They announced that they will also increase access to the sugar market

| 09/12/2020 | ionicons-v5-c21: 50 | . |

BRAZIL.- Brazil and the United States established an agreement for the importation by the South American country of US ethanol free of tariff rates for three months, as happens between the Mercosur countries, according to the Ministry of Foreign Affairs reported this Saturday.

The agreement, signed on Friday by representatives of both countries, also contemplates the establishment of a bilateral dialogue for ninety days, starting Monday, to « increase access to the sugar and ethanol market » in the two countries and an « increase » also in the corn segment.

The two countries are the largest ethanol producers in the world, with corn as a raw material for North Americans and sugar cane for Brazilians.

Until August 30, the import tax for ethanol and other countries outside Mercosur, a bloc made up of Brazil, Argentina, Uruguay and Paraguay, was 20%, a rate that will be reduced to zero in the next ninety days.

The president of the United States, Donald Trump, even contemplated a « retaliation » for the Brazilian ethanol bought by his country, in the case of the South American giant maintaining the tariffs.

« The discussions should seek to achieve reciprocal and proportional results that generate trade and open markets for the benefit of both countries » and « benefit from future regulatory changes in biofuel products, » the joint statement said.

In 2019, Brazil imported 1,457 million liters of ethanol, with almost 91% coming from the United States and a tax-free quota of 750 million liters.

Since the end of the last decade, the entire fleet of automobiles produced in Brazil comes out with « flex fuel » technology, which allows combustion with fossil gasoline, ethanol or a random combination of both.

Furthermore, by law, all gasoline marketed in Brazil receives a mandatory mixture of 25% ethanol, a fuel alcohol that also began to be implemented in some heavier motor vehicles, such as some buses.