JohnWood
13th January 2012, 01:16 AM
The End of the U.S. Ethanol Tariff
In this new report from The Globalist Research Center, John Mathews explores the ramifications of the U.S. Congress refusing to extend the 54-cents-per-gallon tariff levied against imported ethanol. By opening up the American market to imports as of January 1, 2012, the geopolitical impacts of this decision promise to be profound, he argues.
http://www.theglobalist.com/storyid.aspx?StoryId=9505
he U.S. Congress surprisingly refused to extend the 54-cents-per-gallon tariff levied against imported ethanol, which has opened the U.S. market to imports. At the same time, Congress refused to extend the complementary production tax credit of 46 cents per gallon, which had been provided to U.S. producers for three decades. These changes complement the tariff elimination enacted by Brazil in 2010. Suddenly, there is a hemispheric free market in ethanol.
The commentary on this momentous decision has so far focused on the impact on Iowa corn farmers and the big commodity traders like Archer Daniels Midland (ADM). It is undeniable that there will be some rethinking in the U.S. Midwest of planting strategies, now that corn no longer attracts the subsidies that were running at around $6 billion for the past year. The diversion of corn from foodstuffs markets to ethanol production, which had been so widely condemned, may now be moderated — to the relief of food consumers everywhere.
you see globalisation (please notice the spelling with the letter S) is not really dead. The reason of course is always political..
The geopolitical impacts of this decision promise to be profound. First, it should create a strong mutual alliance between the United States and Brazil to co-develop their ethanol exports and argue for free markets for ethanol around the world. US attempts to drive a wedge between Brazil and China..
Second, it will add credibility to U.S. calls for freer markets for “clean fuels” around the world. It was notable that while the U.S. import tariff was still in force, a group of eight American government agencies issued a document calling for such free markets — oblivious, perhaps, of the fact that the United States was the worst perpetrator of such market distortion. After all, just over a year ago the Brazilian government was fulminating over these U.S. tariffs and threatening an all-out trade war if they were not removed.
In this new report from The Globalist Research Center, John Mathews explores the ramifications of the U.S. Congress refusing to extend the 54-cents-per-gallon tariff levied against imported ethanol. By opening up the American market to imports as of January 1, 2012, the geopolitical impacts of this decision promise to be profound, he argues.
http://www.theglobalist.com/storyid.aspx?StoryId=9505
he U.S. Congress surprisingly refused to extend the 54-cents-per-gallon tariff levied against imported ethanol, which has opened the U.S. market to imports. At the same time, Congress refused to extend the complementary production tax credit of 46 cents per gallon, which had been provided to U.S. producers for three decades. These changes complement the tariff elimination enacted by Brazil in 2010. Suddenly, there is a hemispheric free market in ethanol.
The commentary on this momentous decision has so far focused on the impact on Iowa corn farmers and the big commodity traders like Archer Daniels Midland (ADM). It is undeniable that there will be some rethinking in the U.S. Midwest of planting strategies, now that corn no longer attracts the subsidies that were running at around $6 billion for the past year. The diversion of corn from foodstuffs markets to ethanol production, which had been so widely condemned, may now be moderated — to the relief of food consumers everywhere.
you see globalisation (please notice the spelling with the letter S) is not really dead. The reason of course is always political..
The geopolitical impacts of this decision promise to be profound. First, it should create a strong mutual alliance between the United States and Brazil to co-develop their ethanol exports and argue for free markets for ethanol around the world. US attempts to drive a wedge between Brazil and China..
Second, it will add credibility to U.S. calls for freer markets for “clean fuels” around the world. It was notable that while the U.S. import tariff was still in force, a group of eight American government agencies issued a document calling for such free markets — oblivious, perhaps, of the fact that the United States was the worst perpetrator of such market distortion. After all, just over a year ago the Brazilian government was fulminating over these U.S. tariffs and threatening an all-out trade war if they were not removed.