If you fly from Denver to Atlanta or Grand Junction, you are likely to fly on an Embraer regional jet, made in Brazil. If you’re worried about gas prices, someday you may drive a “flex car” that runs on ethanol, gasoline and diesel, also made in Brazil. You might even be filling your car with ethanol produced in Brazil.
When it comes to regional jets, Denver International Airport has the second highest usage of small, 50 passenger jets of any airport in North America (43 percent). That’s because we’re a big regional hub airport with lots of flights to smaller cities carrying fewer passengers. Nearly half of those small planes are made by Embraer at its Sao Paolo factory.
Regional jets make air travel less expensive and more convenient. Airlines can schedule more flights to smaller markets if they fly planes that carry fewer people and cost less to operate. For Denver, that is key to the success of DIA as a hub airport and also to the variety of choices we Coloradans have in air travel. If we didn’t have a Brazilian company as a major supplier of regional jets, the economics of DIA and the airlines that serve it would be less attractive. That would be bad for Colorado.
Meanwhile, while we hype ethanol made from corn as a way to reduce our dependence on foreign oil, corn is nonetheless an inefficient source of ethanol. Brazil produces ethanol from sugar cane, roughly eight times more efficient than corn as an ethanol source. Brazil has millions of acres of arable land that are not yet farmed (and not in the Amazon Basin) and available to grow sugar cane. That could make Brazil a substantial competitor in the ethanol industry and also a large source of the fuel in the future.
We may find ourselves looking to this huge South American country to help us feed our energy habit, which currently consumes 25 percent of the world’s energy.
But right now, we charge a tariff of 43 cents per gallon on two-thirds of the ethanol we import. This at a time when our dependence on foreign oil is enormous and extremely expensive. Corn growers love the tariff because it gives them a protected market. But that’s not necessarily good for the rest of us or for our economy or national security. As our need for alternative sources of fuel grows, we will need to rethink this particular trade barrier.
Brazil is by far the largest economy in South America and one of the largest in the world. American companies have been manufacturing cars, electronics, drugs and countless other products in the country for decades for both its internal and export markets. As its standard of living improves, it’s becoming not just an important manufacturing base for American business, but also a huge potential market for American products.
Put all this economic activity together and you have a crucial international relationship for both Colorado and the U.S. Brazil is a critical leader among developing nations as we try to negotiate new global trade agreements. They resent our protection of agriculture that limits their ethanol exports. We fear they may be too cozy with the American-hating president of Venezuela, Hugo Chavez, who provides much of our oil.
Given the importance of Brazil as an economic partner, we should focus more on this diverse country. We will need its friendship in the future — to bolster our energy supplies and our travel options, our export opportunities and our global trade negotiations. For Colorado’s and America’s economic well-being, this is a nation worth cultivating.
