Foreign Relations of the United States, 1969–1976, Volume E–11, Part 2, Documents on South America, 1973–1976

134. Memorandum From Secretary of the Treasury Simon to President Ford¹

Washington, May 24, 1976.

SUBJECT

• Trip to Chile, Brazil and Mexico

The purpose of my trip was to explore ways in which we could develop closer economic ties with the countries of Latin America. Economic cooperation in Latin America can bring not only economic benefits to the United States but also can assist us in our foreign policy goals in that part of the world. We have been able to develop such a parallel economic and political approach in the Middle East, and based on my experiences in these three countries, I believe we can also do it in Latin America.

Each of the countries I visited poses a different set of problems, but I completed this trip very optimistic about the economic potential in Latin America. I met with President Pinochet in Chile, President Geisel in Brazil, and President Echeverria in Mexico, as well as having extensive discussions with their economic leaders. In each of the countries, I made it clear that I was not bringing additional aid commitments, but rather that I wanted to find ways we could help the countries to help themselves.

[Omitted here is material unrelated to Brazil.]

Brazil

Brazil offers great economic potential and certainly is playing a central role in Latin America. Henry Kissinger visited there in February and established a consultative mechanism to provide political impetus to our relationship. During my visit, we were able to reach agreement on important bilateral issues which should help us to expand trade and investment between the United States and Brazil.

In the trade area, we agreed on the following:

(1) That Brazil would phase-out its subsidy program which has resulted in an unfair trade advantage for Brazilian products.

(2) That as a result of this action, we would act to further liberalize trade by agreeing not to reevaluate present countervailing duties on footwear until the last quarter of 1977; and by waiving countervailing duties on leather handbags, effective July 1, 1976. In addition, with respect to soybean oil, we resolved the threatened action by the U.S. industry. Based on the Brazilian government’s action, the U.S. industry announced they would not file a complaint.

In the investment area, we agreed to work together to facilitate U.S. private sector investment in Brazil. They gave me a list of key Brazilian projects in areas such as iron ore, oil, hydroelectric power, copper and agriculture, and I am distributing these to the private sector here in the United States. We also arranged for a negotiation of a double tax treaty which will be an important step towards increasing investment. A team from Brazil will visit Washington in June to negotiate this treaty.

I believe these agreements will mark a new level of cooperation between the United States and Brazil. In order to ensure that the relationship grows, Finance Minister Mario Simonsen and I established a formal mechanism, under the framework of the memorandum which Henry Kissinger signed last February. It involves the establishment of a consultative group on trade, investment and financial issues which will meet regularly. In this way, I believe that we have properly institutionalized the important economic relationship between Brazil and the United States.

[Omitted here is material unrelated to Brazil.]

1. Summary: Secretary Simon informed President Ford that the recently signed agreements with Brazilian leaders meant that relations between the two nations would improve.

   Source: Ford Library, National Security Adviser, Kissinger-Scowcroft West Wing Office Files, Box A3, Treasury Department, 5/24/76–10/27/76. Eyes Only. Ford initialed the memorandum.