During a press conference Friday with Brazilian President Luiz Inacio Lula da Silva, President Bush said, “I hope the citizens of Brazil, like the citizens of the United States, are as optimistic about the future as these two Presidents are. And one reason we’re optimistic is because we see the bright and real potential for our citizens being able to use alternative sources of energy that will promote the common good.”

The two countries signed a memorandum of understanding Friday that includes joint research to develop commercial cellulosic ethanol, developing industrial biofuels standards and helping Caribbean and Central American countries produce more ethanol. Bush and Lula will meet at Camp David on March 31 to continue discussions.

President Lula noted that the agreement will also include joint development of biodiesel between the two countries. “In the field of ethanol we have an extremely successful program that’s come out of over 30 years of very much work and technological innovation. We are doing the same thing in our betting on biodiesel. By 2010, Brazilian diesel, 5 percent of it will come from native abundant plants in our country, such as African palm, cottonseed, sunflower, castor beans, and many other seeds,” said Lula.

“Also, our biodiesel program has a major social impact. It is aimed at small farmers to family farmers. It will help create jobs and income in the poorest regions of our country, especially in the northeastern semi-arid region, where many of these crops are actually native.”

The agreement makes no mention of the tariff on Brazilian ethanol imports to the United States, which is meant to offset the blenders tax credit for ethanol use that provides an incentive for domestic production and utilization. Bush had said going into the discussions with Brazil that the tariff would remain in place and was not open to negotiation.

Read the entire text of the presidents’ press conference from the White House website.