The Acting Secretary of State to the Brazilian Ambassador (Lima e Silva)

My Dear Mr. Ambassador: I acknowledge with thanks the receipt of your letter of August 1, 1933, regarding the conversations, to which we are looking forward, as to the possibility of concluding a commercial agreement between our two countries.

In reply to your request that I suggest to you the bases on which we feel that such an agreement would rest, I may say that we look at it as follows: Brazil, on the one hand, would consider the reductions which she is prepared to accord to American products in return for the undertaking, on the part of the United States, that leading Brazilian products should remain on the free list. This seems eminently fair in view of the fact that these Brazilian products, which are subject to heavy import duties in most countries, enter the United States freely while American products are subject to heavy duties in Brazil to the detriment of reciprocal trade relations. Furthermore, this appears to be in entire accord with the statement made to the Rio de Janeiro press on April 13 last by the Brazilian Minister of Finance when, in observing that the United States buys half of the coffee Brazil sells but admits it free of all taxes, while European nations tax it heavily, Senhor Aranha added:

“Hence a country that grants us such a treatment is well deserving of everything from us. We must accordingly get closer to that country right along and extend to it every facility in order that its products may enjoy in Brazil certain advantages.”

In the conversation which you had with me on July 27, you mentioned that you did not think that your Government would send any experts to Washington for these conversations. I may say in this connection, for your own information, that both the Colombian and Argentine Governments are sending experts to Washington for the conversations which they will hold with us. In view of this, it is thought that possibly your Government also may wish to send technical experts equipped to consider definitively the questions which will arise during our conversations. However, pending a decision by your Government in this matter it would seem desirable to begin the preliminary discussions without delay. I should be very pleased, therefore, if you could find it possible to come to Washington for that purpose at an early date. I may add that this is, in fact, the procedure which is being followed in the case of Colombia. Minister Lozano plans to begin conversations with us early next week prior to the arrival of his experts.

Very sincerely yours,

William Phillips