Doubling Import Tax on Ethanol Will Escalate Brazil-U.S. Trade Conflict, Says Brazilian Sugarcane Industry Association

By Brazilian Sugarcane Industry Association unica, PRNE
Monday, December 6, 2010

SAO PAULO, December 7, 2010 - In light of ongoing negotiations in the U.S. Congress, regarding the
future of subsidies in support of domestic ethanol production and the US$0.54
per gallon tariff imposed on imported ethanol, the Brazilian Sugarcane
Industry Association (UNICA) is issuing the following statement. All remarks
should be attributed to UNICA President & CEO, Marcos Jank:

"For 30 years, the United States has been subsidizing corn ethanol and
imposing trade barriers on imported ethanol. Over the last three years, UNICA
has sought to engage with various stakeholders in the United States in an
effort to reform U.S. ethanol policy in a way that reduces trade distortions
and would avoid trade conflict. However, after being rebuffed twice - first
in the Bush Administration's 2008 Farm Bill and now apparently during the
Obama lame duck negotiations - it is clear that the United States is not
committed to open and fair trade in clean energy, particularly ethanol.

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. Unfortunately, lame duck legislation negotiated by the
President and Congressional leaders is set to double the import tax on clean,
affordable alternatives like sugarcane ethanol from nine to 18 cents and
transform the tariff from an offset to a punitive trade barrier.

Consequently, UNICA will urge the Brazilian government to initiate
dispute settlement proceedings at the World Trade Organization (WTO) as soon
as this legislation passes Congress and is signed by President Obama. We will
have exhausted all options to resolve our differences through informal
dialogue and the U.S. legislative process. It will then be time for the WTO
to resolve this matter in accordance with applicable international rights and

For more information, please visit


The Brazilian Sugarcane Industry Association (UNICA - represents the top producers of sugar, ethanol and
bioelectricity in the country's South-Central region, especially the state of
Sao Paulo, which accounts for about 50% of the country's sugarcane harvest
and 60% of total ethanol production. In 2009, Brazil produced an estimated
605 million metric tons of sugarcane, raw-material used to produce 33 million
tons of sugar and 26 billion liters of ethanol.

    CDN Corporate Communications - Sao Paulo
    Rosa Webster - +5511-3643-2707 -
    Mariane dos Santos - +5511-3643-2730 -

    In Washington:
    Ana Carolina Lessa - +1-202-506-5299 -

CDN Corporate Communications - Sao Paulo, Rosa Webster, +5511-3643-2707, rosa.webster at; Mariane dos Santos, +5511-3643-2730, mariane.santos at; or Washington: Ana Carolina Lessa, +1-202-506-5299, anacarolina at

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