Brazilian ethanol trade in Trump sights

Source: By Farm Progress • Posted: Tuesday, August 25, 2020

President says, “if they do tariffs, we have to have an equalization of tariffs.’

A bipartisan coalition of House members has joined the effort to restore ethanol trade with Brazil.

In a letter sent Thursday to U.S. Trade Representative Robert Lighthizer, 20 members of the House implored the Trump administration to ensure that “creating a level playing field for U.S. ethanol be a high priority during bilateral trade negotiations.” Their request follows President Trump’s recent call for “fairness in tariffs” on ethanol. On Aug. 10, President Trump stated, “as far as Brazil is concerned, if they do tariffs, we have to have an equalization of tariffs. …it’s called ‘reciprocity.’” In a letter to Lighthizer on Aug. 11, RFA supported the administration’s position.

Related: COVID-19 could cost ethanol industry $10 billion

Thursday’s House letter, led by Reps. Darin LaHood, R-Illinois, and Adrian Smith, R-Nebraska, asks Lighthizer to “…urge your Brazilian counterparts to terminate the ethanol tariff rate quota (TRQ) and prohibitive 20% tariff on out-of-quota imports, and instead reinstate the zero-duty exemption for U.S. ethanol from Brazil’s Common External Tariff that was in effect from 2012 to 2017.”

“Brazil’s inequitable treatment of U.S. ethanol creates economic strain throughout the U.S. ethanol industry, especially during a year in which COVID-19 is devastating fuel demand in our country. The United States, however, continues to provide ethanol imports from Brazil virtually tariff-free access to the U.S. market. Last year, the U.S. imported 250 million gallons worth $596 million. Brazil must end this unfairness by eliminating its TRQ,” the lawmakers continued.

Related: Ethanol industry must transform to thrive

Commenting on the House letter, RFA President and CEO Geoff Cooper said, “Clearly, there is consensus building that something must be done immediately to prevent Brazil from doubling down on its protectionist ethanol trade policies. Both the White House and Congress understand the need for free and open markets when it comes to ethanol. The chorus of voices is growing louder: it’s time for Brazil to remove its punitive trade barriers and honor its commitment to free and fair trade. Otherwise, the United States may have no choice but to respond in kind and take action to shut out imports of Brazilian ethanol.”

Source: RFA and Office of Rep. Darin LaHood, which is solely responsible for the information provided and is wholly owned by the source. Informa Business Media and all its subsidiaries are not responsible for any of the content contained in this information asset.