611.3231/1103: Telegram
The Ambassador in Brazil (Gibson) to the Secretary of State
[Received 2:35 p.m.]
349. Department’s 215, December 20, 7 p.m. Policy of Brazilian Government on extension of tariff concessions not definitely adopted, but according to a memorandum presented to Federal Foreign Trade Council yesterday by Sampaio, with approval of Foreign Office, the probable action will be as follows.
The tariff concessions in our agreement will be extended beginning January 1st to all nations with which Brazil has commercial agreements [Page 320] containing unconditional most-favored-nation clauses. However, concomitantly the Brazilian Government will, on December 31st, denounce these agreements which exist mainly in the form of exchanges of notes negotiated by Mello Franco in 1931 and 193224 with some 32 or more nations. The agreements negotiated subsequent to January 1, 1934, will not be denounced, i. e. those with Portugal, Uruguay, France, the United States and Argentina, the latter not yet having been ratified by the Brazilian Congress.
The announced aim, however, is to utilize the denunciation of the unconditional most-favored-nation agreements similar to the Brazilian-American agreement. The Sampaio memorandum embodying the present official viewpoint of the Brazilian Foreign Office states forcefully that the object of the policy is to sweep away trade barriers and to continue the practice of the liberal commercial policy which Brazil has always followed. While Brazil feels constrained to denounce the agreements which have not produced the effects which were intended, the Brazilian Government holds the exclusive purpose of utilizing the periods of time between the denunciation and the actual lapsing of the various agreements to negotiate new accords in place of those denounced better calculated to establish and maintain favorable relations with the interested countries. Many of the agreements to be denounced will lapse in 3 months and all of them by the end of 6 months after denunciation.
I am informed that the British, Italian and German Embassies early last week addressed inquiries to the Foreign Office requesting information as to whether the Brazilian customs officers had been advised to extend from January 1st the same tariff concessions granted to the United States in accordance with the most-favored-nation clauses in their respective agreements. The Brazilian Government felt that some possibility existed of finding rational grounds for withholding the extension of the concessions but felt impelled not to enter upon such discussions but rather to grant the new rates and at the same time reconsider along better and more liberal lines Brazil’s fabric of trade accords by denouncing those already in existence. The memorandum presented to the Federal Foreign Trade Council, which was presided over by President Vargas, met with general approbation by that body. It is to receive further discussion at a special session of the Council on the 26th instant and is likewise to be submitted to the governors of the various Brazilian states, as well as to the interested departments of the Government and to associations representing the various producing classes. This submission, however, is expressly made without prejudice to the immediate placing [Page 321] of the policy in effect on December 31st and January 1st if approved at the regular formal session of the Council on December 30th as is probable.
- Afranio de Mello Franco, then Brazilian Minister for Foreign Affairs.↩