MercoPress. South Atlantic News Agency

Bio-fuels top of US Treasury secretary agenda in Latam

Secretary Henry Paulson

United States Treasury Secretary Henry Paulson arrived in Guatemala Monday vowing to back efforts to expand the benefits of free trade, combat poverty and promote bio-fuels such as ethanol.

Paulson's appearance at the Inter-American Development Bank's annual general assembly comes on the heels of US President George W. 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 officials from the US delegation in Guatemala said that ethanol would be a major focus of the meetings. US 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 IDB meeting. While Brazil leads the world in ethanol exports, its sales to the US are restricted by a 54% per gallon US 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. Guatemala is the continent's second producer of sugar cane, behind Brazil and fifth in the world. 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 Tomás 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. Ethanol should create more jobs, boost alternative fuel production and cut dependency from imported hydrocarbons.