The agreement would grow Paraguay’s income to $360 million, which Paraguay President Fernando Lugo has promised to spend on agrarian reform to benefit 300,000 landless peasant families.
Brazil would have to invest in high-capacity power lines across Paraguay to create an energy grid and, in turn, help the poor country reshape its agricultural economy.
Although the treaty was quickly approved by Paraguay’s congress, it is still stuck in the first of four committees needed to approve it in Brazil.
''It is controversial. It's not a simple matter, because it carries more benefits for Paraguay than Brazil,'' Brazilian Rep. Severiano Alves, a member of the lower house's foreign relations committee, told The Associated Press.
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