• The Heritage Network
    • Resize:
    • A
    • A
    • A
  • Donate
  • Brazil to Fight Ethanol Tariffs

    The Brazilian is preparing to bring the fight over ethanol tariffs to the World Trade Organization’s doorstep. Currently there is a 54 cent tariff on the importation of ethanol into the United States, and Roberto Azevedo, Brazil’s WTO ambassador, said there was a “strong possibility” that the country would formally file a complaint to the WTO in September. Advocates of the tariff suggest that it will protect American farmers and considers ethanol outside the WTO’s jurisdiction.

    The ethanol tariff is a blatant violation of free trade principles and does nothing to reduce America’s dependency on foreign oil. After all, if the U.S. wanted to import less oil from OPEC and hostile regimes, wouldn’t it make sense to import as much ethanol as possible, especially in a time where the U.S. is promoting the use of clean energy?

    Renewable fuels, and particularly corn-ethanol, have long enjoyed preferential treatment from the federal government here at home. This includes a tax credit worth $0.51 per gallon. In addition, tariffs discourage imports of ethanol, including potentially cheaper sugar cane–based ethanol from Brazil.

    Yet the ethanol industry still wanted more, and Congress, concerned about high gas prices, global warming, and domestic energy production, enacted a mandate. The 2005 energy bill contained the first-ever requirement that renewable fuels be mixed into the gasoline supply. The 2007 energy bill increased the mandate substantially. The U.S is now committed to using 9 billion gallons in 2008, rising to 36 billion by 2022.

    Now that food prices have risen dramatically, there is bipartisan consent, along with statements from environmental and global hunger groups, that the ethanol mandate has been disastrous. To make matters worse, Brazilian ethanol is cheaper, cleaner, and more energy efficient since it’s produced from sugar.

    Furthermore, in his speech at The Heritage Foundation, Dr. Ray Walser said that lifting the ethanol tariff would have a catalytic effect on U.S.-Brazil relations:

    This positive move could also encourage Brazilians and oth­ers to invest in more research in promising second-generation biofuels such as cellulosic ethanol. Also, working with Brazil to revitalize the Doha Round of global free trade talks will strengthen our hand and forge a stronger U.S.–Brazil partnership.”

    Posted in Energy [slideshow_deploy]

    4 Responses to Brazil to Fight Ethanol Tariffs

    1. Beauregard says:

      Brazil's tariff is perfectly fine with me. We have enough corn here in the good old U.S. of A. to create enough clean, reliable, American ethanol.

      And as far as the arguments about a "food crisis," I think that the energy crisis is much more serious and that corn ethanol technologies will only continue to improve as the oil wells dry up.

    2. EtherNas05 says:

      Me too. Production of ethanol certainly doesn't raise food prices – in fact, we're saving between $28 and $49 billion a year on what we pay for gasoline because of ethanol. The facts are that its one of the easiest solutions to reduce foreign oil imports and one of the ones we know works.

    3. EnvioGirl says:

      If you two did your research, you would see that the production of corn ethanol is leading to the starvation of millions of people. Why should we be completely selfish and try to get energy when people in Africa, India, Mexico, and Brazil are starving because we don't produce enough corn for ethanol and food and we're taking away their food? Get a clue people.

      • Joe JOe says:

        Its because they are farmers and want to continue to make six figures for a job that deserves much less. It makes much more sense to pay our farmers much less and import ethanol.

    Comments are subject to approval and moderation. We remind everyone that The Heritage Foundation promotes a civil society where ideas and debate flourish. Please be respectful of each other and the subjects of any criticism. While we may not always agree on policy, we should all agree that being appropriately informed is everyone's intention visiting this site. Profanity, lewdness, personal attacks, and other forms of incivility will not be tolerated. Please keep your thoughts brief and avoid ALL CAPS. While we respect your first amendment rights, we are obligated to our readers to maintain these standards. Thanks for joining the conversation.

    Big Government Is NOT the Answer

    Your tax dollars are being spent on programs that we really don't need.

    I Agree I Disagree ×

    Get Heritage In Your Inbox — FREE!

    Heritage Foundation e-mails keep you updated on the ongoing policy battles in Washington and around the country.

    ×