940's by more than a
century; a system which the United Kingdom had a major hand in extending to the
newly independent Latin American republics in the first one-half of the
nineteenth century. We speak, of course, of the system of most-favored nation
agreements which are generally embodied in bilateral treaties of Friendship,
Commerce, and Navigation. The signatories of these documents promise to accord
to each other's nationals treatment equal to the best given to the citizens of
any other country. Some treaties occasionally go beyond this and concede
treatment for foreigners; in so doing a country would forego its ability to
provide incentives aimed at stimulating local activities. The weak in the world
of the strong
may enter voluntarily into such compacts through inexperience and/or in order
newly won political independence.
between weak and strong are obviously not a new chapter in the affairs of
states and legal commentators have spoken of the problem of de jure equality
and de facto inequality since at least the time of Samuel Pufendorf in the
seventeenth century. Pufendorf spoke explicitly of what he called "unequal
treaties", which he deemed to exist "when the things promised by the two
parties are unequal, or when either party is made inferior to the other."
For Pufendorf promises were unequal if they were not in proportion to the
strength of the contracting parties.
More recent writers suggest the absence of “equality of capacity”
as being sufficient for the existence of an unequal treaty regardless of
whether an agreement was freely concluded.
Nineteenth century diplomats, including those from Latin America, were clearly
aware, in the words of James Buchanan, then Secretary of State of the United
States, in speaking of the US treaty of 1825 with the Federation of Central
America, that some treaty provisions "though reciprocal in terms, would prove
unequal in their operation."
us examine some of the provisions of the early British treaties with our
southern neighbors, so that we may be clear as to the nature of the reciprocal
concessions made. Britain signed treaties of Commerce in the first one-half of
the nineteenth century with the following states of the Western Hemisphere: the
United Provinces of Rio de la Plata (1825), Colombia (1825), Mexico (1826),
Brazil (1827), Venezuela (1834), the Peru-Bolivian Confederation (1837),
Bolivia (1840), Texas (1840), Uruguay (1842), Costa Rica (1849), Guatemala
(1849), Dominican Republic (1850) and Peru (1850). Although some specifies
differ, the main provisions of these treaties were the same, as will be
illustrated by an examination of the British treaties with Mexico, Guatemala
and Costa Rica, the latter two having been signed almost one-quarter of a
century after the Mexican treaty.
three treaties - those between the United Kingdom and Mexico, Guatemala and
Costa Rica - contain provisions for the reciprocal granting of most favored
nation treatment for goods traded and for access of ships to ports and for the
reciprocal granting of
treatment to the ships and cargo of the contracting parties, to merchants,
citizens and subjects and to the disposal of personal estates. Taken together,
these provisions had the effect of orienting the external economic relations of
the Latin American signatories toward the United Kingdom, the dominant
industrial economy of the time, and away from any opportunity to forge bonds
with neighbors. These treaties also had the effect of retarding the development
of local commerce and navigation.
us consider first the implications of the most favored nation treatment for
goods by contrasting it with what is known as the Bello Clause (
Bello), which is named for Venezuelan born Andrés Bello, the author of
several works on international law, who served for many years as an advisor to
the Chilean Ministry of Foreign Relations. The fullest expression of the Bello
Clause is contained in Article 2 of the Chile-United States Treaty of Peace,
Amity, Commerce and Navigation of 1832 and in its additional Article I of 1834.
The latter stipulated that Chile's existing or future trade and navigation with
all the new American nations which were formerly under Spanish rule, regardless
of the alterations they may experience in constitution, name and boundaries,
were to be exempt from most-favored nation treatment.
struggle to implement Bolivar's vision of close links between the Spanish
American republics was already doomed well before the Chile-U.S. Treaty of
1832. How could Mexico establish preferential relations with Chile when in its
treaty of 1826 with Great Britain it had already granted unconditional
most-favored nation treatment to trade with the latter? With each successive
treaty embodying most-favored nation provisions signed by Latin American
nations with Great Britain, the United States, France and others, the
opportunity for making concessions to one's neighbors was foreclosed, in favor
of a uniform international system in which "perfect equality and the most exact
placed the weak at the advantage of the strong.
effect of the various treaties of commerce was to close off certain options and
favor others. We shall merely advance the hypothesis here, without attempting a
rigorous demonstration, that most favored nation provisions were an important
obstacle in the way of the reuniting of the Republic of Central America after
its dissolution in 1839, Mario Rodríguez puts the matter differently:
Central American liberals struggled to re-establish a republic . . . their
efforts again floundered in the quagmire of Central American politics and the
rivalry of Great Britain and the United States for control of the interoceanic
passageway through Nicaragua . . . the centrifugal tendencies of Central
American society had triumphed over the forces of modernization.
would suggest that the view of Rodríguez can be stood on its head: it
was not the centrifugal tendencies which "triumphed over the forces of
modernization," but rather the forces of modernization, as manifested in
standardized treaties, which reinforced centrifugal tendencies. Costa Rica and
Guatemala both agreed in 1849, as Mexico had in 1826, to grant most favored
nation status to Great Britain and to make the similar grant to the United
States in articles containing identical wording in 1851 and 1849, respectively.
To underline the point being made: by these treaties Guatemala pledged itself,
for example, to levy the same tariff on a particular good, whether it came from
France, the United States, Great Britain or neighboring Honduras. The politics
and diplomacy of foreign intervention have heretofore been a focal point of
scholarly attention, we would suggest that the diplomacy of business-as-usual,
while seemingly more mundane, should not be neglected. Three of the commercial
treaties just referred to were signed in the relatively short period between
the British occupation of San Juan de Nicaragua on the Mosquito Coast in 1848,
an event which is said to have "strengthened the hand of unionist liberals" in
and the Clayton-Bulwer Treaty of 1850.
noted above, these same treaties called for grants of national treatment as
well. Specifically Mexico, Costa Rica and Guatemala agreed on a reciprocal
basis with Great Britain to levy no higher port charges on each other's ships
than are payable by national ships. All agreed to impose the same duties on
goods carried on the vessels of the signatory as are imposed on national ships
and all agreed that British merchants, commanders of ships and other British
subjects shall have full liberty to manage their own affairs. At the time of
the signing of the U.K.-Mexico and U.K.-Guatemala treaties, the British
Navigation Acts, which dated back to 1651 were still in force and required that
the nationality of the vessels be precisely determined for purpose of taking
advantage of the proffered national treatment. Mexican and Guatemalan vessels
were to receive national treatment in British ports, while British vessels were
to receive national treatment in Mexican and Guatemalan ports. To quality as a
Guatemalan vessel, however, a ship must have been built in Guatemala, have been
the bona fide wholly-owned property of one or more citizens of Guatemala and
have had the master and three-quarters of the crew as citizens of Guatemala.
both the cases of Mexico and Guatemala, the British acknowledged in additional
articles that it would not be possible for Mexico and Guatemala, given the
present state of their shipping “to receive the full advantage of the
reciprocity established" in the treaties.”
As a supposed remedy, Mexico was to be allowed ten years during which vessels
built anywhere could qualify as Mexican if ownership, master and crew
conditions were met. Guatemala was to be given seven years in which to build
its merchant fleet sufficiently to take "full advantage of the reciprocity
established," Mexico was granted a further concession which was denied
Guatemala: during those same ten years Mexico would be allowed to charge higher
duties on goods carried on British bottoms than on goods carried on Mexican
vessels. However, whatever concession the British gave with the right hand,
they also took back with the left: exact
reciprocity of course required that goods carried in Mexican vessels arriving
in British ports were to be subject to duties levied on ships of the
most-favored nations, but not to the same duties levied on goods carried on
British ships. It is probably superfluous to observe that the granting of a
seven or ten year period to a new nation to put its infant shipping industry on
a competitive basis with the merchant fleet of the world's dominant seafaring
nation was at best an empty gesture. Those Latin American nations that granted
national treatment to foreign vessels and foreign merchants forfeited their
ability to give meaningful incentives to native shipping and commerce. In fact
the treaties actually accorded foreign merchants a privileged position in that,
unlike nationals, they were exempt from compulsory- military service. These
provisions were of course reciprocal, but, even without supporting evidence, it
is reasonable to presume that Costa Rican merchants in Britain were less
prominent than British merchants in Costa Rica.
this brief paper we cannot hope to do justice to the interplay of British
diplomacy and the interests of British bondholders, but given D.C.M. Platt's
dismissal of financial considerations as being irrelevant during the second
quarter of the nineteenth century, we feel some comment is appropriate. Lord
Palmerston described the intervention of the British Foreign Office on behalf
of the bondholders as having been limited to instructing envoys to make
"earnest and friendly, but not authoritative, representations" to foreign states.
A single instance may suffice to demonstrate this to be a considerable
understatement. On November 14, 1840, one day following the signing in London
of a Treaty of Commerce and Navigation between Britain and the Republic of Texas,
Palmerston and General James Hamilton of Texas signed a Convention by which
Texas promised to take upon herself 1,000,000 of the capital of the pre- 1835
foreign debt of Mexico on the joint condition that Mexico accept Britain's
offer of mediation within thirty days of learning of the Convention and that a
Treaty of Peace be concluded within six months.
Platt has argued that British treaties were "one-sided in effect, if not
intention. But to later generations the position could be reversed".
Historical time is not reversible, however. Opportunities lost can never fully
be gained. Nations balkanized can rarely be reconstituted.
embodying most favored nation and national treatment clauses can be viewed as
having assisted in establishing the monopoly of a world system of
inequality in which the weak surrendered the tools which might otherwise have
been at their disposal for nation-building. During the century that followed,
conditions were not reversed, but rather exacerbated. It has only been in the
last two decades or so that a modest beginning at a reversal through the
creation of a system that would take explicit account of the limited capacity
of the weak has occurred. It is only now, following a long history of lost
opportunities, that serious consideration is being given to creating a world
system embracing the principle of employing
inequality as a means to foster
D.C.M. Platt, “Dependency in nineteenth-century Latin America: An
American Research Review
(LARR), XV (no.1, 1980), 113-130.
S.J. Stein and B.H- Stein, "D.C.M. Platt: The Anatomy of 'Autonomy'," LARR, XV
(no. 1, 1980), 136-38 and D.C.M. Platt, LARR, XV (no. 1, 1980), 147-49.
United Nations Economic Commission for Latin America,
a Dynamic Development Policy for Latin America
(New York, 1963).
The phrase is borrowed from the title of a recent book: R.L. Rothstein,
Weak in the World of the Strong: The Developing Countries in the International
(New York: Columbia University Press, 1977).
Treaties in International Law
(Stockholm, 1970), p. 108.
jure naturae et gentium libri octo, vol.II. The Translation of the Edition of
trans. C. H. Oldfather and W.A. Oldfather (London, 1934), p.1331.
Noxari, p.111 and E.D. Dickinson,
Equality of States in International Law
(Cambridge, Mass., 1920), p.150.
Buchanan to E. Hise, Washington, June 3, 1848 in W.R. Manning, ed.,
Correspondence of the United States: Inter- American Affairs
1831-1860. III (Washington, 1933), 33-34.
Samuel Lamed to Henry Clay, Santiago, November 1, 1827 in Manning, ed.,
Correspondence of the United States Concerning the Independence of the
II (New York, 1925), 1122.
(Englewood Cliffs, 1965), p.49.
Lewis Hertslet, ed., A Complete Collection of the Treaties and Conventions and
Reciprocal Regulations between Great Britain and Foreign Powers (London,
1840-1922), III, 254-56 and VIII, 528-29.
"Circular addressed by Viscount Palmerston to Her Majesty's Representative in
Foreign States, respecting the Debts due by Foreign States to British
Subjects," Foreign Office, January 1848 in Platt,
Trade and British Foreign Policy
1815-1914 (Oxford, 1968), p.398.
Hertslet, VI, 807-811.
Trade and Politics