U.S. official touts biofuel in Guatemala

U.S. official touts biofuel in Guatemala

	Published : Mon, 19 Mar 2007 22:43 By : Agencies Print this Story

GUATEMALA CITY (AP) - U.S. Treasury Secretary Henry Paulson arrived in Guatemala on Monday, vowing to back efforts to expand the benefits of free trade for more of the region's poor.

Paulson's appearance at the Inter-American Development Bank's annual meeting comes on the heels of President Bush's swing through Latin America, when he cemented an ethanol-promotion agreement with Brazil that officials said would stimulate development in tropical nations of the Americas.

In a statement issued before he began his trip, Paulson said he hoped 'to work with leaders in the region to ensure that more people share in the benefits created by economic growth and trade opportunities.'

He said he would also discuss debt relief for the hemisphere's most impoverished countries.

But other officials here also said that ethanol would be a major focus of the meetings.

U.S. and other foreign investors have expressed interest in using Guatemala as a base for exporting ethanol to North America, Guatemalan Finance Minister Hugo Eduardo Beteta said on the sidelines of the meeting, which ends Tuesday.

While Brazil leads the world in ethanol exports, its exports to the U.S. are restricted by a 54-cent-per-gallon U.S. tariff on its sugar-based ethanol. As a result, many in the ethanol industry have been taking a look at Central America and the Caribbean, which also are important sugar cane producing regions. Sugar accounts for nearly a quarter of Guatemala's agricultural production.

Caribbean and Central American countries also enjoy preferential trade quotas and a limited amount of tariff-free trade in ethanol with the United States under the Central American Free Trade Agreement and the Caribbean Basin Initiative.

Guatemala has been preparing for the possibility of becoming an export base, upgrading its largest port, Santo Tomas de Castillo, on the Caribbean coast, and carrying out certification procedures, Beteta said.

A top Brazilian sugar and ethanol group, Unialco, recently announced it was considering a joint venture in an ethanol dehydration plant to be based in Guatemala.

Bush and Brazil's left-leaning President Luiz Inacio Lula da Silva touted their ethanol accord as a way to boost alternative fuels production and use across the Americas, create more jobs and ease oil dependence. In Brazil, nearly eight in 10 new cars already run on fuel made from sugar cane.

'Latin America and the Caribbean have the potential to be the Persian Gulf of biofuels without the instability, without some of the problems there,' said David Rothkopf, an international business consultant whose firm Garten Rothkophf LLC conducted a study on the biofuel industry for the Inter-American Development Bank.