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Ethanol cooperation to dominate Bush-Lula talks in Brazil
Platts
Rio de Janeiro
Petroleumworld.com 03 09 07
US President George W. Bush begins a five-country tour of Latin America
Thursday in Brazil, where US-Brazil cooperation on ethanol will dominate a
meeting between Bush and Brazilian President Luiz Inacio Lula da Silva.But officials and market analysts do not expect the talks to bring any
immediate change to the global ethanol trade.Bush will meet Lula early Friday, tour a Sao Paulo fuels terminal
controlled by Brazil's Petrobras, and sign a memorandum of understanding to
boost US-Brazilian cooperation on ethanol projects throughout the Americas,
Brazil's Foreign Ministry said Thursday.The US will not commit to any immediate reduction of import tariffs that
would allow a major boost in Brazilian ethanol shipments to the US, government
officials from both countries said this week. Brazil and the US together
produce more than 70% of the world's ethanol and are the top consumers of the
renewable fuel.Lula will push the US administration to accept a "gradual" phasing out of
the US tariff on ethanol imports, which is 54 cents/gallon, Brazilian
financial daily Valor Economico reported Thursday, citing government sources.
Lula said on Monday that the US tariff "doesn't make sense" if the US wants to
boost ethanol supplies, since Brazil's cheap sugarcane ethanol production
could help meet US demand.US officials, however, said earlier this week that a reduction in the
tariff, which is opposed by the US Farm Lobby and by the US Renewable Fuels
Association, is not on the negotiating table in the upcoming talks with
Brazil. Stephen Hadley, the US National Security Advisor, said this week that
talks with Brazil won't revolve around the US tariff issue, which he called a
"congressional matter," and that Brazil and the US have no intention of
setting up an ethanol cartel.On the contrary, talks will focus on prompting more ethanol developments
in other countries in the Western Hemisphere, and standardizing ethanol fuel
to make it a more fungible global commodity, Brazilian industry officials
said. Eudardo Pereira de Carvalho, the president of Brazil's largest sugarcane
growers association, Unica, said he met with Lula last week to prepare for
talks with Bush.--Josh Schneyer, newsdesk@platts.com
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PLATTS 08 03 07
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