Washington, D.C. – Congressman Darin LaHood (IL-16), a member of the Ways and Means Committee, led a bipartisan group of Members of Congress to urge the U.S. Trade Representative (USTR) Katherine Tai to prioritize ethanol export competitiveness and address unfair import tariffs imposed on American ethanol by Brazil.
In a letter, signed by 21 members, Rep. LaHood and his colleagues highlighted the importance of biofuel and ethanol production for rural communities throughout the country. Recently announced import tariffs by Brazil on American ethanol would negatively impact American agriculture, which previously received duty-free treatment from Brazil.
In the letter, the Members wrote in part, "We believe the double layer issue of a tariff imbalance and an impenetrable RenovaBio is unjustified and puts American ethanol and farmers at risk. We strongly urge you to prioritize American ethanol export competitiveness in the Brazilian market by addressing these unfair policies. Further, if Brazil continues with its unfair treatment of American ethanol, we stand ready to work with you to consider measures that protect U.S. farmers and biofuels producers and counter these unfair trade practices."
In a statement, Growth Energy CEO Emily Skor said, “We’re grateful to Rep. LaHood and all cosigners of the letter to Ambassador Tai for raising the concerning dual challenges that American ethanol producers face in Brazil while Brazilian ethanol exports receive duty-free treatment here in the U.S. Growth in the international export market is essential to the strength of American ethanol and our nation’s ag economy. We look forward to working with these Members and Ambassador Tai to ensure a level trade playing field.”
In addition to Rep. LaHood, the letter was signed by U.S. Representatives Mark Alford (R-MO), Don Bacon (R-NE), James Baird (R-IN), Mike Bost (R-IL), Nikki Budzinski (D-IL), Angie Craig (D-MN), Randy Feenstra (R-IA), Brad Finstad (R-MN), Michelle Fischbach (R-MN), Mike Flood (R-NE), Bill Foster (D-IL), Sam Graves (R-MO), Dusty Johnson (R-SD), Dan Kildee (D-MI), Mike Lawler (R-NY), Mariannette Miller-Meeks (R-IA), Zach Nunn (R-IA), Mark Pocan (D-WI), Adrian Smith (R-NE), and Victoria Spartz (R-IN).
The full text of the letter can be read here and below.
The Honorable Katherine Tai
United States Trade Representative
600 17th St NW
Washington, DC 20508
Dear Ambassador Tai:
We write to raise a critical international trade issue that is having a detrimental impact on the American agricultural economy.
On February 1, 2023, the Brazilian Foreign Trade Chamber (Camex) reinstated an import tariff on American ethanol shipped to Brazil. The new tariff rate on ethanol will be 16 percent this year and 18 percent in 2024. Before this announcement, American exports of ethanol to Brazil had received duty-free treatment since March 2022. This tariff increase is especially concerning given the duty-free treatment Brazilian ethanol exports receive in the U.S. market.
Additionally, there are non-tariff barriers that further complicate our bilateral ethanol trade with Brazil. Brazilian ethanol producers have access to our Renewable Fuel Standard and California’s Low Carbon Fuel Standard program, which recognize the inherent value of low-carbon biofuels. This treatment is not reciprocated by Brazil, where U.S. ethanol producers, after two years, have yet to be approved for Brazil’s biofuel program, RenovaBio.
Currently, U.S. biofuel production supports 555,000 jobs across the country and the U.S. ethanol industry annually produces roughly 16 billion gallons of low carbon, renewable fuel that helps reduce prices at the pump. The ethanol industry purchases 500 million bushels of corn per year that are exported as finished fuel grade ethanol. The value of that purchased corn is about $2.5 billion, while the ethanol exported is worth about $4 billion. The ethanol industry also exports 11 million metric tons of dried distillers grains (DDGS), a nutrient-rich animal feed made during ethanol production, worth approximately $4 billion. Brazil’s unfair treatment of U.S. exports and the unlevel playing field for American ethanol could displace American ethanol and harm the rural communities we represent.
We believe the double layer issue of a tariff imbalance and an impenetrable RenovaBio is unjustified and puts American ethanol and farmers at risk. We strongly urge you to prioritize American ethanol export competitiveness in the Brazilian market by addressing these unfair policies. Further, if Brazil continues with its unfair treatment of American ethanol, we stand ready to work with you to consider measures that protect U.S. farmers and biofuels producers and counter these unfair trade practices.
We appreciate your attention to this matter and look forward to the opportunity to discuss ways to address this trade imbalance with Brazil.
Sincerely,
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