Recently in the Brazilian city of Sao Paolo, a new partnership was agreed upon by President George W. Bush of the United States and President Luiz Inacio Lula da Silva of Brazil.

After years of a hesitant relationship, both countries have come together to promote the production and use of ethanol between themselves and the countries in between.

President Bush explained that the U.S. decision to move forward on this issue was due to the nation’s increased dependency on oil from overseas, and because it is a national security issue.

Aside from its oil dependency on the conflictive Middle East, the United States has felt the sting and barbs of the aspiring leader of left-wing Latin America, President Hugo Chavez of Venezuela. President Chavez has made obvious overtures to Fidel Castro of being the one who will raise Castro’s mantel when the old leader dies.

During President Bush’s trip throughout South America, Hugo Chavez tried to ratchet anti-American sentiment from near by Argentina. In February, Venezuela and Argentina had signed a series of economic pacts, one of them being the Bank of the South. Due to its rich oil revenues, Chavez can allow himself the largesse of “aiding” other fellow Latin American countries, with an eye to gain regional power. With the Brazilian-US agreement, part of that plan was thwarted.

The alliance formed by the United States and Brazil positions Brazil as regional leader and world power. It also repositions the United States in an area where it was loosing most of its clout and to re-route relations between North and South in the Hemisphere.

But like most trade agreements, there are certain dangers ahead. This alliance will have an environmental as well as a social impact. A Brazilian engineer, Expedito Parente, was quoted as saying in a Brazilian newspaper, “We have 80 million hectares in the Amazon that are going to be converted into the Saudi Arabia of biodiesel.”

If that is the case, we can assume the destruction of the Amazon and the ruin of millions of small farmers. This brings back visions of NAFTA 10 years ago when the dumping of subsidized corn crops on small farmers in Mexico caused their demise and exodus to the North.

Under-Secretary of State Nicholas Burns was quoted by a Brazilian newspaper, O Estado de S. Paulo, “We are very dependent on oil. So we have to develop alternative fuels, we have to decrease our gasoline consumption. We can produce corn ethanol because we have large cornfields. [Brazil] produce ethanol from sugarcane. We are both world leaders. We control more than 70 percent of the world market.”

The idea of this agreement is to also stimulate ethanol production in countries that have large sugarcane plantations, like Central America and the Caribbean.

The the organization that seeks “to diversify its relations with Latin America” is the Inter-American Ethanol Commission, headed by former Gov. Jeb Bush. As the nexus between major business leaders in both countries, the commission seeks, “to develop the market for bio fuels made from sugarcane and corn.” The large profits of bio fuels has whetted the appetites of major companies such as Syngenta, Monsanto, DuPont, Dow, Bayer, to name a few and has drawn them in as major investors.

But not everyone is in agreement. Sen. John Thune, R-S.D., called the teaming up with Brazil “mind boggling.” On March 3, in an interview to the Associated Press, he said, “The goal of ethanol is reducing the nation’s dependence on foreign oil. It makes no sense to replace one source of foreign energy with another.”

In Indiana, we have the most to gain and loose. The initiatives set in place by Gov. Mitch Daniels have placed Indiana in the forefront of ethanol production. The state has invested heavily in research and development at the University of Purdue. The positive economic impact will create jobs and wealth in small towns. But there are challenges. Even though corn producers are happy, the ethanol gold rush is making the pork industry nervous as it sees a rise in the cost of feed for its hogs. And if corn is solely grown for ethanol, the consumer will see higher prices at the supermarket for imported corn and byproducts of livestock. The state sees this as a catalyst to the development of other alternative fuels, not the total answer to energy needs.

The ethanol alternative does not alter the fact that our consumption of energy keeps growing unabated. We have a real energy challenge. Chris Hurt from the University of Purdue points out, “For policymakers, it is most important to realize that there are many positive advantages of using corn for bio fuel…but there are unintended negative consequences in other sectors.”

Lillian Rose is a retired international consultant. She is active as vice president of the Hispanic Connection and is pastoral associate with the Hispanic Ministry of the New Albany Deanery. You can write to her at Lillian@HispanicConnectionSI.org.