April 11, 2007

Venezuela president vows to undermine US-Brazil ethanol deal
 

Venezuela's President Hugo Chavez pledged to undermine a US-Brazil ethanol agreement, but denied any conflict with his South American neighbour and ally.

In a televised speech on Tuesday, Chavez said he plans to "knock down" the ethanol proposal in the same way he lobbied against a US-backed hemispheric trade pact.

"We are working on an alternative proposal," he said without elaborating. "Just as we overthrew the Free Trade Area of the Americas, we will now overthrow the ethanol plan."

US President George Bush and his Brazilian counterpart, Luiz Inacio Lula da Silva, signed a memorandum of understanding last month to promote international ethanol use and production. The two countries are the world's leading producers of the alternative fuel.

Chavez has accused the US of trying to promote an ethanol cartel to divide the region, and warned that ethanol production will end up destroying the environment if the aim is to replace US gasoline consumption with fuel from industrial agriculture.

But he denied having any conflict with Lula, and accused Washington of trying to manufacture a confrontation.