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Last Updated: Saturday, 10 March 2007, 01:12 GMT
US-Brazil deal to boost bio-fuels
Protester holds banner reading 'Hold a tree' outside Sao Paulo's Hilton Morumbi Hotel
Protesters fear the fuel deal will lead to more Amazon deforestation
The United States and Brazil have signed an agreement to develop alternative fuel sources.

US President George W Bush said that by reducing oil dependence the two countries would be helping security, their economies and the environment.

His host, President Luis Inacio Lula da Silva, said the deal was a new moment for the car industry, fuel production and humanity in general.

Mr Bush has now continued to Uruguay, the second stop on a five-nation tour.

About 5,000 people people demonstrated against him on his arrival there, and there had been similar protests earlier during his stay in Brazil.

We see the bright and real potential for our citizens being able to use alternative sources of energy that will promote the common good
President Bush

Correspondents say the US president will not have seen any of the protests, but a large white balloon with the words "Bush out" emblazoned on the side would have been visible to him as he went to meet Mr Inacio da Silva.

Mr Bush is now in Montevideo, and he will later continue to Colombia, Guatemala and Mexico during his six-day tour of Latin America.

Coinciding with Mr Bush's visit to Uruguay, Venezuelan President Hugo Chavez is visiting Argentina, across the River Plate, where he called Mr Bush a "political corpse" during a rally in a football stadium in Buenos Aires.

'Strategic partnership'

Mr Bush and Mr Lula met at a fuel distribution plant in Sao Paulo.

The meeting came as US Secretary of State Condoleezza Rice and Brazilian Foreign Minister Celso Amorim signed a deal making ethanol an internationally traded commodity and promoting its production in Central America and the Caribbean.

It will pool the experience and technology of the two countries, who are the world's biggest producers of ethanol.

"We come to celebrate a strategic partnership between the United States and Brazil," Mr Lula said as the two men toured the plant.

They said that increasing bio-fuel use would lead to more jobs, a cleaner environment and less dependence on oil.

"We see the bright and real potential for our citizens being able to use alternative sources of energy that will promote the common good," Mr Bush said.

Sao Paulo protest march

But the two men disagreed over the 54-cent per gallon US tariff on ethanol, which Mr Bush said would remain until 2009.

Together with the US, Brazil produces about 70% of the world's ethanol, a bio-fuel made from sugar cane or corn.

Later, the US president defended his country's record in helping Latin American countries to fight poverty.

He denied he had neglected the region.

"That may be what people say but it's certainly not what the facts bear out," Bush said. "We care about our neighbourhood a lot."

He said he was hopeful that the two countries could soon reach agreement in the long dispute over global trade rules.

Rainforest fears

On Thursday, about 10,000 people spilled out along one of San Paulo's broadest avenues, in the heart of the financial district, banging drums, waving red flags and carrying banners reading "Bush Go Home".

It is time we stopped stereotyping the US as a ghastly empire and started negotiating with them... Move on!
Sandra Sena, Rio de Janeiro, Brazil

Although largely peaceful, clashes flared between some of the protesters and police. At least 20 people, most of them police, were injured.

Activists are protesting against ethanol production, saying that sugar cane cultivation is water intensive and responsible for stripping the Amazon rainforest.

Many of the demonstrators are also angry at the war in Iraq.

The BBC's Lourdes Heredia in Sao Paulo says that while the majority of people in the city are suspicious of the visit they seem ready to give President Bush a chance.

"Bush is not a close friend, but he is not our enemy either... I think we should have good relationships with everyone," shopkeeper Anne Helene told the BBC.

President Luis Inacio Lula da Silva on the bio-fuel deal

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