By TIM ALEXANDER
Illinois Correspondent BLOOMINGTON, Ill. — Calling it a positive move towards the development of an international ethanol industry, officials with the Illinois Corn Growers Assoc. lauded the recent signing of an ethanol agreement between the United States and Brazil.
A “memorandum of understanding” was signed March 9 by U.S. Secretary of State Condoleeza Rice and Brazilian Foreign Minister Celso Amorim which will promote international efforts to standardize technical specifications for ethanol. The ICGA lauded the agreement’s potential for further establishing ethanol as an internationally traded commodity.
“This is a positive development if it raises the world’s awareness of the potential for ethanol fuels and the contribution it can make to our energy needs,” said Steve Ruh, ICGA president and a corn grower from Sugar Grove. “However, we will watch these developments closely to assure any future agreements are formulated in the context of fair trade.”
The two countries will engage in joint efforts to develop ethanol-related technologies and uses, according to the ICGA, and will join to encourage development of ethanol-producing industries in Central America and the Caribbean, as well as development of other biofuels. However, the ICGA reports, the memorandum did not directly address Brazilian concerns over U.S. tariffs.
President Bush has indicated the ethanol credit offset is not currently open to negotiation. “Congress put our current ethanol incentives in place to incubate and grow a new industry and revitalize rural America,” said Ruh in an ICGA news release. “Our credit offset prevents foreign ethanol industries access to those American taxpayer dollars, but does not block access to the U.S. ethanol market.”
An earlier agreement, the Caribbean Basin Economic Recovery Act, allows up to seven percent of annual U.S. ethanol consumption to be brought through Caribbean Basin Initiative countries duty-free. “As our production grows, so does their market access. To this date the limit has never been reached, so the issue is not overly relevant at this time,” said Ruh, adding that in 2006 the U.S. imported 433 million gallons of ethanol from Brazil, or about ten percent of the country’s overall production. “A growing worldwide ethanol industry is a very positive development because it decreases our dependence on petroleum,” Ruh explained.
“Overall energy demand is growing and shows no end, so we must seek out and develop all alternative sources of energy that make sense and can be developed competitively here and abroad.”
Ruh noted that the U.S. should continue to discuss the tariff issue and market access as part of an overall trade package. He also warned that Brazil is not considered a reliable supplier of ethanol since they make their ethanol from sugar, and when sugar prices are high the country cuts ethanol exports.
U.S. Senator Dick Lugar, who serves as chairman of the Senate Foreign Relations Committee, likewise praised the signing of the agreement. “Such an investment program could, in short order, create a thriving Western Hemisphere biofuels marketplace that would alleviate poverty, create jobs and increase income, improve energy security, strengthen nations’ independence, and protect the environment,” Lugar and Secretary General of the Organization of American States Jose Miguel Insulza wrote in a recent Miami Herald op-ed. “If implemented vigorously and expansively, this partnership would signal a transformational change in U.S. policy on Latin America, a true collaboration between north and south on an economic and security strategy that would benefit all.”
According to information on Lugar’s website, the two countries will begin work in the Caribbean and Central America through feasibility studies and technical assistance aimed at attracting private sector investment.
This farm news was published in the March 28, 2007 issue of Farm World, serving Indiana, Ohio, Illinois, Kentucky, Michigan and Tennessee. |
