Corn growers and ethanol producers in Iowa are watching developments carefully as President Bush leaves today on a trip to five Latin American countries. Bush is due to sign a deal with the president of Brazil to cooperate on ethanol, though details of the accord aren’t yet clear.
Iowa Senator Tom Harkin, a Democrat, says he and other Congressional leaders met with Bush at the White House last week. Harkin says "There were about ten of us. Senator (Chuck) Grassley and I were two there and Senator Grassley made it clear to the president, and we all supported that, that we would not look favorably upon him going to Brazil and opening up the doors to Brazil ethanol coming into the United States."
An amount of ethanol, up to seven-percent of U.S. domestic production, can come into the U.S. from Latin America duty-free, but there’s a 54-cent per gallon duty to be paid on all other ethanol imported from the rest of the world. Harkin says that duty needs to remain in place.
Harkin says "I don’t think we ought to relax the tariff on ethanol or use U.S. funds to support ethanol shipments into the U.S. It makes sense. I think what the president told us, I hope that’s what he’s doing, is he’s going to be urging all of Latin America to move off their dependence on oil and to produce more ethanol on their own. That’s fine with me." He says if the U.S. helps those nations produce more of their own ethanol, "the better off we’ll all be."
While Iowa is this nation’s top ethanol producer, Brazil is the world’s number-one ethanol producer. As much as 70-percent of the cars sold in Brazil are flexible fuel vehicles — which run on gas, ethanol or any combination.