Foreign Relations of the United States Diplomatic Papers, 1934, The American Republics, Volume IV

611.3231/648

The Brazilian Embassy to the Department of State¹⁴

undated

[Translation]

(Observations submitted, in a personal way, to Mr. B. S. Welles¹⁵ and Mr. F. B. Sayre¹⁶)

1. The American proposal, presented in October, 1933,¹⁷ and consisting of twelve articles and two lists of products, involves, chiefly, tariff matters and some trade norms and supplementary rules for exchange.

2. The Brazilian tariff, approved by Decree No. 24,343, of June 5, 1934, and the acts flowing from Decrees Nos. 24,023 of March 21st, 24,173 of April 25th, 24,234 of May 12th, 24,324 of June 1st, 24,508 and 24,511 of June 29th, 24,577 of July 4th and 24,788 of July 14th, all of the current year,¹⁸ relative to exemptions and reductions of duties, simplification of standards in the analyses of imported food products and beverages, warehousing, port charges, use of equipment for loading and unloading at ports, replacement by one single tax of the 2 percent gold tax and the other additional taxes in effect, meet, as far as has been possible, the suggestions made in the draft referred to under number 1.

3. The study of our foreign commerce within the past twenty years shows that, under one same tariff, the commercial interchange of Brazil has suffered great fluctuations, characterized at times by great depressions, as is shown by the annexed tables,¹⁹ referring to Brazil’s total trade and to the interchange with the United States of America in the period from 1913 to 1933.

4. The logical conclusion, the obviousness of which cannot fail to be decisive to the observer, is, that the tariff cannot be considered the predominant cause, but that other causes interfered in our trade, producing those bad effects.

5. A commercial treaty which would regulate only the customs regime between our countries would not produce, therefore, the results sought, since the tariff cannot be held responsible as the sole cause of the depression in the trade between us.

6. A treaty which would settle the tariff question would bring some advantages, but would not be even an earnest of the return to the volume and value of our former trade, and still less would it open to our two peoples an era of more active and easier relations, such as it is becoming urgent to inaugurate between us.

7. Brazil maintains as the rule of her international economic life the most-favored-nation clause, having treaties with 44 countries, including the United States of America, by virtue of the exchange of notes effected at Washington, on October 18, 1923,²⁰ on the initiative of this country.

8. Brazil, in the midst of the régime of autarchy followed by almost all the great nations, injured by the reduction of the gold-value of her trade, on account of the universal monetary anarchy and the general drop in prices, has taken pains not to create difficulties, but rather to facilitate and increase her export and import trade. She did not adopt quotas, did not establish preferences of exchange, and reformed her customs and port laws, making imports cheaper and easier to make.

9. She cannot, therefore, desire to take another course without having the assurance of being able to attain the objectives for the sake of which she has already made such heavy sacrifices.

10. The purpose of the American Government, repeated in the statements made at our last conference, is to respect, in its international life, that doctrine and that practice.

11. The task, therefore, becomes easy to achieve in our understandings since we are not aiming at bringing about an equilibrium of commercial balances nor at protecting autarchies nor at shielding economic nationalisms but at favoring and increasing interchange by making an agreement with such provisions and such norms as would be capable of putting into concrete form these broad and fruitful purposes.

12. Brazil, within the same general lines, being animated particularly by the desire to follow this policy with the United States, is disposed:

a) To examine any new American aspirations in relation to her tariff, port and commercial legislation;

b) To study and to establish practical, political or legal measures which would assure the increase of our interchange by giving it broad and secure bases.

13. In the spirit of forwarding the studies already begun, it already appears that the treaty should embrace:

1) Transportation, postal and telegraph questions;

2) Questions of public and private credit;

3) Guarantees to commerce, capital and labor;

4) Any others which directly or indirectly would favor the politico-economic relations between the two countries.

14. Within these general lines, the Government of Brazil is disposed to examine and to decide, beginning immediately, the question of the American commercial proposals to the end of regulating, by means of an appropriate mechanism, payment for new imports, and to establish rules guaranteeing the normal play of commercial life.

15. The Government of the United States of America having taken the initiative, the Brazilian Government awaits new suggestions in order to examine them and in order, in its turn, to present its own suggestions, and it gives the assurance that all its efforts will be directed in the sense of concluding with the United States of America a treaty that would be, in the economic field, the expression of its traditional and never-broken friendship.

14. Undated memorandum received in the Department about October 5, 1934.
15. Sumner Welles, Assistant Secretary of State.
16. Francis B. Sayre, Assistant Secretary of State.
17. Memorandum of October 30, 1933, to the Brazilian Ambassador, Foreign Relations, 1933, vol. v, p. 23.
18. Diario Oficial, March 24, 1934, p. 5627; May 2, 1934, p. 8340; May 16, 1934, p. 9291; June 18, 1934, p. 11692; July 10, 1934, pp. 13789 and 13797; July 6, 1934, p. 13493 and July 16, 1934, p. 14361.
19. Not printed.
20. Foreign Relations, 1923, vol. i, pp. 461–463.