MercoPress. South Atlantic News Agency

Kirchner/Lula reinforce “strategic alliance” and discuss bio-fuels

Argentina's Nestor Kirchner and Brazil's Luiz Inácio Lula da Silva strengthened the “strategic relationship” between the two largest members of Mercosur during a presidential summit in Buenos Aires on Friday where bio-fuels and the Southern Bank figured top of the agenda.

Argentine Foreign Affairs minister Jorge Taiana said that the two-hour meeting at the Olivos presidential residence in Greater Buenos Aires was held within an atmosphere of "very good spirits". Argentine Federal Planning Minister Julio De Vido highlighted the wide-ranging agenda of the two presidents and singling out the biofuels sector, said that each country "has its own project," although he anticipated "some synergy" on some issues. De Vido said Argentina will not receive fuel supplies from Brazil "because we have to defend our producers and, in general terms, our own project". Brazil specializes in ethanol produced from sugar cane while Argentina concentrates more on bio-diesel from soy. However Brazilian Foreign Affairs minister Celso Amorim said that Kirchner and Lula discussed "the idea of a common strategy not only in the biofuels sector, but in the energy sector in general". As to the controversial issue of the Southern Bank, proposed by Venezuelan president Hugo Chavez, Argentine Economy Minister Felisa Miceli said that the two presidents only discussed the broad lines of the project. Brazil reportedly is not very enthusiastic about the Southern Bank initiative which is supported by Argentina. In an interview with the Argentine press before his trip to Chile and Argentina, President Lula da Silva said that the objectives of the bank "must be defined correctly". He added several questions: "Is it to be a kind of IMF for countries in financial crisis; a development bank; how are quotas to be split or participation percentages"? Following on that line Miceli said that details of the Southern Bank proposal were left to be discussed on May 3 in Quito at a regional meeting of Economy and Finances ministers and anticipated that Brazil will be an "actor" when the initiative is discussed in Ecuador. In Asunción, Paraguay, US Under-Secretary for the Western Hemisphere Thomas Shannon said that there was "uncertainty" among several South American countries regarding the Southern Bank and admitted that the US believes that "the functioning" of the Inter-American Development Bank and of the World Bank "must be improved". "The idea of the bank is focused on the South American countries and emerged because existing financial institutions do not function in a good way," said Shannon, who was paying a one-day protocol visit to Paraguay. Lula arrived on Thursday night from the World Economic Forum in Santiago de Chile and left Buenos Aires late Friday night. No reporters, only photographers and cameramen were allowed into the Olivos residence during the presidential summit.