151. Telegram From the Ambassador in Argentina (Beaulac) to the Department of State1

Soaec 32. In conversation with USDel on Wednesday, members of Brazilian delegation expressed strong interest in achievement of economic agreement in treaty form. As a result Dillon and Rubottom called on Brazilian Finance Minister2 this afternoon to review situation re economic agreement. Dillon outlined US views regarding difficulty reaching solid agreement on number of key topics which had been subject of controversy for many years.

Welcomed Brazilian draft of July 31 as attempt to shorten and simplify agreement but pointed out it still contained number difficult points on which we felt agreement doubtful. Therefore, we had concluded would be necessary to go to even more general draft or possibly to declaration.

Alkmin replied that Brazil felt there would be serious public reaction if conference was unable to reach agreement on some kind economic treaty. He indicated Brazil has no strong feelings on content of treaty and would be glad to make it as general as necessary to reach overall agreement. Alkmin further said he considered Mexicans and Uruguayans would be main obstacle to reaching agreement. He suggested US and Brazilian delegations meet privately to go over new Brazilian draft introduced Tuesday3 to see if possible reach agreement, in which case he felt there was possibility other delegations might agree. He was particularly concerned that in no event should any responsibility for failure to reach definite agreement fall on Brazil. Alkmin also stated that new Brazilian draft was considerably more general in nature than July 31 draft. (We have not yet obtained English translation of new Brazilian draft which only submitted late Tuesday in Portuguese.)

As indication of seriousness with which he regarded problem Alkmin, who had planned to leave tomorrow, said he was seeing Carrillo-Flores this evening in attempt obtain his agreement to a simplified general agreement in treaty form. If conversation with Carrillo-Flores went well Alkmin said he would delay his departure and stay Buenos Aires as long as necessary.

We have reason believe Argentine delegation actively supporting Brazilian position that economic agreement must be signed here with very little concern as to what it contains. We feel it important to [Page 530] avoid to fullest extent possible reasonable basis for concluding that US responsible for failure to reach agreement.

Meanwhile work of Committee I has reached following stage: Committee I, after prolonged argument procedures, began discussion IA–ECOSOC secretariat draft of general economic agreement USDel made statement saying that detailed comprehensive text such as secretariat draft not likely produce agreement because of issues remaining since Bogota economic agreement and that best chance of obtaining acceptance of instrument without reservations would be consider simpler and shorter version. Committee then briefly discussed preamble and first five articles secretariat text and appointed drafting committee with US as member. US has so far not distributed alternative B or shown it to other delegates. Debate in committees and outside discussions have now confirmed our conviction any agreement as ambitious as secretariat approach completely impossible. At same time it is clear that failure reach any agreement at all will be blamed on US unless we can demonstrate sincere effort try for agreement along lines alternative B. Accordingly plan introduce first three articles alternative B in drafting group tomorrow as substitute secretariat articles one through nine and will also discuss entire draft with Brazilians and Mexicans.

  1. Source: Department of State, Central Files, 365/8–2257. Confidential; Priority.
  2. José Maria Alkmin.
  3. August 20.