Brazil’s sugar industry presses for WTO challenge to US ethanol program

After the U.S. Senate voted yesterday in favor of the Obama Administration’s tax bill, Brazil’s sugar industry said it will now press the new incoming government in the South American country to challenge U.S. government supports for ethanol.

The Brazilian Sugarcane Industry Assn. (UNICA) said in a press statement issued December 15 in Sao Paulo the tax bill approved by the US Senate in an 81-19 vote “maintains ethanol subsidies and a US$0.54 per gallon tariff on imported ethanol.”

"Despite calls from across the country – including nearly 100 newspaper editorials, over 80,000 letters from clean energy advocates, and opposition from a bipartisan group of senators and one of the broadest coalitions imaginable – the U.S. Senate voted today to extend the subsidies and trade protection for U.S. ethanol producers for one more year,” UNICA President Marcos Jank said.

“While we were disappointed with today's outcome, and the expected rubber stamp by the U.S. House of Representatives, we know that the days of ethanol subsidies and trade protection are near the end, either because they will expire at the end of 2011 or as a result of litigation at the World Trade Organization (WTO).”

The industry group said it has been trying to work with U.S. industry and lawmakers for three years to try to reform American ethanol programs to “reduce trade distortions,” and “avoid trade conflict.”

“After being rebuffed twice – first in the Bush Administration's 2008 Farm Bill and now apparently during the Obama lame duck negotiations – it is clear that the United States is not committed to open and fair trade in clean energy, particularly ethanol,” UNICA said.

Now it is time for the new government due to take power in Brazil at the start of the new year to launch a dispute against the U.S. ethanol program at the World Trade Organization, Jank’s group said.

“We urge the Brazilian government to initiate dispute settlement proceedings at the World Trade Organization,” the industry group said. “We will have exhausted all options to resolve our differences through informal dialogue and the U.S. legislative process. It will then be time for the WTO to resolve this matter in accordance with applicable international rights and obligations.”

Brazil has had some success in its trade challenges before the WTO in cases like US cotton. Last year Brazil produced 26 billion liters of ethanol.

source: feedstuffs