``If you're dependent on oil from overseas, you have a national security issue,'' Bush, 60, said in Sao Paulo, the first stop in his six-day visit to Latin America. ``Dependency on energy from somewhere else means you're dependent on the decisions from somewhere else.''
The biofuels partnership between the U.S. and Brazil, the two biggest global produces of ethanol, is also designed to help reduce pollution and improve local economies.
Brazil, the biggest Latin American economy, is the world's only major exporter of ethanol, and total ethanol shipments from Brazil may more than triple in eight years as production outpaces domestic demand, according to Brazil's agriculture minister. Brazil and the U.S. account for more than 70 percent of world production.
``Other countries want to share Brazil's experience,'' Lula said today, adding at a press conference later in the day that Brazil's biofuels program is a ``model'' for others.
Sugarcane
Farmers in Brazil have increased planting of sugarcane to meet surging demand for ethanol, the Brazilian government's statistics agency said yesterday.
Bush earlier today toured a facility of Petrobras Transporte SA, a unit of Petroleo Brasileiro, Brazil's state- controlled oil and natural gas company, in an industrial area of Sao Paolo. The company operates in South America and elsewhere around the world.
Developing energy alternatives offers political benefits to the U.S., Brazil and their allies, as a counterweight to Venezuela's oil reserves, the seventh largest in the world, and Chavez. About 10 percent of total U.S. crude oil imports, or 1.04 million barrels a day, in December came from Venezuela, according to Department of Energy data.
After the joint announcement, Chavez said the agreement was another tilt to benefit Americans. ``That's the Bush plan,'' he said at the presidential residence of Argentina's President Nestor Kirchner. ``They want to replace the production of food so they can sustain their American way of life.''
Development Issues
The Bush administration sees it differently. Creating energy from agriculture ``will increase the independence of these countries and improve their ability to address social and development issues,'' said U.S. Assistant Secretary of State Thomas Shannon on March 7 in Washington.
Brazil has been producing ethanol from sugarcane for about 30 years. The crop now replaces 40 percent of gasoline consumption. More than 70 percent of the new automobiles sold are ``flex-fuel'' vehicles, meaning they can run on gasoline or ethanol.
Raising a point of contention with the U.S., tariffs, Brazilian ethanol producers wanted Lula to press Bush to end the 54-cent-a-gallon levy on fuel shipped to the U.S.
``It's not going to happen,'' Bush said at a joint press conference with Lula today. The U.S. president said the law governing the tariffs ends in 2009 and that ``we'll look at it when the law ends.''
Tariff
White House National Security Adviser Stephen Hadley rejected that request on March 5. ``The tariff is not under negotiation, and we have no intention to propose altering the tariff,'' Hadley said. Removing the tariff would provoke strong opposition from farm-state members of Congress.
Lawmakers from U.S. farm states will closely scrutinize the Bush-Lula energy accord to make sure it doesn't hurt a U.S. ethanol industry that's ``very much in its infancy,'' said Senator John Thune, a Republican from South Dakota, which has 12 ethanol-producing facilities.
``I applaud the president for reaching out to Latin America and trying to work with countries that we can work with down there to counterbalance Chavez and some of the more detrimental influences in the region,'' Thune said in an interview in Washington. ``But the concern we have in ethanol country is we won't want to replace foreign oil with foreign ethanol.''
Thune said he and Charles Grassley, an Iowa Republican who's chairman of the Senate Finance Committee that oversees trade, ``will be prepared to resist efforts to undermine the ethanol industry in this country.''
Neglect
Bush, who is making his eighth trip to Latin America, also will confer with Latin leaders on trade and U.S. aid for health and education. He'll stop in Uruguay, Colombia, Guatemala and Mexico before returning to Washington March 14. Bush is using the trip to polish the U.S. image after criticism of inattention because of the wars in Iraq and Afghanistan.
Bush disputed the notion that the U.S. has neglected the region in the aftermath of the Sept. 11 terrorist attacks, saying that his trip ``is to remind people of the ties that bind us and of the importance of this region.''
``The characterization that our back has been turned is not borne out by the facts,'' Bush said at the press conference with Lula. ``I don't think America gets enough credit for helping to try and improve peoples' lives.''
The U.S. has doubled aid to the region to $1.6 billion annually under his administration, Bush said. Bush during the press conference praised Brazil's leadership of the United Nations peacekeepers in Haiti and said that the U.S. and Brazil plan to work jointly on development projects in Africa.
WTO Agreement
Bush and Lula expressed optimism that progress could be made in getting a new World Trade Organization agreement. The WTO's Doha Round of negotiations, named for the city in Qatar where they began in 2001, broke down last July as the U.S. resisted pledging further cuts in its farm subsidies unless India, the EU and Japan agreed to steep cuts in their farm duties.
``I'm convinced that we'll get there,'' Lula said. Bush's trade negotiating authority expires in June and some Democratic senators have said they will oppose its renewal. The power encourages other nations to negotiate with the U.S., knowing that Congress can't alter any agreement.
WTO chief Pascal Lamy has said he hopes for a ``breakthrough'' on a global trade deal in the first half of this year, paving the way for an agreement in about eight months.
Anticipation of Bush's visit prompted clashes between protesters and police in Sao Paulo yesterday. Activists from the environmental group Greenpeace said increased ethanol production might result in more clearing of the Amazon rain forest, the Associated Press reported.
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