President Urged to Suspend Ethanol Import Tariff

US - The American Meat Institute, joined by more than 30 other organizations concerned about skyrocketing corn prices, sent a letter today urging President Bush to exercise his emergency authority and immediately suspend the duties and quotas on imported ethanol used as a motor fuel additive.
calendar icon 3 July 2008
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The letter notes that the suspension of the tariff will help producers, processors and consumers who are being directly and immediately impacted by rising feed and food prices due to the government mandate to convert nearly 30 percent of the domestic corn crop into fuel. The President can immediately suspend the tariff using the authorities provided by the Constitution, the National Emergencies Act, Tariff Act of 1930, Trade Expansion Act of 1962 and the International Emergency Economic Powers Act.

“The suspension of the 54 cents per gallon duty on ethanol will benefit Americans by introducing market competition for a product that is mandated and foster downward pressure for domestic ethanol and its feedstock. Domestic dairy, livestock and poultry farmers, food and beverage manufacturers, employees in these industries and American food consumers will benefit from this action,” the letter notes.

AMI President and CEO J. Patrick Boyle said that while there are many factors driving up corn prices, the combined impact of an ethanol mandate, subsidies, and a trade-distorting ethanol tariff has concentrated the economic consequences on American livestock and poultry producers and consumers. “The immediate suspension of this duty could lower the economic pressure on livestock and poultry producers as well as on fuel consumers,” Boyle said.

The letter was sent the day after Indiana Senator Richard Lugar (R-IN) told President Bush that “to demonstrate leadership, the United States should lift the tariff on Brazilian ethanol that now shelters the U.S. industry” and several days after the USDA crop report suggested a drop in corn production this year due to a wet spring and the historic flooding in the Midwest. The letter explains that suspending the duties and tariff will reintroduce market competition into the equation and “alleviate a portion of the unnecessary feed and food price inflationary pressures that are adversely impacting our economic well-being. The suspension will also help American consumers struggling with their grocery bill.”

“In the short term, we’re asking the President for immediate relief from the tariff,” Boyle noted. “But in the long term, we need to reopen the decision to burn our food as fuel,” he added.

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