560.AL/8–347: Telegram

The Consul at Geneva ( Troutman ) to the Secretary of State

secret

808. Fr ITO 165. Fr ITO 15089 and following. For CP and personal attention Blaisdell,90 Commerce and Wheeler,91 Agriculture. Brazilians have presented their case for tariff rate increases to small Conference Subcommission which agreed matter should come before entire Conference August 8. We have studied matter further in attempt to find some solution which would permit increases in low specific rates which would not affect our trade adversely and permit conclusion of agreement in the absence of which and following hinted denunciation of present US-Brazilian trade agreement Brazil would be free to increase rates much beyond proposed 40 per cent.

Trade Agreements Commission today approved informing Brazilians that we would recommend to our Government acceptance of following proposal, it to be understood that we were not committed until such acceptance obtained.

1.
We would agree proposed specific duty increases in cases where resulting ad valorem equivalent would on basis of latest available unit values, still be moderate and less than prewar (big bulk of imports from US would, after increase and on basis latest available unit values, have ad valorem equivalent 20 per cent or less with most under 10 per cent).
2.
There should be excepted from increases those products whose resulting ad valorem equivalent would be higher (even though less than prewar) and we would attempt negotiate further duty reductions in these.
3.
Depending how successful we were in point 2, we would or would [Page 431] not withdraw certain Schedule II concessions on items on which it had been difficult for us to offer duty reduction on bindings.
4.
A formula would be provided whereby Brazilian specific duties affected by increases would be reduced as postwar prices declined so as to maintain as maximum the ad valorem equivalents ultimately negotiated here.

. . . . . . .

If our proposal not accepted by Brazilians, then our position would be to oppose acceptance by conference of their plan.

Comment on foregoing desired soonest.

Sent Dept 808, repeated to Rio. [ITO.]

Troutman
  1. Department telegram 765, July 24, p. 428.
  2. Thomas C. Blaisdell, Director, Office of International Trade, Department of Commerce.
  3. Leslie A. Wheeler, Director, Office of Foreign Agricultural Relations, Department of Agriculture.