611.3231/993a: Telegram
The Secretary of State to the Ambassador in Brazil (Gibson)
137. I am very much disturbed over reports of possible further indefinite delay in the ratification by Brazil of the Trade Agreement. This delay is contributing to a situation within this country which may be of great importance to the whole of the American policy of commercial relations and directly affect Brazilian trade interests.
The Brazilian authorities are acquainted with the views regarding Brazilian-American trade relations that have been urged and argued by many powerful trade interests in this country. These groups have argued that American trade could only be satisfactorily protected if this Government embarked upon a plan of trade control which would secure for American trade preferential opportunities in countries for whose products the United States is a great purchaser. They have reiterated and kept before American opinion the fact that American markets have been open to Brazilian exports, in most instances free of any tariff duty, while American goods are subject to diverse and heavy charges under the Brazilian tariff. They have endeavored to force this Government to take such measures as might be necessary to secure special concessions from Brazil.
The Brazilian authorities also know the main principles on which the Administration has tried to conduct its commercial agreement program. It has endeavored to assume leadership in a policy which will permit trade to move freely according to underlying economic facts, on a basis of equality and assisted by the concerted action of all interested countries in gradually lowering their trade restrictions. In putting forward this program against substantial domestic opposition, the American Government has believed that it could certainly count upon the support of other governments, especially those in the position of Brazil, so dependent upon a freer and expanding world trade, and enjoying comparatively favorable opportunities in the American market. These anticipations of support were expressed at the Montevideo [Page 312] Conference and have led us to expect prompt action on the part of Brazil rather than the protracted delay that has occurred.
The continuance of delay will mean that American interests will more vigorously than before challenge the proposed Trade Agreement with Brazil and urge that tariffs be imposed upon Brazilian products, particularly coffee, unless compensating concessions are given to American trade. In any such proposals they will have the support of those elements who are seeking new sources of revenue, as well as the elements who wish to impede the reduction of American tariff barriers. An assertion of these views by these combined interests is imminent; it will become actual unless countries like Brazil show their belief in the policy embodied in the Brazilian-American Agreement. Action desired neither by this Government nor the Brazilian Government might well result. In the light of these possibilities I wonder if the Brazilian Government does not feel that the time has been reached to overcome the particular groups that are opposing ratification and act decisively to secure prompt ratification. I should be glad if you would discuss this matter in strict confidence along the foregoing lines with the Brazilian Foreign Minister, and with the President of Brazil if you believe this advisable, making it clear of course that there is no thought of threat or menace in what you are saying but that we feel it necessary and advisable to fully express in a friendly and frank manner our apprehensions regarding the situation that may result from continued delay in ratification, and its possible effect upon Brazilian-American trade relations.
I expect to have a talk along similar lines tomorrow with the Brazilian Counselor, the Ambassador being absent.