What seems to be the aim of United States diplomacy, and what seems to be an attainable aim, is that very gradually the countries of South America will be brought closer to the northern Republic, coaxed by a system of reciprocity in trade which would offer them advantageous terms. Commercial union would thus pave the way to a closer political union. Such a development would be a very serious detriment to British trade interests, and to the British position in the Pacific. British export trade with Latin America is very considerable, amounting to some £60,000,000 worth a year. The two greatest contributors to the total are Brazil (£16,426,000 in 1910) and the Argentine Republic (£19,097,000 in 1910). Their communications with Great Britain will be left unchanged with the opening of the Panama Canal: and that event consequently will not strengthen American influence there. The same remark applies to trade with Mexico (£2,399,000 in 1910), with Columbia (£1,196,000), with Uruguay (£2,940,000). But trade with Peru (£1,315,000) and Chili (£5,479,000) will be affected by the canal bringing New York competition nearer. There would, however, be a very serious position created for British trading interests if a proposal were carried out of an American preferential tariff system embracing the United States and Latin America. The total of British trade with Latin America (about £60,000,000) is nearly one-third of the total of British foreign trade (£183,986,000 in 1910), and is more than half the total British trade with British possessions. Moreover, it is almost exclusively in lines in which United States competition is already keenly felt. A tariff preference of any extent to the United States would drive British goods, to a large degree, out of the Latin-American market. The position of Latin America in its effect on the dominance of the Pacific may be summed up as this: racial instability will probably prevent the Latin-American nations from federating and forming a great Power; the veto of the United States will prevent them from falling into the sphere of influence of any European Power; their jealousy and distrust of the United States, whether it be without or with reason, will stand in the way of their speedy absorption in an American Imperial system. But that absorption seems ultimately inevitable (though its form will leave their local independence intact). Its first step has been taken with the Monroe declaration; its second step is now being prepared with proposals for trade reciprocity. FOOTNOTES: [5] A dispatch from Washington, February 7, 1912, stated: