Brazil announced it has raised the quota on U.S. ethanol imports under the tariff rate quote (TRQ) up from 600 million liters per year to nearly 750 million liters per year. The TRQ regulates the threshold of ethanol that can be imported into Brazil without triggering a tariff. After the new announcement, energy groups showed their disappointment.
Geoff Cooper, President and CEO, Renewable Fuels Association said, “Brazil’s decision to maintain its protectionist trade barrier against U.S. ethanol is extremely disappointing and represents a major setback in our relationship with the Brazilian sugar and ethanol industry. The token increase in the quota does nothing to provide relief to Brazilian consumers who face higher fuel prices because of Brazil’s discriminatory policy.
“Not only is the U.S. market wide open to ethanol imports from Brazil, but our Renewable Fuel Standard actually incentivizes imports by characterizing sugarcane ethanol as an advanced biofuel. But there is nothing ‘advanced’ at all about the unfair and unlevel playing field created by Brazilian trade barriers. In light of Brazil’s action, it may be time for U.S. policymakers to reconsider our open-door trade policy regarding sugarcane ethanol.”
Ryan LeGrand, President and CEO, U.S. Grains Council said,“We are very disappointed Brazil did not fully consider the vast information we and the U.S. government provided them showing the detrimental and negative impact this TRQ has on Brazilian consumers by raising prices at the pump. We will actively encourage review of this policy, which inhibits trade between our countries and hinders the development of a robust global ethanol marketplace. Free and reciprocal fair trade between the world’s two largest ethanol producers should be a model for other countries to follow. Instead Brazil is showing other countries a path to construct barriers to trade, which will hurt all consumers in the short, medium and long terms.”
Emily Skor, CEO, Growth Energy said, “We appreciate the U.S. government’s efforts to raise the TRQ, however we are disappointed that Brazil did not remove their tariff completely to allow a fully open market. Brazilian ethanol continues to have virtual tariff-free access to the U.S. and puts U.S. ethanol producers at a disadvantage at a time when they need it most. We will continue working with U.S. government officials, the Brazilian government, and our allies to truly open the ethanol market and build a strong trade relationship for decades to come.”