Brazil President Luiz Inacio Lula da Silva welcomed U.S. President George W. Bush to São Paulo in early March to discuss future economic and policy issues facing the international proliferation of biofuels production. "On March 9, Secretary of State Condoleezza Rice and Brazilian Foreign Minister Celso Amorim signed a memorandum of understanding to advance cooperation on biofuels," the U.S. state department said. Three goals of the multinational initiative are reducing biofuels production costs, abating demands on land and relieving pricing pressures on feedstocks throughout the Western Hemisphere.

Prior to the presidential tête-à-tête, stateside organizations like the Renewable Fuels Association (RFA) were anxiously defending the 54-cent U.S. tariff on imported ethanol, worrying that these talks—and strong Brazilian intentions—would lead to its repeal. "[Repealing the tariff] is exactly what President Lula and the Brazilian government are asking for …," said RFA President Bob Dinneen prior to Bush's visit. The state department made it clear that this initiative doesn't include language addressing trade, tariffs or quotas.

"Regionally, the two nations intend to help … countries, beginning in Central America and the Caribbean, to stimulate private investment for local production and consumption of biofuels," the state department said.

"[It] demonstrates to our friends in the hemisphere that we are ready partners in advancing our common interest for energy security," said U.S. Sen. Richard Lugar, R-Ind., in response to the memorandum's signing. "The agreement aims to intensify collaboration on next-generation biofuels technology and develop international standards for biofuels in cooperation with other nations."