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Bush, Ethanol and the South American Divide
[Analysis] U.S. president seeks to use oil independence to reassert leadership in region
Alan Mota (al0021)     Print Article 
Published 2007-02-28 11:36 (KST)   
The atmosphere for the upcoming South American tour of U.S. President George W. Bush and his entourage was summed up recently by -- who else -- Hugo Chavez. During a visit to Argentina, Chavez said, "I am going to send this vial [of sulfur] to Lula for when the little gentleman comes so that he can place it out there in Brasilia" -- a clear reference to his earlier declaration of Bush as "the Devil."

After a long absence, the American president finally took the courage to visit the continent that has been standing out as one of the most hostile areas to the US in the world. The Ecuadorian and Bolivian elections brought Chavez-friendly presidents Evo Morales (in Bolivia) and Rafael Correa (in Ecuador) to office eager to put their socialist-prone governmental programs in action, to the despair of American politicians and companies. The recent growing closeness between Argentine President Nestor Kirchner and Chavez and the unchanging neutrality of Brazil, whose president refuses to take sides and tries to bridge the gap between the two completely different poles of a neoliberal-conservative America and a socialist-leftist South America -- also highlight the strains in North-South relations. The only countries that the U.S. can really count on in its foreign policy would be Chile -- although the government is not that close to the US, and its people are not exactly sympathetic to Americans in general -- and its eternal ally, Colombia, which can hardly be considered an example of stability in the region.

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The main reason for Bush's visit to South America -- especially Brazil, which seems to be the main target of his trip -- is to further discussions on ethanol development and cooperation, to reinforce America's "energy independence" profile. That can, by itself, be considered a provocation to Chavez, since Venezuela is the fourth biggest oil supplier to the U.S. But with additional visits to Uruguay and Colombia, the former having developed bilateral agreements with the US despite protest from other South American countries, and the latter being a traditional ally, it's not a stretch to imagine that the true reason behind the American visit is to reinforce its political presence in the region and reassure its wavering allies that it's safe and profitable to stick with the U.S.

Another reason, as commented on in the Brazilian media, would be to push Brazil into aligning with the U.S. through its ethanol commitments, opening a door for a further warming of relations that would ultimately drive the South American power off its neutrality and bring it to the American side once and for all. That has worried Brazilian president Luis Inacio "Lula" da Silva, who was quick to state that these commitments won't affect the Brazilian international policy in anything.

Greg Manuel, one of U.S. Secretary of State Condolezza Rice's advisors for international energy issues, is apparently the man behind the whole plan. And he doesn't mince words in advertising the wonders of ethanol. "It's a great opportunity. The western hemisphere spends 7.2 percent of its GDP importing oil and some countries are very vulnerable, such as the Dominican republic, which spends almost 20 percent of everything it produces importing oil."

But Manuel doesn't mention the possible disadvantages of a full-blown switch to ethanol, such as the seasonality of the production, its vulnerability to natural disasters or rapid climate change, and the dangers of abandoning food production to focus only on ethanol. And when it comes to one of Brazil's most recurring requests -- the opening of the American ethanol market, where Brazilian ethanol is charged a tax of US$0.54 per gallon -- the American friendliness wanes. "The taxes are non-negotiable," Manuel states. "Many countries with which we talk about this global market see access to the American market as an additional advantage, not an essential condition; even without access to the American market, there are plenty of opportunities."

Manuel forgot to mention that the American market is, by far, the biggest market in the world for any fuel and that the U.S. alone is not capable of providing to itself, even though it produces, along with Brazil, 72 percent of all the ethanol in the world. And that American ethanol, made of corn, is more expensive and less productive, while Brazilian ethanol is cheaper and much more efficient. The only reason American ethanol is heavily produced is because it's heavily subsidized. This is the reason Brazil have been signing contracts with many rich countries like Japan that are looking to mix ethanol with their gasoline in order to make their fuels less polluting, while the highly marketed E85 ethanol from the U.S. has gone practically nowhere outside American territory.

But depending on certain people close to the Bush administration, this visit will indeed be the beginning of a long lasting and very close friendship. Manuel, along with Brian Dean, an ex-Alca lobbyist who now presides over the Inter-American Ethanol Commission (CIE) -- the institution responsible for stimulating ethanol-friendly policies and investments, which has George Bush's brother and ex-governor of Florida Jeb Bush as one of its directors -- seem to be coordinating profit and politics to make ethanol not only next best thing on fuel, but also the United States' ticket back to South American leadership. And this visit is probably one of the most important steps toward both economic and political objectives.

While it's legitimate for the U.S. to seek to free itself from oil dependence, South America has to watch out for any attempt to use this as an excuse to increase the divide in the region. Just as the U.S. long ignored the region before Chavez's rise and the ethanol possibility, they can throw it back to oblivion as soon as the buzz on ethanol passes and Chavez cuts down on his rantings. And both allies and enemies of the U.S. on South America, whoever they are, will be left with nothing but a insurmountable political gap between them, while the Americans look somewhere else in the world for more convenient allies.
©2007 OhmyNews
Other articles by reporter Alan Mota

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