U.S. ethanol and corn interests are expressing even more disappointment at Brazilian decisions relative to their imports of U.S. ethanol.
On August 31, Brazil announced it was increasing the tariff-free quota for imports of U.S. ethanol to 750 million liters (198 million gallons) from a prior 600 million liters (158 million gallons). Imports above that level would be subject to a 20% import tariff.
Last week, Brazil also introduced a seasonality clause for the imports, saying that from Aug. 31, 2019 through Feb. 29, 2020, another 200 million liters (53 million gallons) could be imported without the 20% tariff, with 275 million liters (73 million gallons) able to imported each quarter without the tariff from March 1, to August 31, 2020.
The quota reflects the cycle of when Brazilian producers are producing more domestic ethanol, according to the U.S. Grains Council.
While expressing disappointment earlier this fall that the tariff-free quota was not eliminated and only increased, now U.S. interests complain the latest move to include seasonality provisions further restricts U.S. shipments.
“The decision by Brazil to place seasonal restrictions on its tariff rate quota for U.S. ethanol is disappointing and puts up additional roadblocks to free trade, hurting consumers and our respective ethanol industries,” the U.S. Grains Council, Growth Energy and the Renewable Fuels Association said in a joint statement. “The action by Brazil to impose seasonal restrictions on the sale of ethanol does not create a case study in leading by example, but rather the opposite - it is up-ending real opportunities for free trade.”
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