Brasilia: Brazil’s sugarcane industry urged President Luiz Inacio Lula da Silva to press his US counterpart George W. Bush to lower trade barriers on Brazilian ethanol.
Ahead of a meeting of the two leaders next week, the president of the Sugarcane Industry Union, Eduardo Carvalho, urged Lula on 1 March to transmit the message “to president Bush of our unshakable will for opening markets”.
“The oil derivatives market operates on the basis of free trade. Therefore, we cannot accept that ethanol trade is conducted in a 19th century manner, with market protections,” Carvalho told reporters.
Brazil is the world’s top exporter of ethanol and is a leading producer of the fuel, along with the US, which extracts it from corn rather than sugarcane.
According to data from the Sugarcane Industry Union, known as UNICA by its Portuguese initials, Brazil produces 18 billion litres (four billion gallons) of ethanol annually. It exports 3.5 billion litres (769.9 million gallons), of which 2.5 billion (549.9 million gallons) are sold in the US.
Brazilian Foreign Minister Celso Amorim, acknowledged that ethanol and biofuels in general will be a “very important” theme of the meeting that Lula and Bush will hold on 9 March in Sao Paulo. “We are interested in forming a global ethanol market,” he said.
Amorim said Brazil intended to put the tariffs issue “on the table”, but added: “I don’t know if that will be resolved all at once.”
The foreign minister in February described the US tariffs on ethanol imports as aberrations, but also said he would not hold bilateral biofuels cooperation hostage to resolving the trade dispute.
Underpinning Brazil’s success with ethanol has been the mass-marketing since 2003 of hybrid-fuel cars. Eighty percent of the automobiles sold domestically are equipped with a hybrid engine that can consume either pure ethanol or a five-to-one mix of gasoline and ethanol.