Brazil And Mexico Sign Bilateral Deals On Ethanol

The presidents of Mexico and Brazil on Monday signed bilateral agreements to facilitate the creation of a large-scale ethanol industry in Mexico and boost agricultural cooperation between the two Latin American giants.

In several signing ceremonies held during the day, Mexican President Felipe Calderon and Brazil President Luiz Inacio Lula de Silva said the new agreements would help the two largest economies of Latin America to further foster economic growth and regional stability while improving income distribution. "The production of ethanol first of all generates a lot of jobs, while at the same time ethanol is a lot less polluting (than gasoline)," Lula told a press conference, adding that countries that switch part of their energy consumption to ethanol are also helping to combat the effects of global warming. "If just half of what we hear about global warming today is true, biofuels are irreversible and just treating the subject in time, because I don't think that humanity will be that irresponsible to continue to spoil the only planet that we have and which we know give us life," he said. Brazil has for three decades been the world's leader in the production of biofuels through the production of sugar-based ethanol, and Mexico has for several years aspired to copy Brazil's effort in order to generate alternative sources of fuel that at the same time can help combat pollution in cities. No significant details of the new biofuel agreement were released during Monday's events, but government officials confirmed to Dow Jones Newswires that under the agreement, Mexico would open up to large-scale Brazilian investment in setting up ethanol plants. One such ethanol project to be built in part with Brazilian financing and technology is planned for the Mexican Gulf Coast State of Veracruz. Lula is scheduled to sign similar agreements for ethanol projects in Honduras, Nicaragua, Panama and Jamaica later this week, senior officials said. In a separate letter of intent signed by Mexican Agriculture Minister Alberto Cardenas and Brazil's Agriculture Minister Reinhold Stephanes, they pledge to set up a bilateral work group to outline new areas of cooperation and rising competitiveness. The letter of intent made specific mention of the need to revise animal and plant sanitation policies and inspections, a vital step for Brazilian exporters eager to ship produce to Mexico but currently prevented by a ban because of previous cases of livestock diseases. Brazilian industry groups accompanying Lula and Stephanes in Mexico have expressed an interest in starting exports of pork and chicken meat, milk products and rice to Mexico as soon as the ban on such products can be lifted.