Colombia’s government today announced that it would impose tariffs on ethyl alcohol (ethanol) imports from the United States for the next two years in the amount of 6.646 cents US per kilogram, an amount it says is equal to controversial US government subsidies of domestic ethanol producers.
According to Colombian authorities with the Ministry of Commerce, Industry & Tourism (MinCIT), their investigation demonstrated that of the total corn subsidies paid by the US government, 68.7% went towards the production of ethanol, amounting to $0.06646 USD per kilogram subsidy. Compared to the price of the last declared importation of the alcohol, that represents an ad valorem tariff of 13.2%.
The ministry stated that a causal relationship was found between the increase in these external purchases from the United states and negative performance of domestic producers because of these subsidies. The 15 month investigation was started at the urging of the trade group Fedebiocombustibles which represents domestic producers.
According to MinCIT, the process complied with the World Trade Organization Agreement on Subsidies, and was open to participation by the US government, exporters, and labor unions.