832.00 TA/4–1350

Memorandum by Mr. John U. Abbink of the Interim Office for Technical Cooperation and Development to the Assistant Secretary of State for Inter-American Affairs (Miller)

confidential

Announcement in press reports from Washington regarding the progress in Argentine negotiations makes it all the more necessary to take some positive steps in solving the seeming impasse in Brazilian-United States conversations, if our relations with Brazil are not to be seriously affected.

As I told you at the Business Advisory Council meeting last week Monday night, while the Joint Brazil-United States Technical Commission1 was holding its sessions 15 months ago, the Brazilian members formally asked that the Joint Commission idea be made permanent, with meetings once or more a year to check progress made and to provide comment to both governments on further steps to be taken. Informally, President Dutra endorsed the plan, though he was careful not to make it as a request.

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While the United States members of the Commission agreed that there was danger that much of the accomplishment and much of the good will created in the joint conversations might be dissipated if the Commission were to disband, we felt that to agree exceeded our instructions, and asked the Department for advice. I was instructed to “soft-pedal” the idea, and the result was a watered down recommendation that a “mechanism” be established for periodic joint review and further discussions.

The Brazilians were disappointed and while he never said so specifically, I am sure that Dr. Bulhoes2 was sent to Washington in the hope there would be determined follow-up. Unfortunately he arrived at a time when reorganization of the Department was taking place. About six months ago Bulhoes informally and somewhat facetiously indicated he thought he was being “shunted off”, and at that time he offered to bet that the United States would be helping Argentina out of her difficulties before any serious steps were taken regarding Brazil. (I took the bet!)

Bulhoes’ attitude is like that of many other Brazilians. They feel that the United States presumes on Brazilian friendship, but that we lean forward to enlist the cooperation and solve the problems of other Latin American countries. Deeply they believe that as one of the active allies of the United States in both world wars, Brazil should have been a beneficiary of Marshall Plan funds equally with our European allies, and certainly before some of our enemies (Italy, Germany and Japan) received help, on the premise that the Brazilian economy too suffered a set-back during the war.

This is an attitude we’ll have to live with; it is probably too widely held for us to overcome.

In the light of developments during the past year, it is unfortunate that joint United States–Brazil overall study and conversations were permitted officially to lapse. They should, if possible, be reconstituted in some form because the Brazilians badly need help, if only to learn how to present proposals in a manner that will permit serious consideration by the Export-Import and World Banks. These institutions feel that there are ways in which they could help, but that the Brazilians hinder rather than advance their prospects by presenting incomplete or contradictory material for study.

For the longer range it occurs to me that the Brazilian proposal for a Joint Guaranty Plan3 offers a solution. Assuming the National Advisory Council decides that the plan is feasible insofar as the [Page 759]United States is concerned, the proviso that the plan be jointly administered might afford a mechanism for continuing collaboration at a level which could be effective without being too obvious.

The critical period, it seems to me, is the next few months.4

  1. Mr. Abbink’s report to the Secretary of March 17, 1949, commenting on the work of the Commission, is printed in Foreign Relations, 1949, vol. ii, p. 552.
  2. Octavio Gouvêa de Bulhões, Chief of the Economic and Financial Studies Section in the Cabinet of the Minister of Finance; also Brazilian Cochairman of the Commission.
  3. The Joint Guaranty Fund is further discussed in the memorandum of October 6, 1950, by Randolph A. Kidder, Officer in Charge of Brazilian Affairs, to Under Secretary of State James A. Webb, p. 771.
  4. In a letter of April 17, 1950, to Herschel V. Johnson, U.S. Ambassador to Brazil, Mr. Kidder said in part that Mr. Abbink’s memorandum had been discussed by Mr. Miller and a number of other ARA officials. “Mr. Miller feels strongly that something should be done by way of a more positive approach to Brazil’s desire for our cooperation.” (832.00–TA/4–1750)