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Report: US seeks review of Brazil ethanol quota before tariff talks

The U.S. wants Brazil to review ethanol import quotas and finalize the open skies air deal as conditions for talks over tariffs on the South American nation's steel and aluminum exports, Reuters reported, citing Thomaz Zanotto, foreign trade director at industry group FIESP.

Trump administration officials also want Brazil to stop China from finding a way around tariffs it has applied. The U.S., in return, will support Brazil's membership in the Organization for Economic Cooperation and Development, or OECD, a 35-member Paris-based intergovernmental organization.

The open skies deal will deregulate flights between the two countries. The Brazilian Senate earlier in the month approved the deal, which will allow a partnership between American Airlines Group Inc. and LATAM Airlines Group S.A.

Brazil, which is the second-largest steel supplier to the U.S., has a 20% tariff on ethanol imports over 150 million tons per quarter, as it looks to protect local production. Brazil exported $3 billion worth of iron ore-based products to the U.S. in 2017, Reuters noted.

Brazil's ministry of foreign affairs acknowledged the meeting but declined to provide details of the proceedings.The U.S. Trade Representative's office did not immediately return Reuters' calls and email requests for comments.