Tuesday, January 03, 2012

Brazil and ethanol subsidy

I heard on NPR this morning the argument that the end of the ethanol subsidy in the U.S. will not affect Brazil because Brazilian domestic demand is outpacing supply to the point that Brazil is actually already importing from the U.S. Indeed, that is the case, by about 25 percent, to the point that it will take two years for the imbalance to change. I take it that all of Brazil's complaints--which included going to the WTO--were based on the past when this wasn't true.


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