US wants review on ethanol to negotiate steel rate with Brazil

US wants review on ethanol to negotiate steel rate with Brazil

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Americans seek to discuss fuel sales limits, according to Fiesp director; meeting was held on Tuesday in Washington.

To avoid imposing surcharges on steel and aluminum from Brazil, the United States wants a revaluation of the quota on US ethanol implemented by the government of Michel Temer . The information is from Fiesp’s Director of Foreign Trade, Thomaz Zanotto. According to him, the Americans also seek a compromise so that China does not triangulate steel shipments through the Brazilian territory to their country.

US President Donald Trump has announced rates for importing steel and aluminum. After pressure, the US government admitted to negotiating the collection with some countries, including Brazil in that group.

“It is a fact that the paradigms of trade negotiations with the United States have changed,” Zanotto said, explaining that the preconditions put by the United States serve only to start de facto trading on the higher metals tariffs.

Items such as respect for intellectual property and production in the United States, measures against steel triangulation, and national security issues were established at a meeting held in Washington on Tuesday as premises for negotiations with Brazil by representatives of the US government, Zanotto, who had access to the discussions.

A spokesman for the Brazilian Foreign Ministry confirmed that the meeting had taken place but declined to comment on the discussions.

The United States took advantage of the initial talks on steel and aluminum to discuss the revision of Brazil’s import tariffs imposed on ethanol in September after local industry saw fuel prices plummet in the domestic market as a result of soaring foreign purchases.

According to the decision of the Chamber of Foreign Trade (Camex), imports of ethanol without tariff are limited to 150 million liters per quarter, or 600 million liters per year, for a period of 24 months. Above these volumes, there is a rate of 20% and the United States is a major producer of ethanol.

Another topic that is not related to the steel and aluminum sector and concerns Washington, according to the director of Fiesp, is that Anvisa conduct a technical investigation on fish imported from Alaska, similar to Asian fish whose importation was banned last year in the Brazil.

The United States also questioned Temer’s delay in sanctioning the open-skies agreement with the US, approved by Congress last year.

Negotiations
Another source of Brazilian diplomacy reacted cautiously to the list of assumptions that the US puts to Brazil, and stressed that the risk of triangulation is very small, since China manufactures final products and Brazil, inputs. Brazilian steel production complements the American and there is harmony in national security and protection of intellectual property, added the diplomat.

According to Zanotto, the Brazilian situation is relatively comfortable because it has a trade deficit with the United States and 80% of the tariff is composed of negotiations between units of the same company. In addition, domestic steel products are used as inputs by US companies that would have to turn to China, Russia and Iran for similar products.

“The USTR wants to solve trade problems and negotiate a duty free quota for steel exporters,” Zanotto said.

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