811.20 Defense (M) Brazil/4844: Telegram
The Secretary of State to the Ambassador in Brazil (Caffery)
3305. Embassy’s telegram no. 4127, August 27, 10 p.m.56 The plan for distributing Brazilian miscellaneous rubber manufactures proposed in the Department’s instruction No. 4876 of August 12, 194357 was the result of discussions here with Korkegi in consideration of the preliminary proposal contained in the Embassy’s despatch no. 11958 of July 13, 194358 and with the concurrence of other interested agencies.
The original Brazilian proposal which is now again presented was considered only to be rejected in the belief that it was impracticable. While it is desired to give Brazil every opportunity to export its excess rubber manufactures, it is not desired to force trade into unnecessarily unnatural channels. Information is not available here, and it is doubted that it exists, to indicate what items of the hundreds involved could satisfactorily be supplied from Brazil to specified countries. It must not be forgotten that this trade is much more technical and exacting than the trade in tires.
Therefore, the plan set forth in instruction no. 4876 was proposed as a transitional one which would give Brazil full opportunity to develop foreign markets at least partially on a commercial basis. Also, the licensing agency of this Government would undertake not to authorize shipments which would interfere with any Brazilian commitments such as the reported agreement with French Guiana (Embassy’s despatch 1195159).
When pressing Brazil to accept our proposed plan, the Embassy may point out that operations under this plan should soon indicate the natural flow of trade which in turn will permit adoption of Brazil’s proposal of two distinct allocations for each country. But to adopt Brazil’s proposal now would, it is firmly believed, cause only international confusion and general criticism.
Our plan includes the desire to have Brazil announce the entire allocations for the South American countries, even though part may be supplied from the United States. With the announcement, Brazil may desire to specify what items will be available from Brazil and recommend in behalf of both governments that orders for these items be placed in Brazil.