US ethanol duties anger Brazilian firms
producers want President Luiz Inacio Lula da Silva to press President Bush to remove a steep U.S.
import tariff on the increasingly important fuel when he visits Brazil next
While Brazilian producers are able to avoid the 54-cent-a-gallon
direct-import tariff by shipping ethanol to the United States via the Caribbean,
there are other costs involved, including an unfavourable exchange rate, that
make it hard for them to compete.
Under the Caribbean Basin Initiative
trade agreement, Brazilian hydrous ethanol can be shipped to the Caribbean and
processed into anhydrous ethanol for re-export. Even though direct shipments to
the United States were higher than those via the Caribbean, Brazilian producers
say that the U.S. tariff is still unjustified.
"The ethanol market could
be much bigger, if he Bush considered free or less restricted imports," said
Plinio Nastari, president of analytical firm Datagro. Last year, Brazil exported
475.5 million litres (125.6 million gallons) of ethanol to the United States,
according to the International Ethanol Trade Association in Sao
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