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.
[Enclosure]
Memorandum
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.
