U.S. Trade Representative Ambassador Katherine Tai assured lawmakers her office is in talks with Brazil concerning frustrations surrounding the country's tariff on U.S.-imported ethanol.

The current duty stands at 18% on all incoming U.S. ethanol, while Brazilian ethanol imported into the U.S. enjoys free access within the U.S. market.

U.S. farmers already face increasing competition from Brazil's agricultural industry, especially as demand for ethanol-to-jet sustainable aviation fuel (SAF) is expected to climb in the coming years.

Referring to a media report that Brazil is rebuffing U.S. pressure to abandon the ethanol tariff, U.S. Rep. Darin LaHood, R-Dunlap, asked Tai during a House Ways and Means Committee hearing to comment on the current negotiations.

U.S. Rep. Darin LaHood, R-Dunlap, asks U.S. Trade Representative Ambassador Katherine Tai about negotiations with Brazil concerning the South American country's tariff on U.S.-imported ethanol during a House Ways and Means Committee hearing April 16 on the Biden administration's 2024 trade policy. 

"It's immensely frustrating for our ethanol producers in this country, the current situation with Brazil," LaHood said during the hearing focusing on the Biden administration's 2024 trade policy agenda.

Tai assured LaHood they are "on the same page" with this issue.

"We continue to engage with Brazil. As recently as a couple weeks ago, my chief ag negotiator had a meeting with their agriculture ministry," Tai said. "We continue to work this issue and I have been given assurance by my counterparts in Brazil that they understand how important this issue is to us. We are working to find ways to relieve the tensions in this part of our relationship."

Earlier this month, the Renewable Fuels Association, U.S. Grains Council and Growth Energy jointly submitted comments within the Brazilian Chamber of Foreign Trade (CAMEX) advocating for restrictive measures to entry for Brazilian ethanol into the U.S., in the case the Brazilian government does not rethink the current tariff policies.

In October 2023, ABICOM (the Brazil association of fuel importers) formally requested a reduction in ethanol duties because the tariff reportedly raised fuel costs for domestic consumers.

In anticipation of an open comment period, the three groups submitted joint comments to the Brazilian government:

"Despite the promising opportunities emerging new ethanol export markets could bring to both countries, we stress that we are not willing to cooperate with Brazil in any possible partnerships, nor with technology transferring or within new uses for ethanol such as SAF, in case the market is not completely open for free trade for ethanol," the organizations wrote. "We strongly consider the permanent reinstatement of the duty-free access for ethanol as a window of opportunity to strengthen the bilateral agenda and stimulate trade cooperation between Brazil and the United States.”

Letters from Congress last month to Tai, USDA Secretary Tom Vilsack and President Joe Biden pushed for answers on the administration's trade policy agenda. LaHood helped pen one of the letters, urging Tai and Vilsack to engage during CAMEX’s comment period to further highlight the issue and remind CAMEX that the tariff imbalance puts American ethanol, farmers and rural communities at a severe economic disadvantage.

 

Source:farmweeknow

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