Reuters, 06.05.03, 11:53 AM ET By Louise Egan

SANTIAGO, Chile (Reuters) - The Chilean government is as euphoric as proud parents of a newborn baby -- after a long and tortuous labor it is about to give birth to a bilateral free trade agreement with the United States.

Chile's Foreign Minister Soledad Alvear and U.S. Trade Representative Robert Zoellick will sign the treaty Friday in Miami, sealing 11 years of negotiations that ended last December. Both Congresses are likely to approve it this year. An oasis of calm in a continent swirling in economic and political turmoil, Chile is the only country in Latin America, apart from Mexico, to win Washington's blessing as a preferred trade partner.

For U.S. President Bush, the deal has mostly symbolic value -- it is a potent message he is serious about jump-starting talks for a wider hemispheric free trade zone.

But for Chile's socialist President Ricardo Lagos, the deal with his biggest export market and foreign investor is a giant stamp of approval for over a decade of free market, export-oriented policies and political stability.

"We have our own internal problems but we're way better off than other (Latin American) countries," said Jaime Lean, a gas-mask manufacturer whose exports to the United States skyrocketed after the Sept. 11 attacks there.

The deal will set Chile further apart from much of Latin America, where countries like Argentina have defaulted on their debt, Peru and Venezuela are rocked by violent street protests and Colombia is gripped by a leftist guerrilla war.

Visitors to Santiago are amazed by its ultra-modern airport and highways and orderly traffic. Unlike neighboring countries, police hand out fines in disgust if someone attempts a bribe. One in five Chileans has a home computer, over half use mobile phones and 75 percent own their homes.

Washington's dismay at Lagos' opposition to the Iraq war cost only a minor delay in the signing of the deal.

"Being in a bad neighborhood right now actually helps Chile," said Patricio Navia, a political scientist. "Because it's the best behaved country in the continent, the U.S. rewards that. The U.S. wants to show other countries the way."

But Chile hopes its closeness with Washington won't hurt relations in the region. Foreign Minister Soledad Alvear said in Argentina that Chile is committed to integration with its neighbors as an associate member of the Mercosur trade bloc. Surprisingly, it is small players like Lean, the gas-mask maker in search of niche markets, who will benefit most with the trade deal, which cuts import duties on 85 percent of industrial goods traded between the two countries.

U.S. consumers will not see a flood of copper, salmon, wine and grapes -- Chile's top exports to the United States. In fact, traditional trade is expected to climb only marginally because most goods already are traded duty-free.

Critics say Chile's zeal for globalization has not bridged the income distribution gap, the worst in Latin America after Brazil. Others fear an invasion of U.S. fast-food chains and cheap products could bulldoze local culture.

The National Chamber of Commerce estimates, however, that trade deals with Washington and the European Union alone will boost economic growth by 2 percent a year.

<a href=www.mpa.gr>Macedonian Press Agency Athens, 5 June 2003 (18:20 UTC+2)

The EU congratulates the Venezuelan government and opposition in signing a political agreement on May 29. The EU also recognizes the invaluable role played by the Secretary General of the Organization of the American States, the Carter Center and the UNDP in helping to facilitate a mediation process over the last seven months between the government and opposition representatives. The EU calls upon all parties to proceed without delay to the necessary follow up, e.g. re-establishing of the electoral council, updating the voters' register, and other preparations as mentioned in the agreement. The EU stands ready to assist in the implementation of the agreement and provide technical assistance for the preparation of any type of electoral consultation.

The EU hopes that this latest agreement will prove a significant step and solid basis for the process of solving the political crisis in Venezuela within the framework of the constitution, the rule of law and democratic principles.

The Acceding Countries Cyprus, the Czech Republic, Estonia, Hungary, Latvia, Lithuania, Malta, Poland, the Slovak Republic and Slovenia, the Associated Countries Bulgaria, Romania and Turkey and the EFTA countries, members of the European Economic Area align themselves with this declaration.

<a href=www.vheadline.com>Venezuela's Electronic News Posted: Thursday, June 05, 2003 By: Dawn Gable

Date: Thu, 05 Jun 2003 01:29:40 +0000 From: Dawn Gable morning_ucsc@hotmail.com To: Editor@VHeadline.com Subject: exile vote

Dear Editor: I don't understand. Why exactly should exiles be allowed to vote?

I was born in California. But then I lived in Michigan ... I was not allowed to vote in California elections while I lived in Michigan. In fact, I cannot even vote in the next county over. I vote according to where I live on issues that directly and immediately affect where I live.

There are reasons for this:  One, Californians do not want to have to live with the consequences of what Michiganders might vote for (say a nuclear waste dump in the central valley of California). And two, the Michiganders would be free of the consequences of their votes. Talk about NIMBY (not in my back yard) chaos!

I believe that US citizens abroad can vote in US federal level elections ... but I don't know about those who have given up residential status. I'm sure those who no longer pay US taxes may no longer vote in the US.

I know that Mexicans living in the US are not allowed to vote in Mexico's Presidential elections via absentee ballot even if they are still Mexican citizens and still legally considered residents of Mexico.

• Cuban exiles are definitely not allowed to vote in Cuban elections (and YES they do hold elections in Cuba).

I guess I always thought that the right to vote was something you earned by being a participating member of your community, state, and/or country.

Why should those who abandoned their country be allowed to take part in the decision making process.

Why should they have any influence over the daily life that they refuse to participate in.

Not to mention: I am sure those living abroad are not paying taxes to the Venezuelan government on earnings they are making abroad. This is a requirement for US citizens living abroad.

Dawn Gable morning_ucsc@hotmail.com

<a href=www.vheadline.com>Venezuela's Electronic News Posted: Thursday, June 05, 2003 By: Gustavo Coronel

VHeadline.com commentarist Gustavo Coronel writes: As I receive a report from the Associated Press titled "Cultivating Caracas," which deals with the attempts made by the government to "farm in Caracas," I see on TV that the Deputy Minister of Agriculture has been fired ... he is being fired because he criticized food price controls imposed by the government ... he said that price controls had produced a sharp decline in agricultural and animal production and should be revised.

• Of course, the President fired him and rightly so ... a dissenting public officer has no place in this government. However, the bureaucrat was right.

The decline in food production in Venezuela can not be reversed by means of the isolated patches of land being farmed in Caracas behind wire fences, to prevent the access of the ordinary people. As a result, what could be a welcome manner to beautify the ugly city, has become a new symbol of discrimination.

I met briefly with former Minister of Agriculture Hiram Gaviria ... a former Chavez Ambassador to France ... and he had this to say about the situation of food production in the country at this point in time:

The value of total agricultural production, which includes vegetable, animal, fisheries and forestry products, has been systematically declining. FEDEAGRO, the national association of rural producers, claims that the decline was in the order of 5.1% in 2001 and 4.8% in 2002 ... practically 10% in the last two years.

• In 2002, rice production came down 12.3%; corn a disastrous 30.2%; sorghum 29%; coffee 9.8%; milk 4.1% and beef 5.8% ... there were increases in sugar cane 7%, chickens 0.3% and pork 4%.

The area under cultivation has gone from 2 million hectares in 1998 to less than 1.6 million hectares in 2002. During the 1999-2002 period 240,000 jobs have been lost in rural areas and in the food industry at large, going from 1.2 million to 960,000.

This year, 2003, the agricultural sector is expected to shrink another 6%. We are already in the wet season and there is no action from the government to promote production, beyond speeches and vague promises. The growers, who used to plant during the winter cycle, lack seeds, fertilizers and agrochemical products which are essential to their work. Financing is very scarce and expensive, and contracts to buy the crops are practically non-existent.

Animal population is also declining ... beef cattle has gone from 13 million head in 1994 to 11.4 million in 2003.  Dairy cows have declined 3% due to increasing cost of feed, medicines, machinery and electricity. These two sectors are particularly hard hit by the dangerous living conditions in rural areas, where cattle rustling, kidnappings and land invasions have reached record high proportions. According to FENAVI, the federation of chicken producers, production has gone down 14% between Q1 2002 and the Q1 this year.

Food consumption, on the other hand, has also declined significantly, due to decreasing local production, food price controls and the impossibility to acquire foreign currency to import raw materials. Chicken consumption, for example, has gone down from 27.5 kilograms per capita in 2002 to a projected 18.5 kilograms per capita this year. Egg consumption has decreased from 117 units per capita in 2002 to some 110 units per capita this year.  Beef cattle producers in FEDENAGA say that beef consumption has declined from 18.2 kilograms per capita in 2002 to 17.2 kilograms this year ... there is evident scarcity of basic items such as pasta, bread, chicken, eggs, corn flour, vegetable oils, rice and other grains.

To face this disastrous situation the government has chosen to directly import large amounts of food, rather than promoting local production. Chicken is coming from Brazil and also from China. Wheat flour is coming from Italy. Milk from eastern Europe. Beans from China. Worse still, most of these imports are routed through Cuba and handled by Cuba ... which makes the acquisition costs unnecessarily expensive while transactions lack transparency. Some of the products are wrapped in paper printed with political slogans and are considered by the consumers to be of very low quality. Behaving in this manner, the government violates Constitution Article 299 which protects free competition, Article 301 which prohibits the State from allowing foreign companies or governments better terms than those allowed to nationals and Article 305 which reads that food security will be guaranteed through the promotion of local production.

Venezuela should not be in an agricultural crisis ... it has about 10 million hectares good for farming, rather better than the backyard of the Caracas Hilton. There are tractors, producers and rural roads. What we do not have is a reasonable agricultural policy ... a policy which could be based in no more than 5 points:

1. To determine what are our comparative advantages and concentrate on them instead of trying to produce everything, which often amounts to nothing;
2. Provide the necessary financial resources to increase production and productivity;
3. Coordinate price policies with the participation of both government and producers, not set prices unilaterally;
4. Stop invasions of private and producing land and protect private property, and,
5. Establish a true alliance between producers and government to really provide food security.

Mr. Gaviria is not optimistic about the possibility that these policy can be put together under this regime. He probably knows what he is talking about since he was a member of Chavez' close political environment up to a year or so ago, when he decided to break away on matters of principle.

The farming of Caracas is no more than a publicity stunt designed to make the ordinary citizen believe that things are being done, while very little is really being done.

No matter what sector we look at, agriculture, mining, petroleum, tourism, education, health, we see the same abysmal incompetence all across the board.

This is the reason why we can not wait patiently to change this government ... each day we wait the country dies a little ... instead of becoming more prosperous.

Governments which promote poverty and unhappiness among the people should be sent to the trash bin of history...

Gustavo Coronel is the founder and president of Agrupacion Pro Calidad de Vida (The Pro-Quality of Life Alliance), a Caracas-based organization devoted to fighting corruption and the promotion of civic education in Latin America, primarily Venezuela. A member of the first board of directors (1975-1979) of Petroleos de Venezuela (PDVSA), following nationalization of Venezuela's oil industry, Coronel has worked in the oil industry for 28 years in the United States, Holland, Indonesia, Algiers and in Venezuela. He is a Distinguished alumnus of the University of Tulsa (USA) where he was a Trustee from 1987 to 1999. Coronel led the Hydrocarbons Division of the Inter-American Development Bank (IADB) in Washington DC for 5 years. The author of three books and many articles on Venezuela ("Curbing Corruption in Venezuela." Journal of Democracy, Vol. 7, No. 3, July, 1996, pp. 157-163), he is a fellow of Harvard University and a member of the Harvard faculty from 1981 to 1983.  In 1998, he was presidential election campaign manager for Henrique Salas Romer and now lives in retirement on the Caribbean island of Margarita where he runs a leading Hotel-Resort.  You may contact Gustavo Coronel at email gustavo@vheadline.com

June 5 (<a href=quote.bloomberg.com>Bloomberg) -- Brent crude oil fell a second day in London after a U.S. Energy Department report showed a larger-than- forecast weekly gain in crude-oil inventories, amid expectations OPEC probably won't cut output quotas next week.

U.S. supplies rose 2.8 million barrels to 289 million, the department said yesterday, more than the 350,000-barrel gain that was the average expected by nine analysts in a Bloomberg survey. Most analysts said OPEC won't change output quotas next week because it's too soon to gauge how much oil Iraq may soon export.

If there is no OPEC cut I think you'll see the bull run ending, Brent has risen a lot recently,'' said Bruce Evers, an analyst at Investec Henderson Crosthwaite in London. OPEC will want to wait and look at Iraqi exports, there's no real need to do anything yet.''

Brent crude for July settlement fell as much as 46 cents, or 1.7 percent, and was down 34 cents at $26.47 a barrel in early open- outcry trading on London's International Petroleum Exchange at 10:31 a.m. London time. Prices rose 11 percent last month, buoyed by optimism about U.S. summer demand for gasoline and earlier expectations for a cut in supplies from the Organization of Petroleum Exporting Countries .

On the New York Mercantile Exchange, crude oil for July delivery was down 32 cents at $29.73 a barrel in after-hours electronic trading. New York prices fell 2 percent yesterday to $30.05.

It was always a big ask for it to stay above $30,'' said David Thurtell, commodities strategist at Commonwealth Bank of Australia in Sydney. The risk was always that stocks would rebound, which they have.''

`Wall of Crude'

U.S. crude oil inventories gained for a third week as imports jumped close to a record, the Energy Department report showed. Imports leapt to 10.5 million barrels a day, the highest since a record in April. U.S. gasoline inventories also rose, reversing most of the prior week's decline.

The long-awaited wall of crude is arriving,'' said Deborah White, commodities economist at Societe Generale in Paris. Saudi crude arrivals are holding up and Venezuela's, targeted at U.S. Gulf Coast refiners, have increased significantly.''

OPEC meets June 11 in Doha, Qatar, to consider whether to cut output because of the resumption of Iraqi oil exports, which were halted when the U.S.-led invasion in March.

Iraq has begun resuming exports with a tender to sell 2 million barrels of Basrah Light crude oil stored at its southern port and 8 million barrels of Kirkuk crude oil held at the Turkish port of Ceyhan, according to a statement distributed in Baghdad.

Delivery is between June 17 and 30, and bids are to be submitted by 5 p.m. London time on June 10. Preference will be given to oil refiners, the statement said.

``We have already received a lot of interest,'' said Mohammed Al Jibouri, the director-general of Iraq's State Oil Marketing, in an interview in Baghdad.

OPEC

Iraq pumped about 2.5 million barrels of oil a day before the war, or about 3 percent of world supply.

OPEC should keep quotas unchanged and only cut them when Iraqi supply reaches pre-war levels, OPEC President Abdullah bin Hamad al- Attiyah said in an interview this week. Iraq may pump that much by September, according to U.S. officials.

Iraqi officials in Baghdad ``are talking about clearing inventory at Ceyhan as a one-off tender but you still have major issues over (oil) quality and the state of the infrastructure, pipelines and so on,'' before there's a constant flow of exports, Investec Henderson's Evers said.

Even without a formal cut in quotas, Saudi Arabia may reduce the extent to which its exceeding its OPEC quota if prices begin falling fast, Evers said. Saudi Arabia pumped 9.1 million barrels a day last month, which was 14 percent greater than its quota for that month, and 10 percent more than a new lower quota that took effect June 1.

``I think you will see the Saudis cutting back some, without any song and dance,'' he said.