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Brazil looks to WTO talks to boost biofuel exports
GENEVA
Petroleumworld.com, July 24, 2008Brazil said Wednesday it hoped to gain better market access for exports of ethanol to the United States and Europe as part of global trade talks here but is facing resistance from Washington.
"Ethanol should be part of a deal this week," said Carlos Conzendey, head of the economic department at the Brazilian Foreign Ministry.
"For the moment, the United States has said 'no'," he told AFP.
Brazil is one of the world's leading ethanol producers, with the bulk of its production going to its domestic market as fuel or additive for gasoline.
The country wants the World Trade Organization and its members to classify ethanol as an environmental product rather than an agricultural product, which would give it greater access to export markets.
The WTO has convened a meeting here of 30 leading trade negotiators this week with the aim of mapping out a deal to conclude the long-delayed Doha round of global trade talks.
The Doha round began seven years ago with the aim of helping poor countries, but it has been delayed by disputes between developed and developing nations over subsidies and tariffs for farm and industrial products.
Brazil is a powerful representative of emerging countries in the negotiations.
"Brazil produces 15 billion litres of ethanol per year, and only 3-5 billion are exported," Conzdendey said.
"The export potential is immense," added another Brazilian diplomat who did not wish to be named.
Earlier this year, Brazil's agriculture ministry forecast that ethanol production was expected to rise by 15 and 19 percent from 2007, an increase of up to 27,400 million litres.
Of that, ethanol exports are forecast to reach 4.2 billion litres, up from the current 3.4 billion litres a year.
Brazil's bid comes at a time when the tide of public opinion and policy is turning against biofuels.
Initially hailed as a weapon in the fight against global warming, they are now cited by United Nations agencies, the World Bank and non-government organisations as one of the causes of soaring global food prices.
The Organisation for Economic Cooperation and Development (OECD) said earlier this month that it favoured a moratorium on expanding biofuel production, following the release of a report critical of vegetable-based fuels.
The OECD found that in most countries the biofuel sector was heavily subsidised, through budgetary support, requirements that biofuels represent a certain share of the market for transport fuels and protectionist trade restrictions.
The US is the world leader in ethanol output, accounting for 48 percent of worldwide production last year, ahead of Brazil at 31 percent, according to the OECD.
The EU is responsible for about 60 percent of global biodiesel production, based on oils such as rapeseed and canola.
Story by Aude Marcovitch by AFP
AFP 231712 GMT 07 08Copyright© 2008 respective author or news agency. All rights reserved.
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