July 28, 2008

UNICA Seeks Access to Global Markets, Tariff Cuts for Brazilian Ethanol

The Brazilian Sugarcane Industry Association has said that it expects access to major markets around the globe for Brazilian sugarcane ethanol with lower tariffs and full integration of ethanol in global trade, at the newest phase of the Doha Round of negotiations of the World Trade Organization in Geneva, Switzerland.

Marcos Jank, president and CEO of the Brazilian Sugarcane Industry Association (UNICA), said: "What we expect now is full integration for ethanol into global trade. Ethanol should not be treated any differently because currently it is not considered a sensitive product in Europe or the US. We are not talking about quotas as some have been suggesting, but tariff cuts duly calculated using the formula already agreed to by negotiators."

According to the UNICA, as is the case with all agricultural products, European and US tariffs imposed on imported ethanol will have to be reduced once the formula is applied.

According to the World Trade Organization (WTO), tariffs between 20% and 50%, the range covering EU tariffs on ethanol, must be reduced by 57%; while tariffs between 50% and 75%, the range covering ethanol tariffs charged in the US, should be cut by 64%.

The Brazilian industry group noted that five years after these cuts are implemented, the EU tariff will come down from E19.2 per hectoliter to E8.25 per hectolitre; while the US tariff will be 0.9% plus $0.195 per gallon, down from 2.5% plus $0.54 per gallon.