The president of Brazil, Luiz Inácio Lula da Silva, during his official visit to El Salvador invited Central American nations, which are grouped in the SICA, Central American Integration System, to join Mercosur and at the same time strongly promoted the use of ethanol in the region.
"We wish to see SICA associated with Mercosur," said Lula addressing the II SICA-Brazil Business Forum, which convened over 150 businessmen from Central America and from the visiting Brazilian delegation into El Salvador City.
"Negotiations for a free trade agreement between Central America and Mercosur have been a challenge for Brazil and our Mercosur partners for some time. We can't depend on a few economies to look for new market niches," the Brazilian leader stressed.
Lula said that trade between Central America and the four full members of Mercosur had jumped 280% in four years to 2007, from US$ 594 million to US$ 1.7 billion.
El Salvador president, Elias Antonio Saca, said that Central America has the conditions and opportunities to attract foreign trade. "Central America has become stable and reliable" he said adding that what cost Europe over six decades "we're achieving it much faster."
From neighboring Guatemala President Alvaro Colom announced he's prepared to reach a bilateral trade agreement with Brazil if the Mercosur-SICA association process is delayed.
"If by October the process has not advanced Guatemala will begin bilateral talks with Brazil," said President Colom.
The Brazilian president as has become usual in his overseas incursions defended the development of the ethanol industry as an option for fuels.
"Central American countries must be the first in making clear the controversies that have been intentionally created regarding bio fuels by the developed countries."
He underlined that "it's possible to combine the production of a new energy matrix with increasing food production with no problems."
Brazil is already cooperating technically with El Salvador for the production of biodiesel from local crops. However the facilitating bill for such an undertaking and other alternative energy sources remains stalled between the El Salvador executive and legislative branches.
The bill has been promised for over a year and a half but still the final draft has to surface.
President Saca said the initiative will be in Congress "next week," but Agriculture department sources said "a month" was a more appropriate estimate. El Salvador private sector is very much interested in biofuels as an alternative.
"One of the most important points of the forum was cooperation in biofuels, particularly ethanol of which Brazil leads in the world," said Federico Colorado president of the Manufacturers association of El Salvador.
"We hope that ethanol becomes a true option for Central America and a common effort and task, so that we can find a solution to the soaring prices of oil and fossil fuels," added Colorado.
SICA is made up of Belize, Costa Rica, El Salvador, Guatemala, Honduras, Nicaragua and Panama with Dominican Republic as associate member.
Argentina, Brazil, Paraguay and Uruguay make up Mercosur with Venezuela in the process of incorporation and Chile, Bolivia and Peru as associates.