Shield effect: Defend. If this character can already use Defend, adjacent friendly characters modify defense +1.
Cosmically evolved power adaptation: At the beginning of your turn or after resolutions when Amazo takes damage, you may choose a standard power that a character within range and line of fire can use. Amazo can use the chosen power until he chooses again.

I have 2 questions:
1. If Amazo is equipped with the shield, can he choose to copy Defend from himself using his trait?
2. If he does, since he can now “already use Defend,” would adjacent friendly characters get the +1 to defense?

Thanks!

1. Yup! Amazo is a character within range and life of fire of himself, just like you can Perplex yourself. Since he can use Defend due to having the shield equipped, it's now "a standard power that a character within range and line of fire can use." He could pick any Standard power that he can currently use, such as his opening Running Shot, and would then keep it until he chooses again even if he clicks off of it.

2. This is also indeed the case. Once he chooses that he can use Defend until your next turn, he can then already use Defend for the purposes of the shield's EFFECT ability since he can now use it from a different source (his trait).

This is a very interesting interaction.

LOL, yep, a veritable Chicken or the Egg conundrum!?!