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AOPA acts to stave off tariff-induced avgas price increaseAOPA acts to stave off tariff-induced avgas price increase

AOPA acts to stave off tariff-induced avgas price increase

AOPA is taking action to stop an increase in the price of aviation gasoline brought about by an international dispute over rice. What? What do rice and avgas have in common? Surprisingly, there is a link, and that means AOPA's government and technical affairs staff is staying on top of international trade issues as well as more traditional GA concerns.

The U.S. government contends that the European Union (EU) has raised its tariffs (or taxes) on U.S. rice more than allowed by world trade agreements. That hurts U.S. farmers, so the United States is entitled to impose similar tariffs on EU products to penalize European producers, including a new 45-percent tariff on tetraethyl lead (TEL), the octane-enhancing additive in 100LL avgas.

AOPA is opposing the new tariff because it would have an adverse impact on U.S. general aviation by increasing the cost of avgas, while having no impact on European Union nations.

"All the TEL in the world is produced only in the United Kingdom," said Luis Gutierrez, AOPA director of regulatory and certification policy. "All the TEL used within the United States to refine avgas is imported."

That means that U.S. refineries would have to pay more for their only source of TEL, and that means they would have to raise the price of avgas. But because England is the only source of TEL, the Europeans wouldn't be hurt at all by the tariff. They'd still sell the same amount.

So AOPA has petitioned the U.S. Trade Representative to remove TEL from the proposed list of European products scheduled for tariff increases.

"The proposed policy would have a significant adverse financial impact on general aviation aircraft owners," AOPA told the U.S. Trade Representative. "An increase in the tariff on TEL would be of no penalty to the EU nations but would present a significant burden to the U.S. general aviation industry."

September 30, 2004

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