LATIN AMERICAN SUGARCANE-BASED ETHANOL--NEW PROPOSAL TO BOOST PRODUCTION

US President George W. Bush's visit to Brazil in early March brought forth a far-reaching proposal to boost sugarcane-based ethanol production in the continent, based on three pillars of support: the United States would contribute capital, Brazil would offer agricultural and industrial know-how, and other countries in the region would supply land and labor.

*The economic and energy benefits are clear, as this arrangement would stimulate the development of several Latin American countries while fostering the development of alternative ethanol suppliers for the United States.

*Besides the economic benefits, a number of geopolitical objectives are at play. The United States is interested in regaining prestige in the region, and Brazil seeks to fortify its influence in international forums.

*The project could be at risk, however, if individual interests break the fragile bonds of cooperation.

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