Biofuels between International Markets, Policies and the Wto

Much has been written on the alleged negative impact of rapidly growing biofuel production on agricultural markets and prices. Within a longer-term perspective one critical aspect in this respect is the limited development of biofuel international trade observed thus far. Due mainly to the combination of strong support for domestic production and trade barriers in most of the key-countries, this limited openness in trade not only reduces the growth potentials of the biofuel sector but may also aggravate its negative fallout on the agricultural markets. In this article we analyse the international biofuel trade starting from its implications for the associated markets (of agricultural and energy products) and focusing on the role of current promotion policies, the possible policy alternatives and the contribution that the Wto can make (as well as the problems it may come up against) to improve international biofuel trade.