Brazil eyes ethanol as fast track to power
Brazil aims to double its production of ethanol in 10 years as the high price of oil and growing concerns over climate change spark a demand for biofuels.
from the June 6, 2007 edition
Page 2 of 3
Brazil's clout in trade talks
The European Union has invited Brazil, India, and the US to meet in Germany later this month to attempt to hash out a deal on World Trade Organisation (WTO) negotiations. Launched in 2001, the WTO's Doha round of talks aims to break down trade barriers that hinder the economic progress of poor countries.
As Brazil's agribusiness has boomed, it has won important trade cases against the US, including the scrapping of cotton subsidies, and has led a coalition of developing nations against US subsidies in general and European tariffs within the Doha round. "Their cohesiveness arguably may be the one thing that can turn this round of negotiations into something favorable for developing countries," says Sandra Polaski, a senior associate at the Carnegie Endowment for International Peace.
The country's rise as the world's "breadbasket" – a transformation made possible by an abundance of land and sun, decades of money pumped into research, and growing demand from developing countries such as India and China – has implications for the face of world agriculture. Today Brazil is the world's largest exporter of sugar, beef, poultry meat, coffee, orange juice, and tobacco.
In March, Lula signed a proposal with President Bush to promote the ethanol industry in the region.
The prospect for an international ethanol market is still uncertain, but if it does transpire Brazil would most certainly be a central global supplier – even as domestic demand goes up. Its ethanol production is far more efficient than that of the US, which makes ethanol with corn.
"They cannot ignore us anymore, and that has given us power. You can't make decisions without the world's largest producer," says Pedro de Camargo Neto, a former official in the agriculture ministry in Brazil. "The byproduct is it makes us a political leader. Ethanol will help that."
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