RIO DE JANEIRO (Reuters) – Brazil’s tariff-free ethanol import quota with the United States will end on Monday as talks between the two countries on opening up their ethanol and sugar markets have broken down, a Brazilian government source told Reuters on Friday.
This means tariffs on U.S. ethanol imports will go back to 20%, the rate imposed by Mercosur on imports from outside the bloc, said the source who requested anonymity because he is not authorized to speak to the press.
“Zero progress in the negotiations, and the quota expires on Dec. 14,” he said.
In an email to Reuters late on Friday, Brazil’s ministry of foreign affairs said talks are still going on, however.
Brazil in September extended the tariff-free ethanol import program with the United States on 187.5 million liters of ethanol imports, giving 90 days for both countries to discuss ways in which they could open up their respective markets.
The measure was unpopular with Brazilian producers but was seen as a sign of goodwill to the United States, the biggest importer from Brazil, whose government has viewed outgoing President Donald Trump as an important ally.
(Reporting by Rodrigo Viga Gaier and Roberto Samora, writing by Jamie McGeever; Editing by Sonya Hepinstall)
