Obama says no quick end to ethanol dispute

By Alan Beattie in Washington
Published: March 15 2009 02:37

Barack Obama on Saturday said there would be no quick resolution to a dispute with Brazil over restricting ethanol imports to the US, following his first meeting with President Luiz Inacio Lula da Silva.
The Brazilian president, in his first visit to Washington since Mr Obama took office, said it was wrong for the US continued to levy import tariffs on Brazilian sugarcane ethanol, which is more environmentally friendly than the maize ethanol produced in the US.

“I also can’t understand [why] while the world is concerned with climate change and with carbon emissions … clean fuel also gets tariffs,” Mr da Silva said.
The issue has become a bone of contention between the two countries, with Brazil threatening litigation at the World Trade Organisation over the US’s 54 cent per gallon import tariff.
Brazil has also used the issue to counter US demands for it to cut to zero its own tariffs on so-called “environmental goods” such as renewable energy technology, accusing Washington of hypocrisy.
Mr Obama paid tribute to Brazil’s leadership in biofuel production and said that his administration would continue to work with Brazil on the issue. But he added: “It’s not going to change overnight.”
Mr Obama also played down the chances of a swift resolution to the beleaguered so-called “Doha round” of trade talks, which has stalled on disputes over agricultural tariffs and subsidies and industrial goods protection.
“It may be difficult for us to finalize a whole host of trade deals in the midst of an economic crisis like this one, although we have committed to sitting down with our Brazilian counterparts to find ways that we can start closing the gap on the Doha Round and other potential trade agreements,” Mr Obama said.
“I’m optimistic that we’ll be able to make progress,” he said. “It may not happen immediately.”
Brazil’s highly competitive farmers have pushed for a rapid conclusion to the round and for cuts in US farm subsidies and European farm tariffs to expand their export markets. But resistance from the US and reluctance from developing countries such as India to cut protection for farmers has led to repeated breakdowns in negotiations.
Mr da Silva agreed on Saturday that the economic crisis made it harder to reach a deal in Doha.
Copyright The Financial Times Limited 2009