The Brazilian Embassy to the Department of State
The Brazilian Government since 1903 has issued annually a decree granting a reduction of 30% on the import duties on American flour and of 20% on the majority of the products which Brazil imports from the United States.
The Brazilian Government has never refused to grant such favors. The annual decree generally has been issued immediately after the [Page 457] American Government, through its Ambassador at Rio de Janeiro, has asked for its renewal.
In the beginning of this year, in a conversation at the Ministry of Foreign Affairs in Rio de Janeiro on the technical studies made there every year for the purpose of establishing the commercial relations of Brazil on a foundation of a true reciprocity, the American Ambassador declared spontaneously that he was going to ask instructions of his Government to propose to Brazil an Agreement for twelve months, renewable every year, on a basis of reciprocity, which would better guarantee the customs favors that American products have been enjoying.
A few days ago, instead of this proposition, the American Ambassador presented to the Ministry of Foreign Affairs a Memorandum in which the American Government declared that it would not ask or make any effort to obtain customs favors of any kind from any foreign Nation, and hoped that the Brazilian Government would accept the only customs policy which the American Government with its new Tariff Law could follow in its commercial relations with Brazil and all the other countries of the world, excepting Cuba,—a policy of most-favored-nation treatment.
Entering into details, the American Government asks in this Memorandum the formal acceptance by Brazil of the making of a modus-vivendi, preparatory to a Treaty, and adds that if this policy is adopted, every customs favor granted to any other nation by Brazil would be automatically and unconditionally granted to the United States, considered by Brazil a most-favored-nation, in reciprocity for the same treatment of Brazilian products in the United States, exception only being made of the special favors given by this country to Cuba.
The Brazilian Government accepts the friendly explanation of the Government at Washington in the said Memorandum and understands that the new American point of view is determined by the recent revision of its Tariff. The Government receives with due appreciation the declaration of the Memorandum, and understands that the United States already gives unconditionally to Brazilian products most-favored-nation treatment.
Brazil is ready to accept in its commercial relations with the United States the new policy of reciprocal most-favored-nation treatment proposed by this country.
The method of adopting this policy in Brazil will be the issuance of a decree for the twelve months of our fiscal year, which decree shall be renewed annually so long as this policy is maintained, granting to the United States for that period all the customs favors [Page 458] which are granted to the products imported by Brazil from other countries.
As to the manner of the adoption of this policy by the United States in regard to Brazil, the Government at Washington will of course inform the Brazilian Government, and no doubt will explain, also, why it has suggested a modus vivendi, preparatory to a Treaty on this subject.
In any case, however, the Brazilian Government would like to know the opinion of the American Government as to the best way of bringing about an understanding between the two countries in this matter.
With this answer, which shows the satisfaction with which Brazil has received the Memorandum of the American Embassy at Rio de Janeiro, the Brazilian Government in this Memorandum of its Embassy at Washington wishes to make two declarations on the subject.
The first is to emphasize that Brazil accepts the new customs policy for the purpose of demonstrating its good-will towards a friendly country and sister Republic, and of affirming, in a practical way, its disposition to meet all its wishes for the most intimate commercial bonds.
The second one is a consideration to which Brazil in a most friendly spirit calls the attention of the Government at Washington. The Brazilian Government has in mind the great inconvenience of interrupting at the present time the customs favors which Brazil for twenty years and without the slightest interval has granted to the United States.
Politically, this interruption may provoke comment and international misunderstanding with disagreeable effects upon the public opinion of the two interested countries.
Commercially and economically, this interruption will diminish American exports to Brazil,—an effect which would occur under such conditions even without the present increase in the value of the dollar. It is sufficient to remember the lower freight from Argentina to Rio de Janeiro, which even now almost prevents the competition of American flour in the south of Brazil, notwithstanding the present reduction of 30%.
All this seems to advise against the interruption of the said concessions of customs favors to the United States.
Brazil firmly believes that the best way to sell a greater quantity of its products to North America is to favor, more and more, the buying of American products in its territory. Holding this opinion, the Brazilian Government would like to be able to agree with the Government at Washington on some understanding that would not [Page 459] interrupt the customs favors which are now granted to American products.
An understanding in this sense must have, however, the character of reciprocity, without which Brazil would not be able to conveniently regulate its customs policy towards the other countries with which it also maintains commercial relations.
As a proof, however, that Brazil is only looking for the best way of making its relations with the United States more close, the Government at Rio de Janeiro is disposed to accept for that reciprocal understanding any favors or facilities, even not connected with the Tariff, which the Government at Washington would wish to offer as a compensation for the continuation, of the favors of the Brazilian Tariff.