Ethanol Tariff Dispute

US Lawmakers Want Penalties Reduced

Todd Neeley
By  Todd Neeley , DTN Staff Reporter
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Lawmakers from ethanol producing states want the U.S. trade ambassador to challenge EU ethanol tariffs. (DTN file photo by Chris Clayton)

OMAHA (DTN) -- Congressmen are asking U.S. Trade Ambassador Michael Froman to push Europe to reduce tariffs on energy produced in the United States, including ethanol, as part of negotiations on the Transatlantic Trade and Investment Partnership.

"The U.S. ethanol industry has been unfairly targeted by the EU for increased duties which have subsequently eliminated U.S. share in the European market," the lawmakers wrote in a letter to Froman. "These duties of $83.20 per metric ton were imposed following an anti-dumping action, which continues to be challenged by the industry at the international level, and only serve as a punitive measure on a U.S. energy source."

The bipartisan group of lawmakers who drafted the letter comes from states with large ethanol industries. They included House Agriculture Committee Ranking Member Collin Peterson, D-Minn., as well as Representatives Rod Blum, R-Iowa; Rodney Davis, R-Ill.; Steve King, R-Iowa; Tom Emmer, R-Minn.; Tim Walz, D-Minn.; David Young, R-Iowa; Brad Ashford, D- Neb.; and Dave Loebsack, D-Iowa. The group said the tariff on U.S. ethanol exports into the European Union is making it difficult for Europe to source enough volume for its own market.

"As T-TIP negotiations progress toward completion, we are confident you can leverage access to all domestic energy sources, such as U.S. natural gas, crude and ethanol in order to achieve a favorable outcome for these industries and the reduction or elimination of trade obstacles to market access in Europe," the lawmakers said in the letter to Froman.

"At a time when farmers are struggling to cope with a volatile price of corn, having additional markets and demands for U.S.-produced ethanol would be a welcome outlet for our corn commodity yields. Additionally, increasing worldwide demand for ethanol has created a significant number of good paying jobs."

The European Commission began an ethanol antidumping investigation in October 2011 in response to a complaint lodged by European ethanol trade group ePURE.

In May 2013, the Renewable Fuels Association and Growth Energy filed a complaint with the General Court in Luxembourg, challenging the commission's decision to impose a 9.6% antidumping duty on all ethanol imported from the United States. The challenge is still being litigated.

Despite repeated requests, the U.S. Trade Representative's Office has so far declined to file a complaint with the World Trade Organization challenging the legality of the duties.

In a statement Tuesday, RFA President and Chief Executive Officer Bob Dinneen said it was important for U.S. ethanol to have a place at the table in trade negotiations with the European Union.

"We wish to thank the nine lawmakers for informing the ambassador that 'the U.S. ethanol industry has been unfairly targeted by the EU for increased duties,'" he said. "The duties imposed were unjustified and blatantly protectionist.

"Sadly, the real losers in this are European consumers that have to pay more for motor fuel because the lowest-cost liquid fuel in the world -- U.S. ethanol -- has been targeted by their protectionist policy. Since Europe cannot produce sufficient domestic ethanol supply and must import the fuel from foreign sources, including the U.S., it is time to see the duties removed."

Read the letter here, http://tinyurl.com/…

Todd Neeley can be reached at todd.neeley@dtn.com

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Todd Neeley