Before the nineteenth century, when South America was part of the Spanish and Portuguese empires, there were limited opportunities for either Britain or the US to develop extensive trade with the region. The contraband trade that did take place was generally exploited to a greater degree by Britain, but such trade was always restrained by the colonial authorities in Spain and Portugal. Indeed, it was, at least in part, the desire for greater trade with South America that led both the US and, albeit in a more limited fashion, Britain to support the various struggles for independence which took place throughout Latin America during the first quarter of the nineteenth century.

It was towards the end of these independence struggles, on 2 December 1823, that US President James Monroe announced his famous doctrine towards Latin America. This stated that there should be no future European colonisation in the western hemisphere; that the US was opposed to the more general extension of European influence in the continent; and that the US would itself remain free from European affairs, except where US interests were directly concerned. Notwithstanding the implicit assertion of US supremacy in Latin America contained in Monroe's speech, it was in fact Britain that went on to dominate the commerce of the region throughout the nineteenth century. Britain established important export markets in South America and became the principal customer for many of the region's primary raw materials. British interests also invested heavily in the region, particularly in public utilities such as the Argentine railways.

The alliance between the United States and Great Britain during the Second World War continues to be a source of great interest to scholars of Anglo-American relations. While in one sense a temporary pact based on the shared purpose of defeating the Axis powers, the Anglo-American alliance during World War II subsequently turned out to be of much greater significance. As well as forging the so-called ‘special relationship’ between the US and Britain, diplomacy between the two countries during the war was also the principal forum in which planning for the post-war era took place. Nowhere was this more so than in the sphere of commerce. Negotiations took place both at the highest levels of government, over the general principles that would shape the post-war global economy, and throughout the lower rungs of governmental bureaucracy, concerning specific industries and geographic regions in which both countries had significant interests.

Inevitably, Anglo-American economic diplomacy took place within the broader context of the changing economic fortunes of the two powers during the Second World War. The experiences of the US and Britain in this respect were vastly different. The US was not subject to the kind of economic hardships suffered by all of the other major belligerents in the war. On the contrary, the demand for weaponry created by the outbreak of war stimulated the US economy, finally lifting the country out of the Great Depression. Between 1940 and 1945 US gross national product rose from $99.7 billion to $211.9 billion.

Throughout the autumn of 1942 and into the spring of 1943 it became clear that, notwithstanding the efforts of the internationalists to promote multilateralism in Latin America, there remained powerful forces within the Roosevelt administration and the broader US establishment which posed a direct challenge to this goal. This challenge came from a wide variety of sources. Cumulatively, the influence of Latin Americanists within the State Department, temporary government agencies and US business interests in the region represented a parochial faction within the US, focused on Latin America and largely impervious to how this region related to broader global issues of post-war planning. While it may not have been their intention, the policies pursued by these groups did in fact threaten to exclude British interests from South America. As such, this chapter seeks to show that the promotion of multilateralism in Latin America that had been attempted by internationalists was continually undermined by the persistence of forces with different imperatives.

The most important of these were the Latin Americanists in the State Department. This group was led by Sumner Welles and also included Laurence Duggan, assistant secretary for political affairs, and members of the Division of American Republic Affairs. Imbued with an in-depth knowledge of Latin America and a sensitivity to the politics of the region, this group were at the forefront of guiding US Latin American policy during World War II. In claiming this region as their own exclusive policy domain, they tended to formulate policy towards the region without reference to broader geopolitical concerns.

With British fears of the country's interests being excluded from South America firmly re-established by the spring of 1943, government departments in London embarked upon a lengthy reformulation of British policy towards Latin America in the broader context of Anglo-American relations. Eventually, the policy pursued by the Churchill government was to call upon the US to agree to what the Foreign Office termed a ‘self-denying ordinance’ in Latin America, which would ensure that neither country secured commercial advantage at the expense of the other while wartime conditions prevented free and fair competition.

Furthermore, in making its case to the Roosevelt administration, the British government framed its call for a self-denying ordinance in the context of the multilateral trade programme, which had been continually advocated by the Roosevelt administration as the basis for the post-war economic order. Specifically, the Foreign Office made the argument that continued British access to the markets of South America – which a self-denying ordinance would be essential in preserving – must be a constituent part of an economic world order based on equal access to markets and resources. Without access to such markets, Britain would lack the necessary balance of payments to be able to participate in a multilateral system. In this sense, the British call for a self-denying ordinance in Latin America demonstrates that in this region it was Britain that took the lead in promoting the establishment of a multilateral economic system for the post-war era.

The focus on Latin America, by both the US and Britain, gradually declined as the war came to an end. In January 1945 the wartime economic diplomacy between the two countries entered its final phase and there was a renewed focus on securing a general agreement aimed at reducing barriers to trade and establishing an international organisation to govern post-war commerce. Focus on these broad issues meant that concern over Anglo-American economic diplomacy in South America was largely usurped. More generally, European affairs increasingly came to dominate the attentions of US officials, to the detriment of sustained and concerted policy formation towards Latin America. When foreign competition in Latin America was considered by US officials, it was increasingly the Soviet Union that was viewed as the principal competitor in the region, rather than Britain. So what conclusions can be drawn from the relations between the US and Britain in South America that took place during the Second World War?

The basic conclusion of this book is that Anglo-American relations in South America during the Second World War failed to conform to the pattern of economic diplomacy whereby the US advocated multilateralism against British opposition. It was, in fact, Britain that eventually became the chief proponent of multilateralism in South America. Explaining the British promotion of multilateralism in this region is relatively straightforward. Following a lengthy evaluation of Britain's short – and long-term interests in South America, government departments formed a consensus around the belief that it was the promotion of such a system that would best serve those interests.

On 7 December 1941 Japanese aircraft launched an attack on US battleships anchored at Pearl Harbor, resulting the next day in a declaration of war by the US against Japan. Three days later Germany declared war on the US. With the US a fully fledged belligerent in a global conflict, a new type of partnership between the US and Britain, unprecedented in the history of Anglo-American relations, ensued. Throughout 1942 the unity of purpose between the two countries was accentuated by the perilous military threats faced by the Allies. Despite South America's geographic isolation from the European and Asian theatres of conflict, one effect of the new accord between the two countries was moves towards cooperation and collaboration in commercial matters between the US and Britain in the region. This cooperation came in the form of aligning the two countries' blacklisting policies in South America, and collaborating in the supply of essential goods.

However, cooperation between the US and Britain in the commercial affairs of South America was continually hampered throughout the first half of 1942 by conflicting trends on both sides of the Atlantic. For Britain the new co-belligerent status of the two countries removed the impetus to placate US criticisms of British trade practices that had actuated British policy during the period of US neutrality. In its place British officials sought to forge a partnership with the US which would entail an active role for Britain in directing the economic affairs of Latin America.