Brazil will allow another 150 million liters of U.S. ethanol imports into the country each year before charging a 20% import tariff, increasing the tariff rate quota (TRQ) to 750 million from 600 million liters per year, but U.S. trade and ethanol organizations are unimpressed.
Renewable Fuels Association President and CEO Geoff Cooper says maintaining any protectionist trade barrier represents a major setback in our relationship with the Brazilian sugar and ethanol industry. “The token increase in the quota does nothing to provide relief to Brazilian consumers who face higher fuel prices because of Brazil’s discriminatory policy. Not only is the U.S. market wide open to ethanol imports from Brazil, but our Renewable Fuel Standard actually incentivizes imports by characterizing sugarcane ethanol as an advanced biofuel.”
“We are very disappointed Brazil did not fully consider the vast information we and the U.S. government provided them showing the detrimental and negative impact this TRQ has on Brazilian consumers by raising prices at the pump,” said U.S. Grains Council President and CEO Ryan LeGrand. “We will actively encourage review of this policy, which inhibits trade between our countries and hinders the development of a robust global ethanol marketplace. Free and reciprocal fair trade between the world’s two largest ethanol producers should be a model for other countries to follow.”
The TRQ increase is reportedly part of negotiations between the U.S. and Brazil for a bigger trade deal. President Trump tweeted about the action Tuesday morning. “Brazil will allow more American Ethanol to enter the country without Tariffs, a decision that Brazilian mills are celebrating. The seemingly counter-intuitive reaction stems from the tone of ongoing negotiations between the South American nation and the U.S. for a Trade Agreement.”
Officials with UNICA, the Brazilian sugarcane industry association, said they agreed to the increase because it was “important for Brazil to make a gesture in favor of trade openness with the U.S., with whom we’re seeking a broad free trade agreement.”