Pan-American free-trade in ethanol

Brazil should be in a strong potion to argue for pan-American free-trade in ethanol when president Lula da Silva meets George W Bush in March.

Laurens Rademakers says in Biopact

 Making ethanol and biodiesel a globally traded alternative to petroleum is in everyone’s interest. And its pretty hard to disagree.

Biopact has a pretty good go at what an ethanol cooperation agreement between Brazil and the US might look like and says the US is to continue to import biofuels from Brazil.

Meanwhile, There’s an interesting interpretation of Brazil’s fuels policy in Law at the end of the day. Here Larry Cata Backer says

Brazil is hedging in several ways. It continues to maximize its ability to exploit its own petroleum reserves. This serves it well as it seeks to protect itself from its brothers in Venezuela and Bolivia. It enhances economic stability and gives Brazil more leverage in its negotiations with other states.

Brazil’s flexible fuel approach gives it a strong position in negotiating with the US (its ethanol market isn’t going to die if the US decides to stop importing any ethanol). What should happen is that the US should lower its immport tariff. The US needs to keep Brazil sweet if she is going to help as an instrument of US foreign policy against countries like Venezuela.

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