Argentina joined other major grain exporting nations today in temporarily suspending new export licenses for wheat, corn, soybeans and other agricultural products in response to Friday's announcement that the United States will refuse to sell 17 million metric tons of additional grain to the Soviet Union.
In Melbourne, Prime Minister Malcolm Fraser, called a special Cabinet meeting for Wednesday to consider Australia's response to a request from Washington to support U.S. measures by not increasing sales to the Soviet Union to offset the grain -- mostly wheat and corn -- President Carter is denying the Soviets.
In Brussels, the executive commission of the Common Market suspended export subsidies and the granting of licenses for grain ard dairy product exports to the Soviet Union.
Carter announced the U.S. grain cutback on Friday as part of a package of reprisals being taken against the Soviet Union to protest the Soviet invasion of Afghanistan on Dec. 27.
It is considered likely that Argentina will attend a multilateral conference scheduled in Washington late this week that will seek to coordinate grain export policies among major agricultural nations.
Government sources in Buenos Aires ds said Argentina will deliver a million tons of wheat that the Soviet Union contracted for during the current fiscal year, which ends June 30. The Soviet Union is Agrentina's largest purchaser of wheat and corn, buying a third to a half of this country's annual production.
Argentina's grain board did not state ist reasons for suspending new export licenses. But traders said they believed the suspension was to avoid a run on corn, soybeans and other agricultural produce pending a formal government decision on joining in the U.S. cutback on grain sales and the reopening Wednesday of the Chicago Grain Exchange, which normally sets world prices.
Argentina's wheat crop already has been sold for this year and it would have been impossible for the Soviets to offset their lost U.S. wheat with purchases here, traders said. But they acknowledged that Argentina could have served as a conduit for "third party" shipments to the Soviet Union -- buying U.S. or Canadian wheat and reselling it to Soviets -- if the suspension had not been announced.
Jose M. Gogna, president of the Buenos Aires Grain Exchange, said in an interview that he viewed the U.S. suspension as a "preventive measure because Chicago is closed and nobody knows what will happen [to grain prices] when it reopens."
Other traders speculated that Argentina's military government may attempt to obtain political trade-offs from the Carter administration in return for holding down sales of corn, soybeans, sorghum, sunflower seeds and oil, that remain to be sold this year.
Among the trade-offs mentioned was an end to U.S. criticism of Argentina's human rights policies and toning down a critical, but still secret, report on the human rights situation here prepared by the Inter-American Human Rights Commission.
The traders, who represent the powerful agro-business sector of Argentina's economy, said it would make little sense for the government to disrupt its good trading and poltical relations with the Soviet Union without something from the United States in return.
News services reported these other developments:
Canada's External Affairs Minister Flora MacDonald said in Ottawa that Canada will not make up any shortfall in Soviet grain supplies caused by the U.S. decision to cut back on shipments to the Soviet Union.
Canadian shipments of grain to the Soviet Union for the crop year that ends in July are nearly complete, with only 300,000 tons of the 2.8 million tons the Soviets had contracted for still to be delivered. But MacDonald said Canada will review all its relations with the Soviet Union, including exchange visits and sales of technology.
In St. John's, Canadian Prime Minister Joe Clark told Newfoundland Premier Brian Peckford that canada is considering restricting Soviet fishing off the Newfoundland coast and banning Soviet aircraft from using Gander International Airport.
In Canberra, Australian officals expect the future of a $400 million wheat deal between Australia and the Soviet Union will be discussed at the meeting of grain-exporting countries in Washington this Friday or Saturday But the official said Australia is likely to support U.S. restrictions on grain sales to the Soviets.
But australia's wheat growers are concerned over what may happen to prices on the world market. Government ministers are expected to seek some guarantees that the United States will not cause a world glut by selling in the open market the American wheat that originally had been destined for shipment to the Soviet Union.