ELABORATION OF POINTS MADE IN SUMMARY DRAFT         
 
             ON THE PROPOSED GERMAN COTTON DEAL             
 
 
1. The Interdepartmental Trade Agreements Committee
after, thorough study of the proposed plan has-reached the
conclusion that the proposed plan is not only economically
unsold but would also militate seriously against the
success of the whole trade agreements program. Indeed,
countries may refuse to conclude agreements with us if
the concessions are nullified by special Preferential
arrangements such as that contemplated in the German deal.
 
 
2. This Government has already made definite proposals
to Brazil involving joint declaration by both Governments
against special preferential arrangements by either party
and taking a stand for the principle of the open door in
commerce and equality of treatment. Indeed, we have
pressed Brazil to refrain from making special Preferential 
arrangements with Germany. In consequence, Brazil cut off  
negotiations with Germany pending the conclusion of the
trade agreement with the United States. The representatives      
of the Brazilian Government now say that if we conclude the
proposed cotton deal with Gemany, they will not be able
to make the proposed agreement with the United States, and 
will themselves be compelled to enter into the preferential 
arrangements with Germany which had earlier been contemplated.
 
 
On