BRASILIA, Sept 12 (NNN-AGENCIES) — The United States and Brazil said
they had reached a deal for the South American country to temporarily
resume tariff-free ethanol imports, a political win for President Donald
Trump.
Ethanol is a key agricultural export for Iowa, a battleground state in the
upcoming US election, and the Trump administration had lobbied to retain
zero-tariff access to Brazil, a leading market.
Brazil had previously exempted up to 750 million liters (200 million
gallons) a year of imported ethanol from tariffs.
However, it let the benefit expire on Sept 1, reinstating a 20-
percent tariff.
In a joint statement, the two countries said they had agreed to hold trade
talks for a 90-day period starting Sept 14, and return to the previous
tariff-free arrangement during that time.
The talks will focus on ethanol, sugar — which Brazilian producers want
to sell tariff-free in the US — and possibly corn, the two sides said.
“The discussions should aim to achieve reciprocal and proportional
outcomes that generate trade and open markets to the benefit of both
countries,” they said.
The US ambassador in Brazil, Todd Chapman, has reportedly lobbied hard to retain the ethanol exemption.
Chapman is now facing an inquiry before the US House of Representatives’
Foreign Affairs Committee over reports he violated a law barring federal
officials from engaging in partisan activities by telling Brazilian
counterparts that a renewal of the ethanol exemption would help Trump’s re-election chances.
Brazilian President Jair Bolsonaro has sought to cultivate a close
relationship with Trump, whom he openly admires.
But Bolsonaro also faces a powerful agricultural lobby at home.
Ethanol is big business for sugarcane producers in Brazil, who are pushing
for tariff-free access to the US sugar market.
Brazil and the United States lead the world in ethanol production,
together accounting for nearly 85 percent of supply.
Brazil’s ethanol is mostly made from sugar, while US ethanol mostly comes
from corn.
Both countries’ producers face slumping fuel demand at home because of the coronavirus pandemic, and are keen to boost exports.
The US exported more than 1.25 billion liters of ethanol to Brazil last
year, and imported 738 million liters of Brazilian ethanol. — NNN-AGENCIES
