U.S. Senate Decision on Bush-Era Tax Cuts 'Disappointing,' Should Lead to WTO Dispute Settlement on Ethanol Protection, Says Brazilian Sugarcane Industry Association

By Brazilian Sugarcane Industry Association unica, PRNE
Tuesday, December 14, 2010

SAO PAULO, December 15, 2010 - Following today's U.S. Senate decision (81-19) to approve an US$858
bill extending the Bush-era tax cuts for two years - a bill that
maintains ethanol subsidies and a US$0.54 per gallon tariff on imported
ethanol, the Brazilian Sugarcane Industry Association (UNICA) is issuing the
following statement. All remarks should be attributed to UNICA President
Marcos Jank.

"Despite calls from across the country - including nearly 100 newspaper
editorials, over 80,000 letters from clean energy advocates, and opposition
from a bipartisan group of Senators and one of the broadest coalitions
imaginable - the U.S. Senate voted today to extend the subsidies and trade
protection for U.S. ethanol producers for one more year.

While we were disappointed with today's outcome, and the expected rubber
stamp by the U.S. House of Representatives, we know that the days of ethanol
subsidies and trade protection are near the end, either because they will
expire at the end of 2011 or as a result of litigation at the World Trade
Organization (WTO).

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.

As we have stated previously, we urge the Brazilian government to
initiate dispute settlement proceedings at the World Trade Organization
(WTO). 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 obligations."


The Brazilian Sugarcane Industry Association (UNICA - www.unica.com.br)
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 - rosa.webster@cdn.com.br
    Mariane dos Santos - (+5511)3643-2730 - mariane.santos@cdn.com.br

CDN Corporate Communications - Sao Paulo: Rosa Webster, +55-11-3643-2707, rosa.webster at cdn.com.br or Mariane dos Santos, +55-11-3643-2730, mariane.santos at cdn.com.br

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