CHAPTER VIII INITIAL ACCOMPLISHMENTS 53. DISAVOWING THE PREFERENTIAL TREATMENT In 1904, as a result of negotiations under the provision of the Tariff Act of 1897 which authorized the President to remove from the free list coffee and other articles originating in countries which did not accord to American products reciprocally reasonable treatment,' Brazil was induced to grant tariff preferences to certain products of the United States. With the exception of the year 1905, Brazil continued annually thereafter to grant to a list of American products preferential treatment for the ensuing year. This practice was confirmed and the list extended for the purpose of securing from the United States its minimum tariff rates under the Tariff Act of 1909, though the object of this act was to obtain equal, not preferential, treatment. After the repeal of the Act of 1909 Brazil continued the preferences without formal reciprocity. During 1922 and recent years they amounted to thirty per centum on wheat flour and twenty per centum on condensed milk, certain manufactures of rubber, clocks, certain inks and paints, varnishes, typewriters, ice chests, pianos, scales, windmills, cement, corsets, dried fruits, school furniture and desks. 1 Supra, subdivision 18(c). A full account of the preferential treatment formerly accorded by Brazil to certain American products is contained in the U. S. Tariff Commission's report on Reciprocity and Commercial Treaties, pp. 285 et seq. 439] 229 [440 Of these, after September 1, 1920, scales, ice chests, cement, corsets, certain rubber manufactures, pianos, certain inks and paints and varnishes were likewise preferred when imported from Belgium.1 The exports of the articles on the preferred list have not been of great importance compared with the totals of recent exports from the United States to Brazil, amounting to only about ten per centum in 1920 and six per centum in 1921. Moreover, Brazil receives only a small percentage of the total American exports of any of these articles. The Brazilian law under which the Executive, by annual decree, has renewed the preferences indicates that favors granted under it are to be reciprocal; and it is true that the United States has continued to admit free of duty Brazil's most important exports. The fact remains, however, that the United States has, at least since 1913, asked for special concessions from Brazil and granted nothing in return that would not have been granted anyhow as a matter of domestic policy and in accordance with domestic law. The policy of annually requesting preferences had, therefore, become anomalous and not wholly creditable to the United States. As a matter of fact the preferences were the result of long-continued coercion by this country, based upon the same considerations that were generally urged in connection. with the bargaining features of the tariff acts of 1890 and 1897. The policy involved was in strange contradiction to that pursued by Secretary of State Hay a few years before in achieving the Open Door in the Far East. It should be noted, moreover, that on two different occasions 1Commerce Reports, November 4, 1920. 1 Supra, subdivision 18(b) and (c). 'Infra, subdivision 56. since 1904 the Congress has decided against a policy of bargaining for concessions and in favor of the policy of equality in return for equality of treatment; first, in the acceptance of the maximum-minimum provisions of the Payne-Aldrich law and, secondly, by the adoption of Section 317 of the Tariff Act of 1922. The latter, in particular, emphasized and heightened the obvious inconsistency between the general American policy of a fair field and no favors and the opposite policy pursued with reference to Brazil. It made the question of repeating the annual request for renewal of preferential treatment one of serious concern and was directly responsible for the decision of the United States not to ask for the renewal of the preferences at the beginning of the year 1923. The Department of State was assisted in its consideration of the question, prior to this decision, by officials of other branches of the Government. In a letter to Secretary Hughes, in which the various aspects of the matter were discussed, Dr. W. S. Culbertson1 concluded that: The Brazilian preferences . . are a remnant of a policy which has been discredited by the investigations of the Tariff Commission and twice rejected by Congress. This remnant affords certain narrow and immediate advantages, but it is in conflict with our present policy which offers larger commercial advantages in the long run; . . . is based upon equity and contributes to peace and good will among nations.2 1Vice Chairman, United States Tariff Commission. Dr. Culbertson added: "The conflict between the two policies is immediate since our present general policy requires negotiations with various foreign countries, and the inconsistency of our relations with Brazil will hamper these negotiations. Though the abandonment of our preferential position in Brazil will sacrifice certain immediate interests, this sacrifice will not be so large as it would have been some years ago and such abandonment is necessary if the United States is to adhere to its declared principles and carry out a consistent policy." (Letter of Jan. 3, 1923). Quotation courteously permitted by Dr. Culbertson and Mr. Hughes. |