http://www.brownfieldnetwork.com/gestal ... B4BB65FA81

Senators fear U.S.-Brazil ethanol deal
Wednesday, March 7, 2007, 2:24 PM

by Peter Shinn

Audio related to this story

AUDIO: Peter Shinn reports (1 min 25 sec MP3).

A bi-partisan group of farm-state senators are concerned about a potential partnership on ethanol between the U.S. and Brazil, a subject President Bush is expected to bring up with Brazil's President Lula when the two meet Thursday. In a joint press conference with South Dakota Senator John Thune (R) Wednesday, Iowa Senator Chuck Grassley (R) told reporters he's not interested in subsidizing the ethanol industry of any other country.

"We don't want to replace U.S. dependence on foreign oil with foreign oil," Grassley said. "And if the Caribbean nations want to build an ethanol plant, they can do it on their own dime."

Thune agreed with Grassley, and said any potential efforts to back Brazil’s ethanol industry are premature. "It simply doesn't make sense for an American president to be promoting the growth of ethanol industry in foreign countries when our ethanol industry here in this country is really just getting off the ground," Thune said.

In fact, Brazil is already the world’s top ethanol exporter, sending over 600 million gallons directly to the U.S. last year alone, even with a 54 cent per gallon tariff. And Nebraska Senator Ben Nelson (D) told reporters Wednesday in a separate conference call that President Bush shouldn't discuss removing that tariff during his trip to Brazil.

"Eliminating or reducing the tariffs on foreign ethanol - doesn't make any sense to flood our market with foreign products without the tariff just when our domestic production is getting off the ground," Nelson said.

The Bush administration is eager to show Brazil it can do more for the country than the left-leaning government of Venezuela's Hugo Chaves. But Thune said supporting Brazil's ethanol industry isn't the way to achieve that goal.

"I know Brazil is very interested in having that tariff lifted and I'm sure the president is looking for issues he can work with our friends in Latin America on," said Thune. "But there are lots of other issues that he and President Lula can work on without selling out our domestic ethanol industry."