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Brazil to maintain biofuel tariff quota as consultations begin on ethanol, sugar

-The Hagstrom Report

Brazil will maintain a pro-rata tariff-rate quota (TRQ) for ethanol proportional to the total annual volume of the TRQ that was in force on Aug. 30, while consultations between the United States and Brazil over ethanol and sugar take place starting today, the Office of the U.S. Trade Representative announced Friday.

Brazil’s 750mn-liter tariff-free quota for ethanol imports expired on Aug. 31 and the U.S. biofuels industry and lawmakers have pressured the Trump administration to negotiate for the tariff-rate quota to be re-established. Meanwhile, Brazil has been pushing for more access to the U.S. sugar market.

“Brazil and the United States have held consultations regarding their bilateral trade on ethanol,” USTR and the Brazilian government said in a joint statement,

“As a result, they have decided to conduct results-oriented discussions on an arrangement to improve market access for ethanol and sugar in Brazil and the United States. They will also consider an increase in market access for corn in both countries.

“The two countries will also discuss ways to ensure there is fair market access along with any increase in the consumption of ethanol, as well as to coordinate and ensure that the ethanol industries in both countries will be treated fairly and benefit from future regulatory changes on biofuel products in Brazil and the United States. The discussions should aim to achieve reciprocal and proportional outcomes that generate trade and open markets to the benefit of both countries.

“Such discussions will take place over a 90-day period starting on Sept. 14, 2020. During such time, Brazil will maintain a pro-rata tariff-rate quota (TRQ) for ethanol proportional to the total annual volume of the TRQ that was in force on Aug. 30, 2020.

“Brazil and the United States agreed to proceed in this manner in the spirit of the economic partnership created under the leadership of Presidents [Donald] Trump and [Jair] Bolsonaro, acknowledging the need to continue to constructively address the effects of the crises generated by the COVID-19 pandemic on their bilateral trade and domestic production.”

Phillip Hayes, a spokesman for the American Sugar Alliance, which represents U.S. beet and cane growers, said in an email, “For decades Brazil has enjoyed significant access as a major supplier to the U.S. sugar market — more access than all but one of the 40 countries that have guaranteed access under the World Trade Organization.

“The conversations between the U.S. and Brazil are of interest as there are a number of implications for stakeholders both domestic and foreign, and we look forward to working with the administration as talks continue.”


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