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Development:  On 2 May the Honduran court of appeals voted 2-1 to annul criminal charges (for corruption) against the ousted former president Manuel Zelaya (2006-2009).

Significance:  The secretary general of the Organization of American States (OAS), José Miguel Insulza, yesterday said that the ruling had cleared up Zelaya's "juridical situation", adding that Honduras has now met "the principal requirement" for the OAS to lift its nigh on two-year suspension of the country. The Honduran government hopes to return to the OAS fold in June, at the San Salvador general assembly meeting. Zelaya, who has spent the past year seeking to make political hay in Honduras and beyond out of his legal limbo, will now have to decide carefully his next move, having long refused to return home citing fears of persecution. It's unclear if his former ally, Venezuela's President Hugo Chávez, who latterly joined Colombia's President Juan Manuel Santos in seeking a solution for Zelaya and Honduras, would be inclined to throw in his lot with the newly radicalised Honduran Left now overseen by Zelaya.

Key points:

• Political and criminal charges against Zelaya were issued by the public ministry and the supreme court in July 2009, after the 28 June coup d'état. Congress threw out the political charges over a year ago. The remaining criminal ones were for fraud and falsification of public documents and embezzlement of L$57m (US$2.95m) from the presidency and the Honduran Fund for Social Investment (FHIS). The defence argued that Zelaya was unable to defend himself when the charges were issued, given that he was facing persecution by the interim government that succeeded his administration. The public appointed attorneys for Zelaya argued his right to due process was violated. On 25 March, a supreme court judge had dismissed three outstanding arrest warrants against Zelaya relating to the charges. The public ministry could appeal the ruling, but it's unlikely.

• Zelaya has been living in the Dominican Republic since 27 January 2010.

Development: On 28 April Panama's President Ricardo Martinelli and US President Barack Obama met in Washington.

Significance: As expected, the US-Panama Free Trade Agreement (FTA) proved the focal point of the meeting which saw Obama declare a further pledge of support for the FTA. Inked by both countries in 2007, the FTA has been ratified by Panama but awaits approval by the US. The new Republican-dominated House of Representatives and implementation of a new tax information exchange agreement have provided fresh impetus to the deal. Obama also praised Martinelli's leadership and alluded to the importance of "showcase[ing]… commitments to democracy". This is an important endorsement for Martinelli given recent cracks in the bilateral relations resulting from ‘WikiLeaks'. These had exposed major US reservations about Martinelli's commitment to democracy and to tackling corruption .

Key points:

• The US gave Panama the green light with regard to the FTA on 19 April, following the entry into effect of a bilateral Tax Information Exchange Agreement (TIEA) the previous day. Signed by both countries in November 2010, the TIEA allows the US and Panama to request information on all types of national taxes in civil and criminal matters.

• The US is the most obvious beneficiary of the new FTA, given that almost all of Panama's exports have long entered the US duty-free under various trade preference programmes – for example, under the Caribbean Basin Initiative more than 99% of Panama's agricultural exports enter the US market duty-free.

• Under the FTA, over 87% of US consumer and industrial exports will immediately enter Panama duty-free, with the remaining tariffs to be phased out over a decade. In terms of agricultural products, nearly 56% of current trade will receive immediate duty-free treatment, with most of the remaining tariffs eliminated over 15 years. According to the US trade office, US industrial goods currently face an average tariff of 7% in Panama, with some as high as 81%. US agri-exports face an average tariff of 15%, though some reach 260%.

• Martinelli also used his trip to the US to flag up his alignment with Israel. He attended the annual gala of the American Jewish Committee (AJC), where he received the "Light Unto the Nations award", the highest award presented to "distinguished national leaders". Martinelli's endorsement of Israel bucks the Latin American trend, with most countries having recognized Palestine of late. It has proved controversial domestically, given Panama's traditionally neutral foreign policy.

Development: On 29 April the constitutional chamber of El Salvador's supreme justice court (CSJ)ordered the supreme electoral tribunal (TSE) to cancel the legal status of two of the oldest parties, the centre-right Partido Demócrata Cristiano (PDC) and Partido de Conciliación Nacional (PCN).

Significance: The ruling overturns a contentious legislative decree from 2005 (586) which had allowed the PDC and PCN, which have a total of 12 seats in the 84-seat congress, to remain in existence, even though they failed to win the necessary 3% of the vote in the (last but one) 2004 presidential election. Given that both the PCN and PDC had positioned themselves as right-wing alternatives to the previously ruling Alianza Republicana Nacionalista (Arena,1989-2009) and although the PCN has also been an ally of Arena in the past, the ruling should benefit Arena's main right-wing rival, the Gran Alianza por la Unidad Nacional (Gana), which has 16 seats.

Key points:

• The CSJ's ruling declared unconstitutional Decree 586, which had invoked Article 85 of the constitution, which states that the party system is "pluralist". The court also ruled that that it was unconstitutional to legislate retroactively.

• Civil society groups such as the local NGO Iniciativa Social para la Democracia (ISD) have hailed the court's ruling as a step forward for the democratic political party system.

• The CSJ said that if the PDC, which was formed in 1960, and the PCN, which came into being the following year, are to compete in the 2012 municipal and legislative elections they must collect 50,000 signatures and meet all the necessary requirements imposed on new political parties. Given the tight time frame, they are unlikely to achieve this for the 11 March 2012 election. This will leave just the ruling left-wing Farabundo Martí para la Liberación Nacional (FMLN), Arena, Gana and the moderate left Cambio Democrático to campaign.