811.20 Defense (M) Brazil/5126c: Airgram

The Secretary of State to the Ambassador in Brazil (Caffery)

A–2164. From Rosenthal,10 OEW, for Winans.11 We would like to have you consult with the Ambassador and request the Ambassador to initiate conversations and lead the Government to Government discussions with Brazilian Government, in association with you or your designees, and Crump,12 looking toward overall agreement relating to [Page 711] agricultural food products. This agreement would incorporate by reference certain specific separate agreements to be negotiated concurrently with commercial firms or others on items as directed herein. In addition it would apply to other agricultural food products on which we might from time to time suggest specific detailed negotiations, so far as the general basic terms of the overall agreement are concerned.

In carrying out these preliminary conversations, we wish to impress on you the importance of taking every precaution to have absolutely no publicity given to our interest in these various products. This is important not only to avoid interference with the conduct of negotiations but also to avoid arousing of any undue hopes on part of producers. Consequently we ask you stress confidential nature of these discussions until a substantial agreement is reached and public announcement is agreed upon by both governments.

I.
With respect to the type of such overall agreement, we have the following suggestions:
A.
It should be as simple and brief as possible and preferably in form of exchange of diplomatic notes after clearance of contents in Washington.
B.
The Brazilian Government would make the following undertakings: That local consumption would be satisfied before any products were offered for export. That no increase in present export or other taxes of any kind would be imposed on any of the products enumerated in the overall agreement or subsequent additions thereto. That we would have exclusive rights to purchase and would agree to purchase exportable surpluses unless otherwise specified. In connection with this last provision, we would like to have the Brazilian Government state the tonnages of each of the products covered herein which has been customarily sold to other Latin American countries, using reasonable current needs as the figure, and it would be agreed that these amounts, as well as the requirements for local consumption, would be excluded from exportable surpluses for the United States. Brazil would announce that it would make these tonnages available for export to these countries at no higher prices than to the United States. If Brazilians raise question of filling requirements of countries other than Latin American please advise us and we will give you our views. It would also be agreed that the Brazilian Government make every possible effort to see that sufficient quantities of seed for succeeding crops would also be set aside. The Brazilian Government would agree to make every effort to bring about planting acreages necessary to produce maximum of each commodity, which would be inserted in the separate agreements as well as minimums. That the Brazilian Government, upon conclusion of formal agreement, will give wide publicity to prices and other terms of the overall and separate specific agreements as incentive to maximum production and so producers will be informed as to what is expected of them.
C.
With exceptions noted herein, we believe that the agreement should extend through two crop years in order to provide real incentive to maximum production efforts and to stimulate expanded plantings in the forthcoming seasons of crops.
II.
We have directives for immediate expanded production and purchase of peanuts, dried beans and rice and forthcoming directives cover other products covered herein. The following are our detailed suggestions on each separately, regarding Government to Government negotiations, but in any contracts with commercial firms or others the overall agreement is to be incorporated by reference. In all instances provision is to be made for payment in either U. S. dollars or British sterling at the then rate of exchange.

[Here follows a discussion regarding separate items—peanuts and peanut oil, dried beans, rice, castor oil, cottonseed oil, cottonseed meal, and oiticica oil.]

  • [Rosenthal]
  • Hull
  1. M. S. Rosenthal, Assistant Director, Office of Economic Warfare, successor of the Board of Economic Warfare.
  2. Hubert C. Winans, Special Representative, Office of Economic Warfare.
  3. Stephen A. Crump of the Commodity Credit Corporation.