6 - Brazil’s Multilateral Ethanol Diplomacy

Summary

Introduction

Since the 1990s, Brazil has been a proponent of multilateral organisations. Despite its traditional focus on autonomy, Brazil understood that multilateral organisations and global governance arrangements could leverage its power resources vis-à-vis the countries of the Global North and at the same time limit the extent of their reach, especially that of the United States. With its strategy of autonomy through participation, Brazil aimed at shaping the global governance framework, and thereby the international structure, to its benefit. Brazil's multilateral ethanol diplomacy is one example where the country aimed for a substantial structural adjustment in its favour by displaying expertise, exerting power over smaller partners and balancing against the United States and the European Union.

As outlined by Kloss (2012), Brazil aimed at promoting ethanol as an alternative fuel on the multilateral level, particularly within the World Trade Organization (WTO). The WTO was founded in 1995 as a result of the General Agreement on Trade and Tariffs (GATT) negotiations in order to reduce tariffs and, more generally, obstacles to international trade. Brazil is a founding member of both the WTO and GATT.

The main issue Brazil faces regarding its multilateral ethanol diplomacy is that apart from nuclear energy, there is currently no global energy governance system in place. Therefore, ethanol is traded according to WTO rules of agricultural products, which means that ethanol made from sugarcane can be subjected to tariffs and trade is subject to bilateral rules and commitments.

Brazil therefore aimed to include ethanol into a general governance regime that would free ethanol from such restrictions and enable a global free market, which would discriminate less against ethanol as compared to fossil fuels. The WTO Doha Round seemed an appropriate venue for this undertaking with its focus on sustainable development.

Ethanol, however, faced other issues as well, mainly questions regarding standards of quality and sustainability. Brazil sought venues outside the WTO to address these questions, in particular the United Nations–supported International Biofuels Forum (IBF) and the OECD-and G8-supported Global Bioenergy Partnership (GBEP). Both fora were also used to run outreach and information campaigns for third-party countries – mainly from the Global South – to convince them of the introduction of an ethanol economy.