UNICA threatens WTO intervention over tariff

Ethanol Producer Magazine
December 2010
By Kris Bevill
Posted Dec. 8, 2010

The Brazilian Sugarcane Industry Association, UNICA, said it will encourage the Brazilian government to initiate dispute settlement proceedings at the World Trade Organization if currently proposed legislation to continue the ethanol import tariff passes the U.S. Congress.

While final details are yet to become available, it is believed that the tax extension package currently being finalized in the U.S. Senate contains language that would continue the Volumetric Ethanol Excise Ethanol Credit at a rate of 36 cents per gallon and would also continue the ethanol import tariff at its current rate of 54 cents per gallon. Joel Velasco, UNICA’s chief representative in North America, said this would essentially double the import tariff, making it impossible for Brazilian exports to enter the U.S. market. “The stated rationale for the ethanol import tariff has always been to offset the blenders’ tax credit and prevent Americans from subsidizing foreign energy production,” he said. “This move would transform it from an offset to a punitive trade barrier.”

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