Brazil launches campaign to remove ethanol tariff

By Kris Bevill | June 02, 2008
Web exclusive posted July 3, 2008 at 3:23 p.m. CST

The Brazilian Sugarcane Industry Association is launching a public relations campaign on the Fourth of July designed to encourage the American public to pressure the U.S. Congress into removing the 54-cent ethanol import tariff. The 2008 farm bill extended the tariff, designed to support an emerging U.S. ethanol industry and to prevent foreign ethanol producers from benefiting from American subsidies, through 2010.

The Are We There Yet? campaign, which consists of an interactive Web site and television ads, is supported by various U.S. food and meat processing companies. The association chose to launch its campaign on the Fourth of July holiday because it's one of America's busiest travel holidays.

"Americans are being denied an opportunity to save money at the pump," said Joel Velasco, chief representative for UNICA. "There is a solution that could have an immediate impact on [the] price at the pump - lifting the tariff on imported ethanol."

The campaign will initially focus on consumers in Florida, a state that has a growing ethanol demand, and California, the nation's largest consumer of gasoline. As well, UNICA has recently received favorable support from both states. Florida Gov. Charlie Crist has been a staunch supporter of increasing the use of ethanol in his state and has shown some interest in removing the ethanol tariff, according to UNICA. Sen. Dianne Feinstein, D-Calif., cosponsored a bill recently introduced in the U.S. Senate that would eliminate the tariff.

Renewable Fuels Association President Bob Dinneen said the Brazilian-led campaign is "intentionally designed to mislead and misinform Americans about Brazilian ethanol and American biofuels policy. America does not tax nor does it prevent imports of Brazilian ethanol from entering our market. Rather, it ensures through the offsetting secondary tariff that Brazilian ethanol producers cannot reap subsidies from American taxpayers." Dinneen also pointed out that substantial quantities of foreign ethanol still enter the U.S. market through a trade loophole known as the Caribbean Basin Initiative and other foreign producers pay the tariff to import their product.

Dinneen said removing the ethanol tariff would do nothing to lower gas prices in the U.S. According to Velasco, U.S. gas prices would be reduced by allowing Brazilian ethanol to enter the market and create market competition, while offering additional fuel alternatives to the American motoring public.