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With rising petroleum costs and a plethora of other influences causing international ethanol demand to grow at an unprecedented rate, discussion of trade liberalization has become an important point of debate for the ethanol production industry. Although there have been many studies on the results of the removal of trade barriers there has been little emphasis on the potential impact it would have on domestic industrial organization. This paper looks to analyze the possible effects of ethanol trade barrier removal between Brazil and the United States on U.S. industrial organization through evaluation of the removal's ,influence on incentives for consolidation in both fanner and non-fanner owned sectors of the U.S. ethanol production industry. Both the existing dead weight loss due to the accumulation of trade barrier costs and the potential for costs associated with increased market concentration are compared in the evaluation process as well as evaluation and incorporation of theory on trade flows and market structure resulting from trade tariff removal.


Economics | International and Area Studies