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

SAO PAULO, Dec. 15, 2010 /PRNewswire/ -- Following today's U.S. Senate decision (81-19) to approve an US$858 billion 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."

ABOUT UNICA

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.

SOURCE Brazilian Sugarcane Industry Association (UNICA)