Foreign Relations of the United States, Diplomatic Papers, 1933, The American Republics, Volume V

611.3231/571

Memorandum Handed to the Brazilian Ambassador (Lima e Silva) by the Assistant Secretary of State (Caffery), on October 30, 1933

There is attached hereto a draft of a reciprocal trade agreement between the United States of America and the United States of Brazil, with two appended schedules of products¹¹ including, respectively, those on which reductions in duties are desired by the United States, and those which it is desired shall continue to receive in Brazil treatment as favorable as that now enjoyed. The Government of Brazil will doubtless desire to submit as soon as practicable a list of the Brazilian products with respect to which commitments are desired from the United States.

The Government of the United States reserves, of course, the right to make such changes in the attached draft agreement and appended schedules as may seem appropriate at any time during the discussions.

Washington , [October 30, 1933.]

[Enclosure]

Draft Reciprocal Trade Agreement

The President of the United States of America and the President of the United States of Brazil, desiring to promote trade between the two countries, have arrived at the following agreement:

Article I

Articles the growth, produce or manufacture of the United States of America, enumerated or described in Schedule 1 annexed hereto and made a part of this agreement, shall, when imported into Brazil, be exempt from customs duties in excess of those set forth in the said schedule.

Articles the growth, produce or manufacture of the United States of America, enumerated or described in Schedule 2 annexed hereto and made a part of this agreement shall, when imported into Brazil, be subject to treatment no less favorable in respect to duties, rebates, surtaxes and other charges on imports than that enjoyed on September 1, 1933.

Duties and charges payable on articles enumerated or described in Schedules 1 and 2 shall be computed in accordance with the provisions of Articles IV and V hereof, and shall continue to be subject to the reduction of thirty-five per centum now accorded to most-favored-nations.

Article II

Articles the growth, produce or manufacture of Brazil, enumerated or described in Schedule 3 annexed hereto¹² and made a part of this agreement, shall, when imported into the United States of America, be exempt from all customs duties and import charges.

The provisions of this article shall not apply to coffee imported into Puerto Rico. They shall not apply to such special duties as are required by law to be assessed on importations which are not properly marked to indicate their origin, or to such special duties as may be required by law to be assessed on articles which have been sold at less than the foreign market value (or, in the absence of such value, than the cost of production).

Article III

Articles the growth, produce, or manufacture of the territory of either Contracting Party, which are imported into the territory of the other Party, and which are not separately enumerated or described in any paragraph or number of the tariff of the importing country and are not subject under a tariff provision relating to similitude, commingling, et cetera, to a rate or rates prescribed for an enumerated or described article, shall not be dutiable in an amount exceeding twenty per centum of the dutiable value computed as provided in Article IV of this agreement.

Article IV

In respect to articles the growth, produce, or manufacture of the territory of either Contracting Party imported into the territory of the other Party, and on which the duty or tax imposed by the latter is expressed as a percentage of the value thereof, the method of determining dutiable value shall be as prescribed under presently existing laws and regulations of the importing country; and the ad valorem duties or taxes required to be paid shall not exceed the amount computed at the established rate directly and without increment from the value obtained by converting the value in the currency in which the goods are invoiced into an equivalent value in the currency in which the duties are to be paid by a single conversion at a rate representing the open market ratio between the values of the two currencies or at a fixed rate not differing by more than five per centum from such open market ratio.

The customs authorities of each Party will give sympathetic consideration to such representations as importers shall make, concerning the dutiable value to be placed upon goods originating in the territory of the other Party.

Article V

In order that traders may more easily determine the charges to which imported goods are subject, any surtaxes or fees which are now or may hereafter be imposed on any article in either country in addition to the rate of duty established by this agreement or under its customs tariff, shall be consolidated into a single surtax, which shall not exceed ten per centum of the amount of duty payable after any deductions, such as the thirty-five per centum reduction now accorded by Brazil to most-favored-nations, have been made.

Article VI

All articles, the growth, produce or manufacture of either Contracting Party, after importation into the territory of the other Party, shall be exempt from any internal taxes or governmental charges other or higher than those payable on like articles of national origin.

Those articles the growth, produce or manufacture of the United States of America, described in Schedules 1 and 2 annexed hereto which are not produced in substantial quantities within Brazil, shall, after importation into the territory of Brazil, be exempt from any internal taxes or governmental charges other or higher than those in force on the date of signature of this agreement. Likewise, those articles the growth, produce or manufacture of Brazil described in Schedule 3 annexed hereto, which are not produced in substantial quantities in the United States of America, shall, after importation into the United States of America, be exempt from any internal taxes or governmental charges other or higher than those in force on the date of signature of this agreement.

Article VII

Laws and regulations and decisions of administrative and judicial authorities pertaining to the classification of articles for customs purposes and to rates of duty shall be published in such a manner as to enable traders to become acquainted with them in advance of importation, and shall apply uniformly at all ports of entry.

No administrative ruling by either Contracting Party effecting advances in duties or charges on importations from the territory of the other Party, or imposing any new requirement with respect to such importations, shall become operative until at least thirty days after public notice thereof in the usual official manner. The provisions of this paragraph do not apply to administrative orders imposing anti-dumping duties, relating to sanitation or public safety, or giving effect to judicial decisions.

Article VIII

In cases in which either Party shall impose any penalty in respect to customs regulations or formalities on merchandise arriving from the territory of the other, a period of at least sixty days will be granted the buyer or other Party in interest, or the agent of either of them, in which an appeal may be taken to an appropriate authority competent to review the matter: Provided, That in the case of merchandise liable to perish or to waste or to become greatly reduced in value by keeping, or when the expense of preserving the merchandise is out of proportion to the value thereof, such merchandise may be sold, and the net proceeds obtained from such sale shall be considered merchandise within the meaning of this paragraph and shall be accorded all the privileges of appeal as provided herein.

Neither Party shall impose greater than nominal penalties upon importations of products or manufactures of the territory of the other Party because of errors in documentation obviously clerical in origin or where good faith can be established.

Each Party shall accord sympathetic consideration to such reasonable representations as the other shall make regarding the operation of customs regulations, the observance of customs formalities, and the application of sanitary laws and regulations for the protection of human, animal or plant life.

Article IX

It is agreed that the United States of America and the United States of Brazil will grant each other unconditional and unrestricted most-favored-nation treatment in all matters concerning customs duties and subsidiary charges of every kind and in the method of levying duties, and, further, in all matters concerning the rules, formalities and charges imposed in connection with the clearing of goods through the customs.

Accordingly, natural or manufactured products having their origin in either of the countries shall in no case be subject, in regard to the matters referred to above, to any duties, taxes or charges other or higher, or to any rules and formalities other or more burdensome, than those to which the like products having their origin in any third country are or may hereafter be subject.

Similarly, natural or manufactured products exported from the territory of either Party and consigned to the territory of the other shall in no case be subject, in regard to the above-mentioned matters, to any duties, taxes, or charges other or higher, or to any rules and formalities other or more burdensome, than those to which the like products when consigned to the territory of any other country are or may hereafter be subject.

Any advantage, favor, privilege or immunity which has been or may hereafter be granted by either country in regard to the above-mentioned matters, to a natural or manufactured product originating in any other country or consigned to the territory of any other country shall be accorded immediately and without compensation to the like product originating in or consigned to the territory of the other Party.

Neither Party shall establish any prohibition or maintain any restriction on imports from the territory of the other which is not applied to the importation of any like article originating in any other country. Any abolition of an import prohibition or restriction which may be granted even temporarily by either of the Parties in favor of an article of a third country shall be applied immediately and unconditionally to the like article originating in the territory of the other Party.

In the event of rations or quotas being established by either Party for the importation of any article otherwise restricted or prohibited, it is agreed that in the allocation of the quantity of restricted goods which may be authorized for importation, the other Party will be granted an equitable share, corresponding to the proportion of the trade which it would normally enjoy.

Foreign exchange transactions shall not be regulated or controlled in either country in such a way as to discriminate against the nationals or commerce of the other as compared with the nationals or commerce of any third country.

Nevertheless, the advantages now accorded or which may hereafter be accorded to other adjacent countries in order to facilitate frontier traffic, and advantages resulting from a customs union already concluded or hereafter to be concluded by either country shall be excepted from the operation of this article; and this article shall not apply to police or sanitary regulations or to the commerce of the United States of America with the Republic of Cuba, or to commerce between the United States of America and the Panama Canal Zone, the Philippine Islands, or any territory or possession of the United States of America, or to the commerce of the territories and possessions of the United States of America with one another.

Subject to the reservations set forth in the preceding paragraph the provisions of this article shall apply to articles the growth, produce or manufacture of any area under the sovereignty or authority of either Party imported from or exported to any area under the sovereignty or authority of the other Party. It is understood, however, that the provisions of this paragraph do not apply to the Panama Canal Zone.

Article X

Except as otherwise provided in this agreement the provisions thereof shall apply to the customs territories of the two countries.

Article XI

The present agreement shall, from the date on which it comes into force, supplant the agreement by exchange of notes signed by the United States of America and the United States of Brazil on October 18, 1923,¹³ and shall supersede any other subsisting provisions which may be in conflict herewith.

Article XII

(Provisions for the coming into force of the agreement, its duration, and its termination, to be agreed upon after agreement on the other provisions has been reached.)

11. Schedules not printed.
12. Schedule 3 is not annexed to file copy.
13. Foreign Relations, 1923, vol. i, pp. 461–463.