Lula says Brazil, US can change world energy matrix

Mar 12, 2007, 17:35 GMT

Brasilia - Brazilian President Luiz Inacio Lula da Silva said Monday that the deal with the United States to create a global market for ethanol could change the world's energy matrix.

'I am convinced that, if the United States and Brazil are well disposed to abide by the protocol which we signed, we will reach a turning point in the world's energy matrix, in the field of fuels, over the next 20 or 30 years,' Lula said in his weekly radio programme, Breakfast with the President.

Lula's comments came after he hosted US President George W Bush in Sao Paulo Friday. Both governments - which together produce around 72 per cent of the world's ethanol - signed a memorandum of understanding with an aim to boost the use of biofuels in third markets, especially in Central America and the Caribbean.

The Brazilian president said the agreement paves the way for countries around the world mixing ethanol into the petrol they consume, which in Brazil is done in an obligatory proportion of 23 per cent, and to reduce their emissions of polluting gases.

Lula said biofuels will again be at the top of the agenda when he meets Bush in the US on March 31.

'The United States remains our main individual partner as regards trade, and it is the main individual investor in Brazil. So we have a historic relationship. We want to maintain it, we want to improve it, without renouncing our major commitment, which is the whole process of strengthening Mercosur,' he stressed.

The Brazilian president said another key topic of his upcoming discussion with Bush is set to be agricultural subsidies granted to farmers in the United States and the European Union by their governments, which disrupt access to those markets for Latin American agricultural products.

Lula said an opening of the agricultural markets of developed countries in the Doha Round of talks at the World Trade Organization (WTO) would lead to concessions by their less industrialized counterparts in the fields of manufacturing and services.

'We are willing to do our part, bearing in mind proportionality and the wealth of each country. Because in the case of agriculture, while in Brazil we still have 25 per cent of the population working in the fields and in Africa there are countries which have 70 per cent, France has 2 per cent,' Lula said.