560.AL/7–2547: Telegram

The Secretary of State to the Consulate at Geneva

us urgent

891. To ITO 152. Embassy Rio has been asked to approach FonOff informally with view to latter’s instructing Brazilian delegation Geneva to postpone any action along lines indicated urtel 765 July 24 FrITO 150 (which has been repeated to Rio) for at least week to enable further discussions to take place in Geneva and perhaps here and in Rio. It has been pointed out that Clayton only due return Geneva today and that Dept would like him to have full opportunity to consider matter.

Dept inclined to concur that our position must be to refuse to agree with Brazilian proposal if presented but it feels every effort should be made to convince Brazilians to withhold action. Embassy Rio of opinion that Brazilian proposed action is for protective reasons rather than to produce revenue which complicates possibility of finding acceptable compromise. Dept feels Brazilian position is probably influenced most by unbalanced trade position and resulting dollar exchange problem.