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Subsidies to Corn and Ethanol: Is Ethanol an Agricultural Product?

The European Union, Australia, Argentina and Brazil have joined Canada in a complaint against the United States over allegedly illegal  subsidies to American corn growers. Although corn is clearly an agricultural product, it is interesting to note the following comment by Clodoaldo Hugueney, Brazilian ambassador to the WTO: "This is not just about corn. Brazil is the world's largest ethanol exporter, so this is an important issue for us." I don't know if Brazil is going to put the ethanol issue on the table to demonstrate for example serious prejudice. Although it could do so under the SCM, the panel would have to answer completely new questions in order to know whether or not  it is dealing with an agricultural product. This would be especially the case if the complaints invoke simultaneously the AoA and the SCM. The reason is that the biofuels industry did not exist when the current WTO rules were written. Biofuels are not subject to a standard classification system and production from agricultural feedstocks leaves much uncertainty about how they should be regulated.

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