David Gollust State Department 06 Jun 2003, 22:37 UTC <a href=www.voanews.com>VOANews.com-AP

Colin PowellSecretary of State Colin Powell begins a three-day Latin American trip Sunday. He flies to the Chilean capital, Santiago, to attend a meeting of Organization of American States foreign ministers, and he visits Buenos Aires for talks Tuesday with Argentine officials, including newly-inaugurated President Nestor Kirchner.

Officials here insist the Bush administration has not been neglecting Latin America, despite its recent preoccupation with Iraq and the Middle East dispute.

But they nonetheless say the Powell trip begins an "intensified U.S. focus" on the region that also included Friday's conclusion in Miami of the long-awaited U.S.-Chilean free trade agreement.

The deal, the product of 11 years of negotiations, is seen as a prelude to an envisaged hemispheric free-trade regime, and State Department spokesman Richard Boucher said it sets the tone for the Powell mission and the annual OAS General Assembly in Santiago.

"It's good for both the U.S. and Chile, but it's also good for the hemisphere," he said. "So, as we go to these meetings down there, I'm sure we'll talk about relations between our governments, issues of democracy, issues of free trade, issues of progress in the hemisphere."

Chile and Mexico opposed the use of force against Iraq in the U.N. Security Council in March. But a senior U-S official said Mr. Powell does not intend to revive disagreements over the Iraq war, saying there will be a constructive agenda on other issues.

The senior official said the Santiago meeting will have a largely-economic focus, with a hope that severe recessions in key member countries, including Argentina and Peru, have begun to "bottom out."

The ministers are expected to approve a plan for a special OAS summit in Mexico late this year, aimed at promoting economic growth and wider distribution of wealth through good governance and open markets.

The official said the talks will include the political crises in Venezuela and Haiti, and that a joint appeal to Haitian authorities is likely, calling on them to heed an OAS resolution last year, and lay groundwork for free and fair elections.

The United States has been bitterly critical of Cuba's recent crackdown on dissidents. But it will not raise the issue formally at the Santiago meeting, in deference to Caribbean OAS members, who say it should not be on the agenda, as long as Cuba's four-decade-long suspension from the organization continues.

Mr. Powell will have a number of bilateral meetings on the sidelines of the OAS assembly. And he stops in Buenos Aires Tuesday, before his return home, for the Bush administration's first senior-level meeting with Argentina's new populist president, Nestor Kirchner, who was sworn into office May 25.

<a href=www.nzherald.co.nz>The New Zeland Herald 07.06.2003

The United States signed a free trade agreement with Chile today and said its first such accord with a South American nation was a stamp of approval for Chile and a marker for future regional accords.

The agreement was signed in Miami, a US gateway to Latin America, by US Trade Representative Robert Zoellick and Chilean Foreign Minister Soledad Alvear. Congresses in both nations are likely to approve the pact this year.

Zoellick called Chile, an island of political and economic calm in a troubled region, "an exemplary economic partner."

"Chile is the freest, most competitive economy in Latin America and it has set a very high standard," he said.

The agreement, signed after 11 years of planning and negotiations that concluded in December 2002, makes Chile the only country in Latin America apart from Mexico to win Washington's blessing as a preferred trade partner.

Zoellick said the United States hoped the accord would encourage other nations to reach such agreements and would be a boost for talks on an Americas-wide free trade zone.

But critics in Santiago said it benefited only a small percentage of businesses, hurt small farmers and laid Chile open to cheap imports and "plastic American culture."

"We reject the agreement until we know the full impact it will have on Chile. There are other ways of negotiating trade without tying yourself to the biggest economy in the world," said Margarita Iglesias, director of the Chilean branch of French anti-globalisation group ATTAC.

Although negotiations on the pact were completed in December, the actual signing was apparently delayed because of a chill in relations over Chilean President Ricardo Lagos' opposition to the US-led war in Iraq.

Chile, a member of the UN Security Council, did not support US efforts before the war to win a second UN resolution authorizing the use of force to disarm Iraq.

Lagos said the pact would eventually produce a 40 per cent jump in exports to the US, its biggest export market and foreign investor.

Lagos, a left-leaning free trader who has signed free trade pacts with the European Union and South Korea, said exports to the US would increase during the first three or four years of the pact to US$5 billion ($8.74 billion) a year from the current $3.6 billion.

In a televised message to Chileans, he said the country would see the full impact three years after the pact went into effect, when 95 per cent of all Chilean exports would enter the United States duty free. Chile's main exports to the United States are copper, salmon, wine and grapes.

The United States has similar agreements with Canada and Mexico under the NAFTA deal, and with Israel and Jordan.

Washington also recently signed a free trade pact with Singapore that is pending Congressional approval.

The Bush administration hopes the Chile pact will give momentum to talks on the Free Trade Area of the Americas, which is meant to be completed by 2005 and would encompass all 34 countries in the Americas except for Cuba.

At a news conference Zoellick acknowledged the Americas project is far more complex than a bilateral deal but said he had a "cautious optimism" over prospects after a trip last month to Brazil, which is co-chairing talks toward the FTAA.

The Chile accord was welcomed by the Andean Community bloc, which groups Peru, Ecuador, Colombia, Venezuela and Bolivia. Chile was a member until it withdrew in 1976.

June 6 (<a href=quote.bloomberg.com>Bloomberg) -- Brazil's benchmark stock index rose for a fourth day, led by Empresa Brasileira de Aeronautica SA, the world's fourth-largest aircraft maker known as Embraer, on investors' expectation the company may get new jet orders.

Brazil's Bovespa index of the most-traded stocks on the Sao Paulo stock exchange rose 1 percent to close at 13,923.11, its highest closing level since March 2002. The Bovespa rose 3.7 percent this week.

Mexico's Bolsa index in Mexico City was little changed, falling 2.79, or 0.04 percent, to 6870.60, accumulating a 2.6 percent gain in the week. The Argentinean Merval index rose 2.2 percent to 718.70, and 6 percent this week.

Embraer shares rose to their highest level since Jan. 31 after Deutsche Lufthansa AG, Europe's No. 3 airline, Scandinavian Airlines System, and two partners in the Star Alliance said they will make a joint order in the fourth quarter for 100 planes, that may include jets from Embraer. The orders may be worth as much as $4.5 billion. Lufthansa, SAS, Air Canada and Austrian Airlines will take an option for an additional 100 planes.

``As the airline industry gets back to its regular business activity, there's a very positive horizon for Embraer,'' said Eduardo Fornazier, who helps manage about 1.3 billion reais ($452 million) in Brazilian equities, including Embraer shares, and bonds for Banco Santos SA's asset management unit in Sao Paulo.

Other Markets

Argentina's Merval rose to its highest level since December 1997, boosting the Buenos Aires stock exchange's gains in 2003 to 63 percent in dollar terms, the best performance among 61 primary indexes tracked by Bloomberg. In local-currency terms, the index has gained 37 percent.

The Merval is the best option for investors,'' said Christian Reos, an analyst at Allaria Ledesma & Cia Sociedad de Bolsa in Buenos Aires. The U.S. dollar lost attractiveness as the (Argentine) peso strengthened 19 percent this year and interest rates are less profitable than the stocks.''

Main stock indexes in Chile, Venezuela, Peru and Colombia also rose.

The following stocks are having significant gains or losses in Latin American markets today. Symbols are in parentheses after the company name. In Brazil the preferred share is usually the company's most-traded class of stock.

Brazil

Embraer (EBTP4 BS) soared 53 centavos, or 4.5 percent, to 12.23 reais, the largest gain at the Bovespa today.

Embratel Participacoes SA (EBTP4 BS), the country's largest long-distance carrier, rose 5 centavos, or 0.8 percent, to 6.34 reais. The company benefits from a stronger currency that reduces servicing costs of its debt, almost all denominated in foreign currency. The real is gaining 23 percent this year, the best performing currency among 59 tracked by Bloomberg.

Petroleo Brasileiro SA (PETR4 BS), the state-controlled oil company, rose 40 centavos, or 0.7 percent, to 54.30 reais. Petrobras, as Latin America's largest company by market value is known, said this week it found oil in a new offshore field that may boost reserves about 4.5 percent. The Rio de Janeiro-based company estimated the discovery off the coast of southern Espirito Santo state contains about 500 million barrels of oil reserves.

Mexico

Cemex SA (CEMEXCP MM), the world's third-largest cement maker, gained 86 centavos, or 1.8 percent, to 47.71 pesos. The company said 98 percent of its shareholders took the option of receiving their dividend payment in stock rather than cash. ``We consider the high acceptance of the dividend as a favorable element for the company,'' said Carlos Perezalonso, an analyst at Grupo Financiero BBVA-Bancomer SA.

Consorcio ARA SA (ARA* MM), Mexico's largest construction company, slipped 71 centavos, or 3.7 percent, to 18.44 pesos. The shares have gained 19 percent this year.

Grupo Aeroportuario del Sureste (ASURB MM), which manages nine airports in Mexico, including the airport at the Caribbean resort town Cancun, gained 35 centavos, or 2.5 percent, to 14.3 pesos. The company reported passenger traffic in May grew 11.2 percent. Figures for the month of May again look very encouraging,'' said Miguel Machado an analyst at UBS Warburg LLC. Our view is that Asur is on track to a record year, leaving the 9/11 and Iraq war aftermath behind.''

Grupo Televisa SA (TLEVICPO MM), Mexico's largest broadcaster, rose for a sixth day, gaining 28 centavos, or 1.6 percent, to 17.55 pesos. Shares have gained 22 percent this year. Niall Paul, who manages $300 million in Latin American equities at Morley Fund Management in London, said Televisa will be one of the stocks to react most rapidly to a pick-up in Mexico's economy.

TV Azteca SA (TVAZTCPO MM), Mexico's second-largest broadcaster, gained for the fifth day in six, rising 12 centavos, or 3 percent, to 4.12 pesos, bringing this year's rise to 35 percent.

Organizacion Soriana SA (SORIANAB MM), a supermarket chain operator, rose 29 centavos, or 1.4 percent, to 21.7 pesos. Some analysts say low rates may also help boost consumption. ``Lower interest rates should help the credit supply for consumers,'' Jose Alberto Galvan, an analyst at BBVA-Bancomer SA, wrote in a research note.

Argentina

Banco Bansud SA (BSUD AR), rose 6 centavos, or 3.3 percent, to 1.88 pesos, the highest price since April 2000. ``Next week Argentina's Congress may debate on bank compensations,'' said Mariano Tavelli, an analyst at brokerage Tavelli & Cia. Sociedad de Bolsa in Buenos Aires. Argentina pledged to offset banks for losses caused after the country forced them to convert all U.S. dollar deposits and loans into pesos at different exchange rates.

Grupo Galicia (GGAL AR), the country's second-largest bank, rose 9 centavos, or 9 percent, to 1.07 peso, heading to its highest price since August 2001. Argentina's Economy Minister said the country may make its first offer on defaulted debt in September. Galicia is the bank with most government bonds.

Transportadora de Gas del Sur SA (TGSU2 AR), which transports and processes natural gas, rose 1 centavo, or 0.6 percent, to 1.64 pesos. Gas companies told Daniel Cameron, Argentina's secretary of Energy, they need a 40 percent increase to avoid shortage this winter, newspaper El Cronista reported. Utilities tariffs have been frozen since Argentina devalued its currency in January 2002.

Colombia

Bavaria SA (BAVAR CB), Colombia's largest brewer, rose 400, or 3 percent, to 13800, as rising beer sales boost prospects for strong earnings.

Cemento Argos SA (ARGOS CB), the largest cement holding, rose 150 pesos, or 1.5 percent, to 10200, as investors bet the first quarter's 3.8 percent economic growth signals greater demand for construction, a trader said.

Corporacion Financiera Suramericana y Nacional SA (CORFINS CB), Colombia's largest financial corporation, surged 175, or 5.9 percent, to 3165. The company's first-quarter net income rose 82 percent to 22.6 billion pesos ($7.7 million) from the same period a year ago.

Cia. Colombiana de Inversiones SA (COLINV CB), Colombia's fifth-biggest holding by assets, rose 70 pesos, or 2.4 percent, to 2050 pesos. The stock price has gained 150 percent in the past 12 months.

Peru

Volcan Cia. Minera SA (VCM/B PE) shares rose 3 centimos, or 9.4 percent, to 35 centimos. The company, Peru's top zinc miner, has said it is allowing due diligence review of its assets and books to a Swiss, a Brazilian and a Peruvian company as it searches for a partner to contribute funds. The company's operations have been unprofitable because of a decline in zinc prices.

Minsur SA (MIN PE), Peru's only tin miner, rose 5 centimos, or 1.2 percent to 4.20 soles. Tin price for three-month delivery rose $10 to $4,720 a metric ton in the London Metal Exchange from yesterday.

By Bradley Brooks The Washington Times-UPI Business Correspondent

RIO DE JANEIRO, Brazil, June 5 (UPI) -- Stocks were generally up across Latin America this week with local news mostly moving markets.

The biggest driver in the short to medium term for Brazil -- the region's biggest economy -- will be the fate of badly needed reforms to the country's pension, tax and legal systems.

Foreign and domestic investors are closely watching whether President Luiz Inacio Lula da Silva has the strength to power the reforms through a dizzying array of parties in Congress.

Leaders from Lula's Workers' Party in the lower house of Congress said Wednesday they had the votes needed to push the pension reform bill through the Chamber of Deputies.

According to Lula's economic team, the pension reform they're proposing would save the country nearly $20 billion over the next 30 years.

The momentum to get reforms through Congress is being aided by the mandate that voters gave Lula in his overwhelming electoral win, and the support they are still sending his way.

On Wednesday, a poll gave the leader a 78 percent personal approval rating, despite his having made little economic headway in his first five months in office.

Optimism is building on the economy as well, with foreign investors being lured back to the country.

On Tuesday, Fitch Ratings upped Brazil's debt to "positive" from "stable."

That is a remarkable transition for a country that six months ago was thought to be heading toward the world's largest sovereign default, a distinction still held by neighboring Argentina.

"The performance of President Lula's administration since taking office on January 1, 2003, has been supportive of sovereign creditworthiness and has eased one of Latin America's most marked political transitions from the center-right to a coalition dominated by the left," Fitch reported in a statement.

Meanwhile, over in Argentina, investors continue to keep tabs on new President Nestor Kirchner, whose economic ideas remain murky at best.

On the corporate front, telecommunications giant Argentina Telecom said Wednesday it will only buy back $290 million of debt, about half of what it wanted to purchase before a debt restructuring plan was frowned on by investors.

On Wednesday, Telecom Argentina's shares dropped 3.8 percent in Buenos Aires.

The company -- majority owned by Telecom Italia and France Telecom -- defaulted on some $3 billion after Argentina's peso was devalued in January 2002.

Some analysts said the paltry buyback may hurt the company's shares in coming days. But others argue investors have priced the poor buyback showing into the company's stock already.

Telecom Argentina was arguably the corporation hurt most when Argentina defaulted on its debt in December 2001, and many investors are watching the company's progress, trying to gauge how the business climate in Argentina might pan out in coming years.

Investors are also keeping a close eye on Telecom Argentina as the government decides if the sector can begin hiking prices.

Telecoms and utilities in Argentina are suffering badly, after the devaluation knocked more than 60 percent off the peso's worth, while the companies are stuck holding debt in dollars.

As for the markets, Brazil's Bovespa stock index ended last Thursday up 0.83 percent at 13,405, its third straight winning session. Investors were generally cheered by chances for having reforms pushed through Congress. Long-distance carrier Embratel rose 6.3 percent.

The index ticked up to 13,422 Friday, wrapping up a May that saw a gain of 7 percent and adding on to the nearly 20-percent rise in the Bovespa since Jan. 1. Analysts say June should be another solid month for investors, with an expected interest-rate cut likely to spark market action.

Monday brought a 1.4 percent loss to 13,229 for the index, with a retreat on Wall Street weighing. Fixed-line phone company Telemar fell 3.4 percent as the government signaled changes in pricing policies for the sector could be upcoming.

The Bovespa rose nearly 1 percent to 13,350 Tuesday. Investors were cheered by a Fitch report raising Brazil's credit rating to positive from stable. Banco do Brasil gained nearly 5 percent.

On Wednesday the index gained 2.76 percent to 13,718. Oil giant Petrobras gained 3 percent after announcing a big oil find. Aircraft maker Embraer rose more than 4 percent, and Telemar added 4.3 percent.

In Mexico, the IPC index fell 0.3 percent to 6,648. Analysts said profit-taking was seen after recent gains. Shipping company TMM fell 15 percent as the outfit faces legal woes and concerns on its debt.

Friday brought a 0.77 percent gain to 6,699 for the index. Investors tracked nice gains on Wall Street. Fixed-line phone company Telmex added 1.7 percent.

The index rose to 6,722 Monday. Broadcaster Televisa gained 1.8 percent, while America Movil, Latin America's biggest wireless company, tacked on 1.6 percent.

On Tuesday the IPC ticked up to 6,739, with blue chips leading the day. Telmex gained 1.27 percent while the country's biggest retailer, Wal-Mart de Mexico, added 0.6 percent.

The IPC rose 2.24 percent Wednesday to 6,890. Industrial group Alfa gained 2 percent, Telmex added 3.5 percent, and America Movil rose 1.76 percent.

In Argentina, the Merval stock index closed Thursday down 0.54 percent at 674.3, as investors took profits. Losses were across the board. Telecom Argentina gained 2.8 percent, though, as investors approved of its efforts on restructuring debt.

On Friday, the index gained to 678.3 as investors were mostly sidelined, playing a wait-and-see with new president Kirchner's economic game plan.

The Merval hit a five-year high Monday, rising 3.6 percent to 702.8. Utilities and banks led the way, with the latter aided by a bill to restructure the sector being sent to Congress by Kirchner. Banco Frances gained 8.4 percent.

Tuesday saw a 0.7 percent gain to 707.8, with banks again leading the way. Banco Bansud gained 4.6 percent, while Grupo Financiero Galicia -- which controls the country's largest private bank -- added 1.1 percent.

The Merval slipped 0.85 percent Wednesday to end at 701.8. Steelmaker Acindar lost 2.85 percent and Telecom Argentina dropped 3.8 percent.

In Chile, the IPSA index gained 0.44 to 1,230 last Thursday, its highest mark this year. Investors were buoyed by the soon-to-be-signed free trade deal with the United States. Fertilizer maker SQM gained 2.1 percent.

Friday brought a flat session with the IPSA gaining 1 point.

On Monday, the index added 0.9 percent to 1,242. General optimism on Chile's economic direction buoyed investors. Retailers did well, with Falabella gaining 8.6 percent and Almacenes Paris tacking on 5.4 percent.

The inevitable profit taking took its toll Tuesday, with the IPSA easing to 1,240. Falabella lost 3.7 percent.

Wednesday saw a gain of 0.56 percent to 1,247 in uneventful trade.

In Venezuela, the IBC index continued to hit historic highs as tight capital controls prompted investors to dump available cash into the stock market.

Last Thursday, the index jumped 6.66 percent to end at 12,301, a new high. Telecom giant CANTV, which makes up 40 percent of the index, rose 8.3 percent.

On Friday, the IBC rose more than 4 percent to close at 12,800. CANTV rose 1.2 percent. The index gained a staggering 48 percent in May alone, as tight restrictions on the buying of dollars sent cash into blue chips.

The market was closed Monday for a holiday. Tuesday brought profit taking a loss of 0.8 percent to 12,692.

The IBC ended Wednesday down 0.6 percent at 12,616, with profit taking again to blame.

<a href=www.voanews.com>VOANews David Gollust State Department 06 Jun 2003, 06:19 UTC

Colin PowellSecretary of State Colin Powell begins a three-day Latin American trip on Sunday. He flies to the Chilean capital, Santiago to attend a meeting of Organization of American States foreign ministers, and he visits Buenos Aires for talks with Argentine officials including newly-inaugurated President Nestor Kirchner.

Officials here insist the Bush administration has not been neglecting Latin America despite its recent focus on Iraq. But they nonetheless say the Powell trip begins an "intensified U.S. focus" on the region that will also include a White House visit later this month by Brazilian President Luiz Inacio Lula de Silva.

Mr. Powell will join fellow hemisphere foreign ministers in Santiago Sunday and Monday for the annual OAS General Assembly. A senior U.S. official said the meeting will have a largely economic focus with a hope that severe recessions in key member countries, including Argentina and Peru, have begun to "bottom out."

But there will also be discussion of the political crises in Venezuela and Haiti, and the ministers are expected to approve a plan for an OAS summit in Mexico in the latter part of the year.

Mr. Powell will stop in Buenos Aires Tuesday to meet Mr. Kirchner, Argentina's new populist President, who was sworn into office only two weeks ago.