Lawmaker will not block Brazil appointment

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(Agencies)
Updated: 2009-07-31 05:29

WASHINGTON: A US lawmaker said Thursday he will no longer stand in the way of the Obama administration's appointment for ambassador to Brazil.

Republican Sen Chuck Grassley had been blocking a vote on the confirmation of Thomas Shannon after objecting to a comment Shannon had made about ethanol tariffs.

During a confirmation hearing, Shannon said that removing US tariffs on imported ethanol would be beneficial. Grassley is from the ethanol producing state of Iowa. He said he would allow the vote to proceed after the Obama administration wrote to him that it was not seeking to lift the tariff.

"I'm glad the administration made clear so quickly that the President supports maintaining the 54 cent-per gallon tariff on imported ethanol," Grassley said in a statement.

Brazil has complained for years that the tariff on Brazilian ethanol is unfair. It has threatened to challenge the tariffs at the World Trade Organization.

The nation is the No 2 producer of ethanol after the US, and is the planet's largest exporter. Experts say Brazil's ethanol industry will expand rapidly if tariffs on the alternative to gasoline are reduced or eliminated in the US and Europe.

Brazil's biofuel industry, born in the 1970s and concentrated in sugarcane-rich Sao Paulo state, has long been considered a global model, and its method of producing ethanol from sugarcane is cheaper and more efficient than rivals, including the US, which uses corn.

U.S.-made corn ethanol is more expensive than Brazil's sugarcane-based fuel: Oil must top $50 a barrel for it to be cheaper than gasoline. In contrast, Brazilian ethanol kingpins insist, their fuel is competitive as long as oil sells for more than $40 a barrel.

The country started manufacturing ethanol-only cars in the 1970s, and "flex fuel" cars introduced in 2004 - which run on ethanol, gasoline or any combination of the two - now make up nearly nine of every 10 cars sold.