March 8, 2007: Ostensibly President George W. Bush's trip to Latin America is about trade policy and ethanol. But the visit, to Brazil, Uruguay, Guatemala, Colombia, and Mexico, is also intended to off-set the apparently rising influence in the region of Venezuela's unstable President Hugo Chavez.

The choice of countries to visit seems very carefully calculated. Brazil may be the world's potentially most important ethanol producer (sugar cane is a much cheaper source for ethanol than corn), but Brazil also has a long history of aspiring to be the leader of Latin America. In the past decade or so, Brazilian influence has risen markedly. Argentina, a perennial rival for leadership in the region, and Uruguay, a wary "little fellow" caught between the two regional great powers, have more or less conceded Brazilian leadership in recent years. So Chavez' ambitious efforts to spread Venezuelan influence is not viewed kindly in Brasilia.

Brazil's left-leaning president, Luiz Inacio Lula da Silva, and the rest of the country's political leadership, left, center, or right, have taken notice of a number of Chavez' recent moves, and regarded them as threatening Brazilian leadership in the region. For example, there's Venezuelas military build up. Ostensibly Chavez claims his weapons shopping spree is intended to deter a U.S. invasion of his country (a self-fulfilling prophecy; since the U.S. has no intentions of invading, thus he can claim his arms build up has worked!).

But Venezuela has territorial claims on a number of adjacent countries and several European dependencies in the Caribbean. Venezuela is also supplying military personnel and arms to places like Bolivia, which also has territorial claims on its neighbors, pretty much all of its neighbors, including Brazil, Argentina, Chile, and Paraguay.

There's also an economic side to Brazilian concerns about Venezuelan influence. Chavez has opted to buy his weapons from Russia, rather than Brazil. Brazil has a small, robust local defense industry, which produces excellent equipment at competitive prices. By buying from Russia Chavez is deliberately going out of his way to avoid helping his "Latin Brothers," and certainly not getting much more bang for his buck. In addition, Chavez has encouraged Bolivian populist President Evo Morales to nationalize foreign businesses, many of which are Brazilian-owned.

So Chavez is probably even more of a headache to the Brazilians than to the U.S. This gives the two countries a lot of common ground. But too often in the past, the United States has ignored legitimate local leadership, and gone blundering into some actions that usually leave things in worse shape than before. The key to developing an effective policy in the region is that the U.S. should let Brazil, and the other Latin American countries with an interest in opposing Chavez, take the lead. This is apparently the approach President Bush has decided to take. Bush seems to be endorsing the pro-entrepreneur economic reforms that Lula da Silva is pushing, which has brought Brazil greater prosperity, in contrast to the increasingly statist policies being pushed by Chavez and his acolytes such as Morales. This is a good sign, and should sell well in Latin America.