KAI RYSSDAL: President Bush hasn’t even landed in Brazil yet. But police there have already had to break out the tear gas to put down protests. About 6,000 people marched against the administration’s proposal for an energy deal with the Brazilian government. Brazil’s the leading producer of sugar-based ethanol.
The president will be on the ground for just a day. Enough time for one big public event. It’s a tour of a biofuel plant in Sao Paolo. Biofuel as in ethanol.Also he’ll attend meeting and a press conference with President Lula da Silva.Riordan Roett teaches Latin American policy at Johns Hopkins University. Professor Roett, welcome to the program.
ROETT: Thank you.
RYSSDAL: What’s the main trade issue on the table here? Is it ethanol?
ROETT: It is ethanol, but it’s a whole series of issues that the Brazilians, as spokesperson for the group of 20 — which are more or less 20 countries that come together on trade, mostly developing countries — have really slowed down the World Trade Organization Doha Round. They’ve also nixed the free-trade air in America. So I think the president is probably going to want to talk to President Lula in Sao Paolo about trade policy. Second, ethanol is an important long-range issue, but of course the United States places a tariff on Brazilian ethanol exports to the United States. So there isn’t much room unless the president can convince Congress to drop that tariff, which is not going to happen any time soon. And finally, not publicly but privately, I would think President Bush will be speaking with President Lula about President Chavez of Venezuela.
RYSSDAL: The president, during his State of the Union speech, made a very big deal about increasing the use of renewable fuels in this country in the next decade or so. We don’t have the production to do it, and yet we have maintained our tariffs on people who do have that production who can send us cheap ethanol.
ROETT: Unfortunately, the United States government, in the hands of either political party, doesn’t necessarily follow rational policies for the good of the country. This is one of those. The ethanol issue, of course, is very . . . very stark. The tariff protects corn producers, and the United States produces more inefficient ethanol from corn, but they happen to be in important states.
RYSSDAL: So there are very serious political ramifications here for the 2008 presidential election in this country.
ROETT: Ah, very serious. Already, one senior senator, Senator Grassley
, has sent a very pointed letter to the White House saying “Don’t think of touching those tariffs.”
RYSSDAL: Let me make sure I understand this. The Bush Administration, and the government in general, want there to be more ethanol used. Yet they won’t allow the import of cheaper ethanol, which could get people buying ethanol more cheaply.
ROETT: Exactly. It is double-talk, and unfortunately, most people don’t really understand the debate. There is some ethanol coming in, because given prices of other products, at times the Brazilians are willing to pay the tariff. But clearly, if there are other opportunities for Brazil, in let’s say Asia or in other countries in Latin America, most of whom are energy-poor . . . I think clearly if I were the president of Brazil, I would thank President Bush for his interest, but tell my people to go find new markets without tariffs.
RYSSDAL: What I hear you saying, sir, is that this visit down to Brazil is mostly show and no substance.
ROETT: It’s very symbolic. This is the end of the administration. The president is a lame duck, as all presidents are in their last year and a half or two years. And overall, there’s no grand strategy, no matter what the White House says, about what we can do given our double deficits in the United States to provide greater amounts of financial aid for the countries in the region.
RYSSDAL: Let me get, very quickly, back to something you mentioned at the beginning. The World Trade Organization, the round of Doha talks, which has stumbled on the issue of these subsidies — rich countries giving subsidies to their producers. Isn’t there any chance that the United States will back off on subsidies just to get the Doha Round going again?
ROETT: One would like to think so, but . . . of course, it is not just the United States, it is also the European Union. And they, in a sense, are dug in even deeper in protecting subsidies for their farmers. And there’s also something on the other side of the table: the intellectual property rights, which the U.S. and the European Union want protected and augmented in the developing countries. The developing countries say, “Hey, we’re not ready to do that yet, we’re developing.” So there’s blame on both sides, and no one seems to be able to find the middle ground.
RYSSDAL: Riordan Roett is the director of the Western Hemispheres Studies Program at John Hopkins University in Washington, D.C. Professor Roett, thanks very much for your time.
ROETT: You’re very welcome.
There’s a lot happening in the world. Through it all, Marketplace is here for you.
You rely on Marketplace to break down the world’s events and tell you how it affects you in a fact-based, approachable way. We rely on your financial support to keep making that possible.
Your donation today powers the independent journalism that you rely on. For just $5/month, you can help sustain Marketplace so we can keep reporting on the things that matter to you.