U.S. and Brazilian negotiators continue to haggle over U.S. access to Brazil’s ethanol market, but lawmakers like House Agriculture Committee Chairman Collin Peterson, D-Minn., are losing patience as the talks drag on.
The Brazilian tariff rate quota that allows 198 million gallons of duty-free U.S. ethanol to enter Brazil expired Aug. 31, exposing U.S. exports to a 20% tariff. U.S. negotiators had hoped to have at least a temporary deal in place earlier this week to extend the TRQ by three months, but Brazil balked at the arrangement and a resolution still has not been reached, U.S. industry and government sources tell Agri-Pulse.
"American corn and ethanol producers are struggling to access domestic markets because of the coronavirus and the Environmental Protection Agency's reckless implementation of the Renewable Fuel Standard," Peterson said in a statement released Friday. "Brazil's move to increase tariffs on American ethanol is more bad news for our producers. The Trump Administration should continue working with Brazilian officials to restore the duty-free access that was in place from 2012 to 2017."
U.S. corn farmers and ethanol producers continue to push the Office of the U.S. Trade Representative to insist that Brazil scrap its 20% tariff, while Brazil’s sugarcane lobby presses to keep it in place, while discarding the TRQ.
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It was in 2017 that the Brazilian government, under pressure from mostly Northeast sugarcane farmers, erected the 20% tariff on U.S. ethanol, but also set up a TRQ.
The U.S. exported about 500 million gallons of ethanol in 2018, but that dropped sharply by more than 30% to just 340 million gallons in 2019, according to data from the U.S. Energy Information Administration.
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