Brazil sees WTO ethanol case against U.S. soon

RIO DE JANEIRO (Reuters) - Brazil, the world's largest ethanol exporter, may soon challenge the United States at the World Trade Organization over its tariffs on imports of the fuel, Foreign Minister Celso Amorim said on Tuesday.

"My reading is that we have a very strong case and so there is a good chance we will challenge," Amorim told reporters in Rio de Janeiro.

Exporters see the import tariff of 54 cents per gallon as an obstacle to shipments of sugar-cane-based ethanol to the United States, which has been developing its own ethanol market based on corn.

Brazil's Sugar Cane Industry Association hired lawyers to study the compatibility between the U.S. tariff and WTO rules. The collapse of the Doha Round of world trade talks in July made litigation against the United States more likely.

Amorim said the case could be presented in the next one or two months, depending on final consultations with producers and the government's lawyers.

The U.S. ethanol produced from maize is far more expensive than Brazil's ethanol derived from sugar cane.

Brazil, which tried to forge a common front of developing nations in the Doha Round, is also resuming action at the WTO to take retaliatory trade measures against the United States over subsidies it pays its cotton farmers.

The WTO cleared the way in June for Brazil to seek up to $4 billion in trade sanctions on U.S. imports in retaliation for the cotton subsidies.

Amorim warned that unless the world trade talks started again within 4-6 weeks, the issue would be overshadowed by the U.S. presidential elections on November 4 and the negotiations could then face a three-year period of "hibernation."

"I think we would need at least two or maybe three years (to get the talks started again)," he said.

(Reporting by Julio Villaverde; Writing by Stuart Grudgings; Editing by John O'Callaghan)