“I think it makes sense to -- when there's a time of shortage of a product that's needed, so that the consumers can have a reasonable price, it seems to me to make sense to address those shortages, and dropping a tariff will enable the foreign export of ethanol into our markets, which will particularly help on our coasts. And yeah, I've talked to Congress about that.”
-President Bush, May 2006
He obviously shifted course sometime between then and now, because he told Lula da Silva the exact opposite thing last week in Sao Paolo.
Then this:
From an article from truthabouttrade.org, (which is, according to their website, "a nonprofit advocacy group led by American farmers – narrowly focused, issue specific - as we support free trade and agricultural biotechnology.")
"...Texas oil man Ron White shows off the site for his next big investment: a planned $20 million ethanol processing plant. His company, EthylChem Ltd., is just one of a rush of new Caribbean enterprises trying to serve the suddenly booming U.S. ethanol market...These biofuel entrepreneurs won't actually make ethanol from Caribbean sugar cane, even though sugar makes the best base for the fuel. Instead they'll just import it from ethanol powerhouse Brazil, and process it here. Then they'll try to cash in on the islands' sweet tariff status: an exemption from a 54-cents-a-gallon U.S. tariff on ethanol processed anywhere else. "Avoiding the tariff -- that's the economics of our business," says Mr. White."
I've said before and I'll say again, I am no economist (having somehow managed to get through high school and college without ever taking an econ class of any kind) so I encourage those with more knowledge to come along and inform a discussion of these things; but it seems to me that it is doublespeak to regularly sing the praises of free trade and then in this one instance be internationally protectionist, while allowing plenty of wiggle room to circumvent the tariff for the (nominally) American corporate interests. It seems to me a set-up of Brazil; get the Central Americans hooked on Brazilian ethanol, then cut our support for the Brazilians once we get a functional ethanol industry of our own, then undercut Brazil on pricing and turn around and sell them American ethanol cheaper than they can afford to produce their own from sugar. Use the tariff to promote American production. But this completely flies in the face of free trade policy, doesn't it?
Let the enlightening commence, please.
