Memorandum by the Chief of the Division of Commercial Policy (Fowler) to the Secretary of State

Mr. Secretary: The Brazilian Government has accepted in principle a proposal which we made with your approval in November that confidential exploratory discussions take place to find a possible basis for a new trade agreement to replace the existing one,58 now nine years old.

Although we have had no indication from the Brazilian Government as to what new products they would propose for Schedule II59 consideration, it is believed that few items of a controversial nature would enter the negotiations. These two should be mentioned, however:

Rubber. In the present agreement with Brazil “gutta balata, crude” is bound free. It is possible that Brazil might request a broadening of the classification. However, “India rubber, crude” was included in the Bolivian list published in April, 1942 and we have not had any public reaction to its inclusion. No comment at all was made on it at the Bolivian public hearings.
Cottonseed Oil. This might be a controversial item, if included, but strong opposition from the Department of Agriculture to its inclusion may be expected.

Other less important items which might be involved are canned beef, bovine hides and skins, cottonseed cake and meal, and cotton linters. Concessions on these items, however, have already been granted in other agreements.

The state of our preparatory work is such that it would probably be about three months before we could determine, after confidential exploratory discussions with the Brazilians, whether a mutually satisfactory basis existed for a new agreement. If such a basis were [Page 656] found to exist, this would place public announcement and formal negotiations in the middle and late summer. If you would not desire this, confidential exploratory discussions could be extended so that there would be no publicity until late in the year. Your decision would be appreciated on this point.60

. . . . . . . . . . . . . .

William A. Fowler
  1. For correspondence on the negotiation of this agreement, signed February 2, 1935, see Foreign Relations, 1935, vol. iv, pp. 300 ff.; for text and exchange of notes, see Department of State Executive Agreement Series No. 82, or 49 Stat, (pt. 2) 3808 and 3834.
  2. Schedule in the trade agreement which included articles produced or manufactured in Brazil upon which tariff concessions were given when imported into the United States.
  3. In a marginal note the Secretary’s preference was Indicated as “Late in the year.”