The American Embassy in Brazil to the Brazilian Ministry for Foreign Affairs 73

No. 2341


The Embassy of the United States of America presents its compliments to the Ministry of Foreign Affairs and, at the request of the Department of State, has the honor to draw its attention in the attached memorandum to the views of the Department regarding the introduction of trade controls in Brazil affecting the importation of products from the United States and the Reciprocal Trade Agreement between the United States and Brazil.



The recently established exchange control measure requires that all exchange applications be accompanied by proof that the Carteira de [Page 669] Exportação e Importação of the Bank of Brazil is in accord with the importation for which the exchange is to be used. The potentially restrictive nature of this measure is a source of concern to the Department of State, which is of the opinion that the regulation described is being put into effect at a time when it would appear rather more essential to give thought to progressive diminution and elimination of controls.

In that respect, it is the policy of the United States Government, in its effort to revitalize and augment international trade in the postwar period, to remove wartime trade controls as soon as they are no longer necessary and to simplify such of those as may remain necessary. The United States Government considers the implementation of that policy important, not only to relieve foreign traders here and abroad from the burden of unnecessary restrictions and formalities, but also as a necessary preliminary step looking toward the relaxation of barriers to trade without which postwar world trade relationships cannot be established on a sound basis.

It is the view of the Government of the United States that exchange control on commercial transactions should be avoided, if possible, for the reason that such control tends to restrict trade. Most countries which have established control of the character described have done so only because of emergency balance-of-payments situations.

Since all exchange applications apparently must carry proof that the Carteira is in accord with the corresponding importations, it follows that the measure in question applies to the commodities included in Schedule I of the Reciprocal Trade Agreement with the United States. If, therefore, the measure should come to be applied to such commodities in a restrictive manner, either through exchange rejections or long delays, this would, of course, impair the value of the concessions on articles in Schedule I of that Agreement. In any case, the measure appears to be contrary to the spirit of the Trade Agreement and its appended notes with respect to exchange control. It also makes for uncertainty on the part of exporters in the United States and importers in Brazil as to the exchange treatment they may expect on successive shipments.

In addition to its views as respects the exchange restrictions discussed above, the Government of the United States is also very greatly concerned over a further control in the form of a general prior import license system. This is understood to be under consideration by the Government of Brazil at the present time as a result of legislation already in effect, under which it has been required that import licenses be procured on various products. Among such products is white cement, a product definitely included in Schedule I of the Brazilian-American Trade Agreement.

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The Embassy has been directed to express the disappointment of the Government of the United States that, at a time when every effort should be made to reduce trade barriers, with a view to a mutually necessary and advantageous postwar expansion of international trade, the Government of Brazil has seen fit to adopt restrictive measures which will tend adversely to affect such trade.

  1. Copy transmitted to the Department in despatch 19230, December 19, 1944, from Rio de Janeiro: received December 28.