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ARGENTINA-URUGUAY | Pulp mill. An accident last week in the controversial pulp mill being built by the Finnish company Botnia in Uruguay escalated the diplomatic conflict between the Argentine and Uruguayan governments over the project's environmental credentials. 
The accident, in which sodium sulphate was spilled into the air under strong wind conditions, led the Argentine government to claim a "toxic cloud" reached its territory. Botnia, however, says that this is "an exaggeration" and that only two of the eleven workers that were exposed to the chemical suffered any adverse reaction, and these were "minor". 
According to the local media the Uruguayan President, Tabaré Vázquez, blasted in a cabinet meeting that if Botnia "does not manage [construction work] properly, [the contract] will be terminated". Operations are scheduled to start next month. The Uruguayan government maintains the mill is environmentally sound based on independent assessments. 

CHILE | Trade with India. The Chilean government sealed to a partial trade agreement with India last week. Over 450 Chilean products will now enter India with a duty reduction of up to 100% from the current average of 29% import tax charged by India. The agreement covers copper, cellulose, wood and salmon among other products. Last year Chile exported US$1.5bn worth of goods to India and imported US$164m. The new trade deal with India follows recent free trade agreements with Japan, China and South Korea.

Against a backdrop of violence which saw at least four dead and 130 injured, on 24 November, delegates from the ruling Movimiento al Socialismo (MAS) pushed a draft of the new constitution through the constituent assembly. Given the obvious incongruity of a democratic charter being approved under military guard, with many regulations flouted and key issues omitted, the opposition has been quick to challenge the legality of the new constitution. It condemned the process of its approval, however, rather than its content.

After attempts to reconvene the assembly in Sucre were repeatedly thwarted by local opposition, the MAS and its supporters moved the assembly into an army-run high school on the outskirts of Sucre in a desperate attempt to produce something before the assembly's mandate runs out on 14 December. Until 24 November, not a single article had been approved.

Ironically, considering the months of fighting between MAS and the opposition over voting procedures in the assembly, the document was eventually approved by 136 of the 138 delegates present, barely the majority of the full constituent assembly of 255 and well below the two-thirds majority (168 votes) needed to approve any draft constitution. Virtually all the delegates were from the MAS, with the remainder having boycotted the assembly in protest. This imbues the constitution with dubious legitimacy.

As well as the lack of opposition and two-thirds majority, other questionable features of the approval procedure include the fact that the new constitution was not read out in its entirety nor printed - suggesting that it was not even clear that the MAS delegates knew what they were voting for. MAS representatives told the daily newspaper, La Razón, that the approved text incorporates articles previously agreed by committees as well as MAS (majority) versions of articles on contentious issues.

However, only 15 of the 21 committee reports were read aloud in the approval session, with chapters on key issues which had proved sticking points - such as the transfer of the capital from La Paz to Sucre - omitted. MAS delegates told La Razón that Sucre would serve as the site of the judicial and electoral powers while the legislative and executive will remain in La Paz, with the issue to be incorporated into the draft when being approved in its entirety.

Other regulations flouted in the approval process include the failure to establish an integration and compatibility committee to coordinate the majority and minority proposals to be included in the draft and reducing time allocated to present motions, reports and debate.

In terms of content, the draft guarantees a plurinational state; state control of the country's resources; access to basic services, presidential re-election and four types of autonomy- departmental, regional, municipal and indigenous - the second model rejected by indigenous groups, the opposition and the federation of municipal associations.

Violence

While the ruling party celebrated the approval of the constitution, with assembly president Silvia Lazarte declaring it an "historic moment", violence broke out outside the school as protesters clashed with police in demonstrations. Four people died and 130 were injured. 

The deaths are the first in the chaotic process of producing the new constitution. The last elected president, Gonzalo Sánchez de Lozada, was ousted shortly after he used force against his opponents in 2003 and Morales has so far used neither the police nor the army to curb his opponents. 

The military did not participate in efforts to control the protests, which could have led to a higher death toll, while the police force formally withdrew from Sucre to Potosi after pro-Sucre protestors destroyed police vehicles and sacked police installations. 

The violence abated after MAS delegates left Sucre but both Morales and the opposition continue to blame each other for it. On 25 November, Morales requested a full investigation into the protests and lamented that the citizens of Sucre had "been totally manipulated by groups that do not want the profound changes the new constitution will bring." Vice-President Álvaro Garcí­a Linera also maintained that the violence constitutes part of a plan not only to destroy the assembly but also to overthrow Morales. 

Response from the opposition

Rather than focus on the contents of the draft of the constitution itself, the opposition has attacked the manner in which it was approved, questioning its legitimacy as a result. The leader of the main opposition party, Podemos, Jorge Quiroga, said it was "worth about as much as used toilet paper." 

Representatives from other opposition parties also criticised the draft for reflecting the vision of only one political party, with Movimiento Nacionalista Revolucionario (MNR) assembly delegate Guillermo Richter arguing that the country's "institutional health" would suffer.

Opposition leaders from the four Media Luna departments of Santa Cruz, Tarija, Beni, Pando, as well as Chuquisaca and Cochabamba called a general strike on 28 November. The strike was well supported and the head of the Santa Cruz civic committee, Branko Marinkovic, announced an indefinite hunger strike for 3 December. 

Future uncertain

According to assembly procedures, the next step is an article-by-article vote by the plenary with a revised draft to be approved by a two-thirds majority. Any article that does not achieve approval by two-thirds will be voted on in a popular referendum, with Bolivians voting between the majority and minority proposals. A second referendum will then be held to approve the entire constitution. 

However, it is unclear whether this will take place. If the opposition continues to refuse to take part in the approval process, each of the 408 articles would have to be voted on in a national referendum which could pose numerous logistic difficulties and further undermine the credibility of the new constitution. 

IDH controversy

Both houses of congress approved the proposal to use profits from the direct hydrocarbon tax (IDH) to provide a new pension plan for senior citizens. The MAS-controlled lower chamber approved the bill on 27 October but the opposition-led senate amended it on 23 November. The senate altered the MAS plan to switch money allocated to the prefects to fund the pension, recommending other sources of finance. However, pro-Morales supporters besieged the legislative building on 27 November preventing opposition senators from entering. In their absence, the government's original scheme was approved.

MEXICO | Mexico's foreign minister visits Cuba. Patricia Espinosa, Mexico's foreign minister, opened her long-awaited two day visit to Cuba on 13 March. It is not yet clear which of the Castro brothers, Fidel or Raúl, she will meet. Raúl took over from his brother as president last month. Espinosa's visit is a tangible sign that relations between Mexico and Cuba, which virtually collapsed under President Vicente Fox (2000 to 2006), are on the mend. Espinosa has meetings with Felipe Pérez Roque, her opposite number, and she is also scheduled to meet Carlos Lage, a vice president, and Ricardo Alarcón, the president of the national assembly. The Mexican ambassador in Havana is talking about President Felipe Calderón Hinojosa visiting Cuba later this year.

MEXICO | PRD elections. The elections for the presidency of the second biggest party in congress, the Partido de la Revolución Democrática (PRD), are on 16 March. There are five candidates but most political commentators believe that the race is between a radical, Alejandro Encinas, and a moderate, Jesús Ortega. Although both sides say that they will respect a victory by the other, there is a major chance of a split in the party if the other wins. Encinas is loyal to Andrés Manuel López Obrador, who still does not believe that he was defeated fairly in the presidential elections in 2006. Ortega represents the wing of the PRD which is prepared to negotiate with the federal government. Coincidentally, the supreme court threw out, by six votes to five, on 11 March, the last injunction calling on the electoral authorities to reopen the 2006 ballot boxes and conduct a fresh count. This decision opens the way to the ballot papers being burnt. The injunction was sought by the editor of Proceso, a leftwing news magazine, under freedom of information legislation.

MEXICO | Inflation. In February inflation was 0.30%, well below January's 0.46%. The 12-month lagging rate was 3.72%.

Some 125 years after the end of the War of the Pacific, Bolivia and Chile signed a framework for defence cooperation which both governments hailed as “historic". The accord, signed by defence ministers Walker San Miguel (Bolivia) and José Goñi (Chile) in La Paz on 16 June, includes, inter alia, knowledge sharing, training in peacekeeping operations and cooperation between national defence industries. Chile also agreed to open the port of Iquique for the free transit of Bolivian goods.

Cooperation at a defence level has improved markedly in the last two years with the top brass from both countries meeting on several occasions. Advances on the defence front have complemented the diplomatic rapprochement based around the 13-point agenda agreed in 2006 by Bolivia's President Evo Morales and his Chilean counterpart Michelle Bachelet, which included Bolivia's claim to a coastline.

The agenda - which also lists other issues such as border integration, freedom of movement, physical integration, economic complementation and water resources (the latter also a thorny problem involving sovereignty) - was discussed by Chile's deputy foreign affairs minister Alberto van Klaveren and his Bolivian peer Hugo Fernández in La Paz. Van Klaveren's announcement that “Iquique is the first Chilean port which opens for the free transit of Bolivian merchandise since 1904" is an important milestone towards fulfilling Bolivia's longstanding claim to a Pacific outlet.

While relations are steadily improving between Bolivia and Chile, with the restoration of diplomatic relations a distinct possibility in the medium-term, relations between Bolivia and Peru - allies in the War of the Pacific - are deteriorating. This is mainly down to the distinct approaches to politics and trade taken by Morales and Peru's President Alan Garcí­a, which have led to sharp differences within the Andean Community (CAN), especially over an association agreement with the European Union (EU). Morales also said he worried about Garcí­a because he was “very fat and not very anti-imperialist". If Peru opposes concession of a Bolivian corridor through what used to be Peruvian territory, it would complicate any eventual deal between Bolivia and Chile.

President Michelle Bachelet finally promulgated convention 169 of the International Labour Organization (ILO) on indigenous rights this week, ending a political debate - fought mainly in congress - which has raged since shortly after Chile's return to democracy in 1990. The convention has been the overriding objective of Chile's indigenous groups, spearheaded by the Mapuche.

The convention underlines the right of indigenous peoples to self-determination, lands, territories and resources, as well as protecting indigenous languages, culture, identity and institutions. It also commits states to provide resources for employment, education, social security and health, in addition to consulting indigenous peoples (and ensuring their participation in) decisions that affect them.

The ratification of the convention comes exactly one year after Chile approved a non-binding UN Declaration on the Rights of Indigenous Peoples [WR-07-37]. The senate approved the convention a full six months ago, but included an “interpretative declaration" that was roundly criticised by the Mapuche. Bachelet dropped this, but indigenous groups are wary and are preparing for the challenge of ensuring that the convention is implemented. The key issue will be how it is interpreted. The convention - in marked contrast to the government, for instance - uses the words “land" and “territories" almost interchangeably.

Another bone of contention will be the issue of Mapuche prisoners. Article nine of the convention stipulates that: “Preference shall be given to methods of punishment other than confinement in prison." Earlier this year, the government came under international pressure to end a long hunger strike by Patricia Troncoso, a non-Mapuche activist halfway through a 10-year sentence for setting fire to a forestry plot. It coincided with serious social unrest in Araucaní­a, the ancestral homeland of the Mapuche in southern Chile, which took on the characteristics of an Intifada, with marches, hunger strikes, fires and road blocks occurring daily.

President Uribe received the US Presidential Medal of Freedom in Washington this week. Only 13 foreign leaders have received this, the highest civilian award in the US, in the last 60 years, and it has been presented to such luminaries as Mother Teresa and Nelson Mandela. The fact that it symbolised the lack of bipartisan agreement on Colombia took some of the lustre off the medal for Uribe. The Democrats, who have opposed a free trade agreement with Colombia for two years out of concern for human rights, could toughen their stance seeing a Republican President, George W Bush, snubbing them. This would complicate Uribe's ties with the incoming Obama administration.

Uribe would win some support from the Democrats if he showed a genuine desire to pursue a negotiated end to Colombia's internal conflict. After receiving his medal, Uribe preferred to place the focus on encouraging desertions in the Fuerzas Armadas Revolucionarias de Colombia (Farc). He offered a “provisional amnesty" for deserters, noting that 3,500 guerrillas deserted last year and anticipating a “big increase" this year. Two guerrillas deserted only this week with two hostages, taken in December, for whom the Farc was demanding sizeable ransoms.

Uribe even extended his offer to the Farc's military chief, Julio Suárez Rojas, or Mono Jojoy. Lest this seem like clemency, it is worth noting that the defence ministry began 2009 by offering rewards of Col$5bn (US$2m) for members of the Farc leadership, or secretariat, and Col$1bn for senior commanders.

The Farc is currently holding out the promise of releasing six political hostages, although its demand that an international guarantor should attend the hand over has delayed the release. Uribe, who is determined to keep the Farc off the international stage, offered the Roman Catholic Church as a mediator. Senator Piedad Córdoba, who has driven efforts to get the hostages released, said the Farc would oppose the idea of the Church as it did not trust it. Interestingly, Córdoba expressed confidence that peace talks between Uribe and the Farc could be set in motion by mid 2009, although Uribe's dismissal of any Farc peace overtures as a “sham" in Washington suggests this might be overoptimistic.

The enormity of the task facing the new government of President Mauricio Funes in relation to El Salvador's relentless security problem was once again exposed last week. The murder rate over the first seven months of the year increased by 37% compared with the same period in 2008, according to new figures released by the attorney general's office (FGR).

The FGR reported that 2,428 murders were committed between January and July this year, representing an average of 12 a day. This sobering tally was then followed up days later with police reports that the number of extortion complaints received in the first half of 2009 totalled 2,150 - a 35% increase on the same period in 2008. The police, nevertheless, placed a positive spin on the figure, arguing that the rise in complaints reflected public confidence in approaching the authorities.

The figures prompted an outspoken response from the private sector, which called on Funes to address the situation. The business lobby was also unexpectedly vocal about a police restructuring, unveiled on 29 July, which saw more than 20 senior officials changed, including the head of the organised crime unit, DECO, Walter Lazo Merino, who was demoted to head operations in the San Marcos municipality, in the department of San Salvador. Groups such as the national association of private enterprise (Anep) and the chamber of commerce and industry (CCIES) have been calling for Lazo's reinstatement.

While expressing surprise at the extent of the reaction provoked by Lazo's replacement, police chief, Carlos Ascencio Girón said the changes were procedural and routine. He also said that the government was implementing a new plan, Batalla por la Paz, which targets the 25 municipalities in the country in which more than 72% of crimes were registered. The plan, which grants more power to mayors, aims to revive and strengthen community police patrols, known as Pipcom, as a means of building trust with local communities. It also establishes municipal violence prevention councils tasked with assessing the extent and nature of the problem afflicting individual communities, and devising an appropriate response.

Only a matter of weeks after tension escalated between Chile and Peru over the Salitre military exercises in Antofogasta, the two countries are again at loggerheads. Peru's President Alan Garcí­a is accusing Chile of spying, an accusation vehemently denied by Chile. The allegations coincide with claims from Caracas that Colombia is spying on Venezuela, Cuba and Ecuador. They also come amid spying allegations at a domestic level in Argentina.

Victor Ariza Mendoza, a Sergeant in Peru's air force, was arrested on espionage charges, specifically passing on state secrets about Peru's planned arms purchases to Chile. According to leaks to the Peruvian press he also handed over names and codes of intelligence agents and photographs of military installations to Chile in exchange for payments of between US$5,000 and US$8,000. The Peruvian government claims he was recruited by Chilean intelligence agents while working at Peru's embassy in Chile in 2002. Ariza was allegedly uncovered after attempting to recruit another non-commissioned officer (NCO).

Garcí­a cut short his visit to Singapore for the Asia-Pacific Economic Cooperation (Apec) summit, which began on 13 November, cancelling the meeting he was due to hold with his Chilean peer Michelle Bachelet on the sidelines of the summit and recalling Peru's ambassador in Santiago for talks. Garcí­a exonerated Bachelet from all blame and instead pointed the finger at “certain sectors" linked to “Pinochetismo" in the Chilean armed forces. Chile's foreign minister, Mariano Fernández, issued a curt riposte: “The Chilean government does not practice spying".

Garcí­a stoked tension further on his return to Lima by calling the alleged spying “a repulsive act". Bachelet departed from her favoured subtle diplomacy to accuse him of “offensive and high-pitched" rhetoric. Garcí­a again responded by saying that Peru had been spied on to discover the secret of its economic growth. Peru's foreign minister, José Antonio Garcí­a Belaúnde, said Peru had sent evidence to Chile and wanted a response. Peru's congress approved a declaration to send to the Organization of American States (OAS) and the Union of South American Nations (Unasur) protesting against the alleged spying.

Peru's charges against Chile come shortly after Venezuela arrested two alleged agents of Colombia's secret police (DAS) on 27 October for spying. The DAS is accusing Venezuela of violating international laws by detaining and keeping incommunicado for the last 50 days another agent, Julio Enrique Tocora. Felipe Muñoz, the head of the DAS, claimed Tocora was the victim of a deception, having visited Maracaibo on a social visit and been apprehended by Venezuelan agents in his hotel. Muñoz admitted that Tocora should never have been in Venezuela in any capacity.

Relations between Colombia and Venezuela are very tense. President Hugo Chávez called for preparations to be made to “defend the holy land of Venezuela" after his Colombian peer Alvaro Uribe announced at the weekend that the Colombian armed forces had captured four members of the Venezuelan national guard when they entered the eastern province of Vichada. General Orlando Mijares, regional commander of the southern Venezuelan state of Amazonas, maintained that the men had been taken in international waters on the River Meta, on which there are shared navigation rights.

The callous murder, apparently by gangsters, of three people connected to the US consulate in Ciudad Juárez, including two US nationals, as they left a children's party where a lot of the guests' parents worked at the consulate, has forced the US government to step up its interest in what is happening on the Mexican side of the border. This interest will come to a head on 23 March when a high-powered team of top US security policymakers, led by Hillary Clinton, the US Secretary of State, visits Mexico to discuss progress on the Iniciativa Mérida, the counter-drugs plan launched by President George W. Bush in October 2007.

Some senior Mexican ministers are very touchy about the increased interest from Washington in how Mexico's security policies are working. The Mexican government's line is that it welcomes US support, but it does not want US advice (certainly not in public nor on operational issues). Even less welcome is US involvement in the war against organised crime. President Felipe Calderón himself alluded to these issues when he visited Ciudad Juárez for the third time this year on 16 March and admitted that the killing of the two US nationals had complicated matters.

The need for US officials to follow Teddy Roosevelt's favourite West African proverb, “to speak softly but carry a big stick", (especially when dealing with Mexico) is clear from Mexico's jumpy reaction to some blunt comments in a press interview given by Janet Napolitano, the US Secretary of Homeland Security, on 17 March. Napolitano said: “President Calderón of Mexico has been deeply involved [in tackling the violence], even sending in the military into [Ciudad] Juarez. That hasn't helped".

These comments produced a furious response from Napolitano's counterpart in Mexico, the interior minister, Fernando Gómez Mont. He said that she was simply wrong and implied that she did not understand what she was talking about. That is unlikely: as governor of Arizona, before moving to join the administration of President Barack Obama in Washington, Napolitano knew what was going on in Mexico and how Calderón's security policies differed from those of his predecessors.

Gómez Mont called a special news conference on the evening of 17 March to answer Napolitano's comments. He said that he could not let Napolitano's comments pass “uncorrected". He said that they were “wrong, [in implying] that the role played by the armed forces in Ciudad Juárez was insubstantial or inefficient; it [the role played by the army] has been very important." Gómez Mont's point was that the army had been filling in while a new police force was trained and equipped.

Gómez Mont tried to sugar his criticism by implying that Napolitano was put on the spot during an interview. He said that he “did not want to launch a crusade", but her comments had to be corrected. Almost in passing, Gómez Mont argued that the US had to change some of its policies on drugs, the ease with which guns can be bought and the system of expelling back to Mexico migrants who faced criminal charges in the US.

The big test of Roosevelt's dictum will come on 23 March when Hillary Clinton, accompanied by Napolitano and her deputy, John Brennan; the Director of National Intelligence, Dennis Blair; the chairman of the joint chiefs of staff, Admiral Michael Mullen; and the head of the Drug Enforcement Administration (DEA), Michele Leonhart, all travel to Mexico to discuss the progress of the Iniciativa Mérida with their Mexican counterparts. Initially the State Department said that Robert Gates, the Defense Secretary, would also be in the US party, but his participation has not been confirmed.

President Calderón was quick to see the implications of the murders of the three people with links to the US Consulate in Ciudad Juárez. The killings drew immediate condemnation from President Obama and triggered a telephone call from Clinton to her Mexican counterpart, Patricia Espinosa, on 15 March. Calderón's response was to travel, for the third time this year, to Ciudad Juárez. He was accompanied by Espinosa and the US ambassador, Carlos Pascual, who visited the US consulate. 

Calderón said that the triple murder had “complicated perceptions" about what was happening in Ciudad Juárez. The government's problem, as he admitted, is that the violence in Ciudad Juárez and in most Mexican states on the US border is accelerating. Calderón said that the triple assassination in Ciudad Juárez had added an international dimension to what was happening and this was “complicating things even more".

The president admitted that things were not going well in Ciudad Juárez. This, as local commentators noted, was a change from the government's usual emphasis on the fact that Mexico has one of the lowest homicide rates in the region, at 11 per 100,000. In Ciudad Juárez, however, it is 175 per 100,000, one of the highest in the world. Calderón also warned his audience of police and army officers, now working together in his rebranded “Todos Somos Juárez" (which emphasised social and development projects) that things may get worse before they get better, although he simultaneously claimed that the homicide rate in Ciudad Juárez had peaked in December 2009 and was lower in January and February.

What is not clear is whether Calderón was speaking relatively or absolutely. The murder rate in the state of Sinaloa this year has surged past that of Chihuhua, home to Ciudad Juárez. Even so, more people are actually being killed in Chihuahua this year than in 2009. According to El Universal, a Mexico City newspaper, in the first 74 days of 2010, 2,049 people have been murdered by gangsters in Mexico. The rate of killing is about a third faster than for 2009 and five times as fast as in 2006, the year before Calderón launched his offensive against organised crime and deployed the army.

Unanswered questions about Ciudad Juárez killings
The killing of the three people connected to the US consulate in Ciudad Juárez has puzzled detectives and commentators. The initial assumption by Mexican investigators that the killings were coordinated is now being questioned. The US Federal Bureau of Investigation (FBI) issued a statement on 16 March saying that there was no evidence that the victims were specifically targeted. How the FBI reached this conclusion is unclear because the US ambassador, Carlos Pascual, denied claims by the Chihuahua authorities that FBI agents have been involved in the investigation.

The two US nationals killed were: Lesley Ann Enrí­quez Catton, who worked for the consulate, and her husband Arthur H. Redelf, who worked on the US side of the border for the El Paso sheriff's office. They were killed after being chased by another vehicle as they drove away from the party. Their seven-month old daughter who was in the car with them was uninjured; Enrí­quez was also four months pregnant. The other parent killed on leaving the party was Jorge Alberto Salcido Ceniceros (whose wife worked in the US consulate). He was a retired Ciudad Juárez policeman; two of his children were wounded in the attack.
What is not clear is why a gang would attack US targets in Mexico, almost certainly prompting greater US involvement. If Redelf was the prime target, because of his law enforcement role, the gangsters would have attracted less attention (and reaction) by killing him across the border in the US.

• Ciudad Juárez
  On 11 March Raúl Plascencia, president of the Comisión Nacional de Derechos Humanos (CNDH), said that the government's offensive against drug-trafficking gangs had failed in Ciudad Juárez. Around 500 people have been killed in the city so far this year. Plascencia argued that the government should shift away from its strategy of meeting force with force and instead focus on building up its intelligence operations.

Argentina has surpassed its target of 60% adhesion to its US$18.3bn debt swap. Some 66% of the 180,000 so-called “holdouts", who have defaulted Argentine bonds, last week accepted a long-delayed new offer from Buenos Aires, the economy minister, Amado Boudou, revealed. Boudou expressed his confidence that the offer's comparative success would enable Argentina to repair its image and once again borrow on international capital markets. In reality Argentina still has some little way to go before shedding its pariah status in order to be able to borrow at less punitive rates.

The government offered more or less the same deal as in 2005 to the 25% of remaining “holdouts", reducing the nominal value of the US$18.3bn of debt by two-thirds. Boudou said that together with the 2005 restructuring, some 92% of the US$102bn the country defaulted on during the 2001-2002 economic crisis had now been settled. He said that this was absolutely the final offer (although it should be noted that the same was said in 2005).

“The global acceptance rate allows us to think optimistically about the possibility of finally closing this chapter of Argentina's history," Boudou said. He confidently predicted that the debt swap meant that “embargos on our country will cease, relations with international markets will start to normalise and more credit will become available." President Cristina Fernández was, if anything, even more upbeat than Boudou. “This is a very important step that gets rid of what has been the most severe restriction on the Argentine economy in recent decades," she said in a televised speech.

This is overoptimistic. For a start, the final holdouts still own about US$6bn of the initial debt, and they are intent on resorting to lawsuits to block any international bond sales by the Argentine government. Then there is the US$7.5bn, between capital and interest, which Argentina owes the Paris Club of wealthy creditor nations.

Fernández announced that Argentina would repay the Paris Club in September 2008 out of central bank reserves, but a combination of the global financial crisis and her government's refusal to accept Paris Club rules, under which a debt restructuring plan requires signing up to an IMF programme (a bitter pill the Argentine government could not bring itself to swallow), thwarted any progress. Boudou said Argentina was still intent on repaying the Paris Club but that it would not accept the IMF “imposing conditions". As long as this impasse remains, Argentine companies cannot win subsidised financing from export agencies of member countries of the Paris Club, which prohibits business in a country where the bilateral debt is in default.

It was widely assumed by the press and commentators that the timing of the debt swap was designed to enable the government to issue debt to fund public spending in the run-up to presidential elections in 2011 to propel the likely electoral challenge of Fernández's husband and predecessor, Néstor Kirchner. But, the European debt crisis, and its impact on markets, put paid to this.

Lack of credit in recent years forced the government to swoop on the private pension funds, and borrow money from Venezuela (at hefty interest rates), but when that source dried up it sought to get hold of central bank reserves by bypassing congress. This led to a long and unedifying power struggle with congress earlier this year from which the government won a Pyrrhic victory: the very markets the government had tried to reassure through the debt swap were treated to an institutional crisis that damaged Argentina's image.

• G-20

President Cristina Fernández told the G-20 summit in Canada at the weekend that the international community should not “let go of the hands of any country". She said that in 2001 “Argentina was cut off" for which she blamed the IMF principally. She compared Argentina's problems then with those of Greece now. She recently claimed that the European Union and IMF bailout of Greece would fail because it repeats prescriptions of enforced austerity which would have “terrible consequences" on the real economy.

MEXICO | Pemex. The big issue for the economy is what will happen at the state oil monopoly Petróleos Mexicanos (Pemex). The company has recently stabilised its production of crude oil, but oil analysts doubt that this situation will endure. Pemex disagrees: its director general Juan José Suárez Coppel, recently argued that three new small discoveries, Ayatsil, Texel and Xux-Tsimin, will keep overall output stable as Cantarell's rate of decline increases. The government has yet to send legislation to congress to show the production-sharing terms Pemex can offer foreign firms for their expertise in developing the country's deepwater offshore fields. Pemex's parlous cash position means that it cannot afford to hire experts for cash.

Radicals and moderates are engaged in a fierce tug of war within the ruling left-wing Frente Amplio (FA). Almost one year after he took office, President José Mujica faces the threat of a rift in the FA: the radical wing of the coalition is demanding that Uruguay's strong economic growth result in greater redistribution of wealth; moderates, including Mujica, argue that Uruguay risks missing out on a once in a lifetime chance to push towards developed nation status over the next five years if, as the radicals propose, it changes the rules of the game by increasing taxes on foreign investors.

One of the main successes of Mujica's predecessor, Tabaré Vázquez (2005-2010), was averting a rift in the FA successfully. It is perhaps a sign of the severity of the current infighting over economic and social policy that Vázquez has re-emerged to call for the need to “fight tooth and nail for unity" within the FA and to announce his intention to run for president in 2015; and that the government, far from being put out by his premature declaration, has welcomed it.

In the wake of widespread protests by trade unions at the tail end of last year over salaries, the country's main trade union - Plenario Intersindical de Trabajadores-Convención Nacional de Trabajadores (PIT-CNT)-, the Partido Comunista (PC) and Mujica's own Movimiento de Participación Popular (MPP) are pushing for a major tax reform to enable the government to redistribute wealth. The PIT-CNT and the PC want to scrap the government's promised reduction of two percentage points to value added tax and use the US$260m this is worth to subsidise poor families, along the lines of the Bolsa Famí­lia in Brazil. Vice-President Danilo Astori denounced this as “tax opportunism", ostensibly to improve redistribution of wealth, but really with one eye on strengthening the party's support base after the setback in last May's municipal elections.

The PIT-CNT and the PC also want to increase taxes on agroexporters, and the free trade zone at Nueva Palmira, and reduce the fiscal benefits of foreign investors. The MPP wants to increase the tax on economic activity (Irae) from 25% to 30% for bigger companies. Astori's heir at the economy ministry, Fernando Lorenzo, insists that the government is “not about to change the rules of the game", especially when the last tax reform is only three years old. Mujica argues that the extreme Left's thirst for conflict is “an age-old illness" that always benefits “the worst Right" [WR-10-50]. He said Uruguay had “an unprecedented historical opportunity, at least over the last 50 or 60 years ... if the current rhythm of investment, growth and development is maintained ... to reach per capita income of US$20,000 by the end of this government (in 2015)," but only by “not throttling the goose that laid the golden egg, which is investment".

• UN peacekeeping

Uruguay is evaluating a reduction “in the short or medium term" of its soldiers in UN peacekeeping operations, especially in Haiti and the Democratic Republic of Congo, the defence minister, Luis Rosadilla, announced. Rosadilla said Uruguay aimed to pull the navy from the UN mission in the Congo (Monusco) by March-April 2012: Uruguay has 1,300 army, navy and air force members in Monusco. Uruguay is the tenth largest contributor to UN peacekeeping operations in the world and has 2,500 troops deployed abroad, but scaling back its contribution is part of a broader move to downsize the armed forces.

ARGENTINA | Repression or tolerance for `piqueteros'? Argentina is caught in a major political debate over the attitude to be taken towards the piqueteros, the widespread movement that has grown from spontaneous protests by the unemployed and whose trademark method is the blocking of roads and highways. The government of President Néstor Kirchner has openly favoured `dialogue' (while seeking to drive a wedge between the more amenable and the more intransigent groups of piqueteros). The clamour for a tougher line has been taken up by many politicians, including Kirchner's electoral patron, former President Eduardo Duhalde.

Duhalde seems to have had his ear closer to the ground. A survey conducted in early December by the consulting firm OPSM shows 87.4% of respondents opposed to the piquetero practice of obstructing the highways, up from 61.2% only four weeks earlier. As many as 62.1% believe that this kind of protest endangers the democratic system. More politically significant, perhaps, is the fact that the proportion declaring support for the motives of the piqueteros has fallen from 73.9% at the beginning of the year to 56.2% now — and there is growing scepticism about those motives, with only 23.7% accepting their stated motive of unemployment and 14.1% citing poverty. On the other hand, 20.7% see political aims behind the protests, 15.4% see them as provoked by groups of activists, and 10.1% cite corruption. The scepticism has been growing rapidly: four weeks earlier, fewer than 1% cited either activist groups or corruption.

PARAGUAY | Threats follow police shake-up. Threats have been issued against the commandant of Paraguay's national police, Humberto Núñez, after the inauguration of the force's new department of internal affairs, considered a key piece of the anticorruption drive launched by interior minister Orlando Fiorotto. Núñez says he has no doubts that the threats have come from within police ranks.

Fiorotto's campaign began in November when one group of policemen were charged with abuse of authority and robbery after preying on exchange operators, and an entire brigade was dismantled after evidence emerged linking it with gangs of car thieves. The minister plans to transform the auto theft section into an independent unit staffed with `the best values' of the force. He also intends to beef up and modernise the antikidnap department.

PARAGUAY | `Farc advising kidnappers.' Colombia's Farc guerrillas are providing advice to Paraguayan kidnappers who specialise in targeting businessmen, according to state prosecutor Oscar Germán La Torre, who travelled to Bogotá in December to follow a trail of evidence. He is also seeking advice from Colombian chief prosecutor Luis Camilo Osorio on how to deal with the problem, which he describes as the beginnings of `a Mercosur of kidnapping', in an allusion to the international reach of the abduction business.

CHILE | Major crimes rate still rising. The debate in Chile is over: high crime-rate figures earlier in the year [SSR-03-03] were not a fluke. The number of reported major crimes in the third quarter of the year was 19.5% higher than a year earlier; reported armed robbery was up 26.2%. The only comfort interior ministry officials have been able to find is that the rates of increase have slowed down.

This casts doubt on the effectiveness of several anticrime initiatives launched last year. Also discouraging is the finding of a survey by the Instituto Libertad y Desarrollo that only some 50% of the respondents who had been victims of a crime had reported them to the police. Confidence ratings of the public security agencies were all below 5%; that of the judiciary barely reached 3.2%.

MEXICO-US | Second thoughts about US antigang experience. Mexican law enforcement agencies are having second thoughts about the value of any assistance the US may have to offer in the effort to curb the activities of the street gangs known as maras. Those who have been studying US performance in this field say their peers north of the border are about as new to this phenomenon as they are. This appears to be confirmed in an extensive report published by the Washington Post on 14 August.

It says that the experience of different police forces is both localised and based on criteria that are far from uniform. A police officer in the Washington DC intelligence unit is quoted as saying that 'different jurisdictions use different criteria for identifying gang members. In the law circles throughout the country, everybody has a different definition of a gang member.' In Montgomery, for instance, police say there are about 20 gangs with 500 members; the state's attorney says there are 80 gangs with 2,000 to 3,000 members. Fairfax police say 2,500 gang members are in their county, and DC police estimate a gang membership of 800 to 1,000.The FBI has created a National Gang Intelligence Center and is developing a gang strategy, targeted first at Mara Salvatrucha. However, the report says, these efforts have yet to produce specific tools, such as national or regional databases devoted to gangs, that local law enforcers could use easily.

Awareness of the gang problem as a nationwide one in the US is fairly recent. Since the 1980s they have spread from their original base in Los Angeles to more than 30 states and several Central American nations. The report notes that Mara Salvatrucha (MS-13) members began appearing in Northern Virginia in the early 1990s, along with other Los Angeles-based gangs as 18th Street ('la 18') and South Side Locos. However, it adds that according to police and federal investigators, the local versions of these gangs have not organised their criminal activity as well as their West Coast counterparts: there is little drug dealing and few sustained auto theft or robbery operations. Mostly, the gangs inflict damage on each other, part of a code that requires them to battle any rival. One antigang initiative reported to have achieved positive results is a group called the Mid-Atlantic Regional Gang Investigators Network (Margin), which was formed in 1992 to bring together members of federal, state and local agencies.

More recently, in 2003, in response to a surge of violence connected to Latino gang rivalry that killed four people, Washington DC police and community groups formed a task force, the Gang Intervention Partnership, to track the gangs, share intelligence and intervene in disputes. Police and prosecutors said the unit's success is demonstrable: since late 2003, no killings in the area have been connected to Latino gangs.

MEXICO-US | Vigilantes and anti-vigilantes. The activities of self-appointed civilian border-control organisations like the Project Minuteman has triggered the appearance of rival organisations which claim to represent the interests of the immigrants and declare themselves willing to confront the former with violence. In fact, one violent incident has already been reported in San Diego, when demonstrators clashed with a detachment of Minutemen heading towards the border. In Texas, in early August, members of a Mexican-American group called the Brown Berets (associated back in the 1960s with the Black Panthers) said they intended to confront the Minutemen when they launched their scheduled border patrols in October.

Despite the secrecy re-imposed on talks between the government in Colombia and the guerrillas of the Ejército de Liberación Nacional (ELN) in Havana, optimists see one sign of progress: the two sides are still talking after two months, the longest round yet of the 'exploratory' negotiations. In contrast, the prospect of an ice-breaking 'humanitarian exchange' of prisoners between the government and the Farc guerrillas has all but diminished, following the failure of a manoeuvre by President Alvaro Uribe to force the Farc's hand with the unilateral release of 150 Farc convicts.

The talks in Havana passed the two-month mark on 17 June. When the current sixth round of 'exploratory' negotiations began, Farc negotiator Pablo Beltrán said he would be satisfied if it lasted more than six days - the previous record duration. Secrecy was reimposed on the proceedings after an attempt at greater transparency elicited statements from both sides that almost wrecked the round. 

The two parties appear determined to end the current preliminary phase in the current round, as they are hammering out a “base agreement" for proper peace negotiations. This is expected to cover two main areas: the “creation of an atmosphere for peace" and the “participation of civil society". The former includes the bilateral cessation of hostilities proposed by the ELN and accepted by the government (but still bogged down by practical details). 

Finalisation of the base agreement has been described by negotiators as “more or less close", but both sides say they cannot put a definite date on a negotiation which addresses such weighty issues.

Uribe's manoeuvre
President Alvaro Uribe's attempt to placate the Farc guerrillas by releasing 150 imprisoned fighters appears to have backfired. The Farc leadership refused to accept this as the first move towards the hoped-for 'humanitarian exchange' of prisoners. Indeed, accommodating French president Nicolas Sarkozy's request for the inclusion among those freed of Farc 'diplomat' Rodrigo Granda even failed to give the expected result. The Farc has reiterated its demand for a demilitarised zone to negotiate the exchange, and Uribe has urged the military to capture the Farc leadership and rescue the hostages.

Uribe floated his initiative on 11 May. The idea was to pardon and release 150 guerrillas convicted of offences, short of crimes against humanity, in exchange for their commitment not to take up arms again or engage in criminal activity. A fortnight later he cryptically alluded to “raisons d'etat" which made it necessary to complete the release by 7 June. 

This, he later revealed, had been a request from President Nicolas Sarkozy for the release of Rodrigo Granda, a man who played the role of roving ambassador for the Farc (which earned him the misleading sobriquet of 'Farc's foreign minister'). Uribe said Sarkozy would help argue Colombia's case in the international arena.

Sarkozy's hope had been that Granda's release would help persuade the Farc to start freeing its hostages, among whom is former presidential candidate Ingrid Betancourt, who holds French as well as Colombian citizenship. He was able to persuade Uribe that this would add to the appeal of his broader prisoner release. 

Granda, however, refused to promise that he would not rejoin the Farc upon being freed. When Uribe announced that he would be representing the Farc as “a promoter of peace", Granda said that it would be up to the secretariat of the Farc's general staff to decide what, if any, his role would be. On several occasions Granda aired his wish to travel to the jungle to confer with the Farc leadership, only to desist later saying that 'security was not assured'.

The Farc leadership dismissed Uribe's move as “demagoguery, trickery [and]... a farce" and condemned those pardoned and released as deserters, for agreeing not to return to fight. They later added that among those released the government had included “common criminals" who had never been members of the Farc.

The Farc restated its demand for the demilitarisation of the municipalities of Florida and Pradera, in the southwestern department of Valle del Cauca, as venues for the negotiation of the 'humanitarian' exchange. Granda explained that there is a strategic reason for this: the guerrillas need an assured escape route in case the negotiations break down.

Many analysts concluded that one of Uribe's aims had been to impress the US Congress in the runup to his visit to Washington on 7 June -the deadline he had set in his 'raisons d'etat' announcement. The purpose of this visit was to lobby for prompt ratification of the free-trade agreement signed with the US and against the cuts US legislators have proposed in funding for Plan Colombia (already affected by a freeze on disbursements). If so, it did not work: he returned with empty hands.

President Sarkozy publicly thanked Uribe for his actions and stated that, though he did not expect an immediate release of Ingrid Betancourt, he did want proof of life. Granda took it upon himself to explain that “conditions were not right" to obtain that proof right now. 

Sarkozy also expressed his opposition to any attempt to rescue the hostages by force. In this regard, it was Uribe who provided an indirect answer: on 16 June at a military base in the southern department of Caquetá, he urged the armed forces to 'achieve the capture of the terrorist leaders [and] the freeing of our kidnapped compatriots.'

The following day while talking to a journalist, Farc spokesman Luis Edgar Devia ('Raúl Reyes') dismissed any role in the prisoner exchange for Granda by emphasizing that the Farc had already appointed, long ago, three negotiators: Fabián Ramí­rez, Felipe Rincón and Carlos Antonio Lozada. 

After the Colombian government barred Granda from travelling to any of the neighbouring countries, the freed guerrilla spokesman flew to Cuba on 18 June, on a private trip to undergo medical checkups. The Cuban government had earlier announced that it would be willing to receive Granda, but only if this were requested by both Colombia and the Farc.

With the UN stabilization force Minustah beginning to discuss a pullout date, Haiti is facing a highly risky development in the political arena: the exclusion from the forthcoming senatorial elections of Fanmi Lavalas, the party of exiled former president Jean-Bertrand Aristide. Lavalas followers have already threatened to disrupt the elections if this move is not reversed, and even the US has joined the chorus of international concern over the possible consequences.

The news that Minustah troops may begin to withdraw from Haiti in 2011 was revealed on 4 February in Port-au-Prince by Javiera Blanco, the visiting Chilean undersecretary for the Carabineros (paramilitary police). Two days earlier, Chile's defence minister, José Goñi; Argentina's justice minister, Aní­bal Fernández; the Mexican undersecretary for international affairs at the public security ministry; and the Brazilian ambassador signed an agreement in the Haitian capital to cooperate in the strengthening of Haiti's national police — a sign that the practicalities of the withdrawal are already being addressed.

Minustah currently has 7,009 troops and 2,019 police officers deployed in Haiti, supported by 502 international officials, 1,197 Haitian officials and 205 UN volunteers. The composition of the force is already changing. El Salvador, which has just withdrawn its last soldiers from Iraq, has pledged a contingent of police. The four signatories of the 2 February agreement will be contributing police personnel, apart from providing training and equipment for the Haitian police.

As this transition process begins, an event key to the country's institutional stability has been arousing concern - the delayed senatorial elections. The senate has been functioning with only 18 of its allotted 30 members, as a result of the expiry of 10 mandates, one death and one dismissal. Elections to fill the 12 vacancies have been called for 19 April.

On 6 February, Haiti's provisional electoral council (CEP), announced that it had rejected the registration of 40 aspiring candidates to senatorial seats. Among them were all 16 of the names put forward by Fanmi Lavalas. That same day the US government (no friend of Aristide) issued a communiqué through its embassy in Port-au-Prince saying that 'an election based on exclusion will inevitably undermine the credibility of the elections and even the institutions in Haiti among Haiti's donors and friends.' The Organisation of American States (OAS) followed suit the following day, with the secretary-general, José Miguel Insulza, expressing concern about 'the possibility that an important group of Haitian citizens may not feel represented.'

Insulza's message coincided with a march of hundreds of Lavalas followers from the recently pacified district of Cité Soleil to the central Bel Air quarter of the capital, bearing placards that warned, 'No elections without Fanmi Lavalas'.

The CEP's announcement gave all affected parties only seven days in which to file complaints against their exclusion. CEP officials expressed surprise at the international reaction, arguing that their decision had been 'technical, not emotional'. They argued that Lavalas had submitted two rival lists, and that it had not been possible to determine which was legitimate. One faction had presented a letter from Aristide authorising their aspirants to represent the party, but the other one claimed that it was a forgery. The CEP said authenticity would have to be proven through certification by Haiti's diplomatic representation in South Africa, Aristide's current country of residence — which was unlikely to happen before the deadline for filing objections. It remains to be seen if the CEP heeds the many calls from abroad to reconsider its decision.

The growing list of mayors assassinated this year has led many in the media and in political circles to wonder if these crimes should be attributed not directly to the war between the drug cartels but to political agendas that use the 'narco' war as cover. The federal senate has given the notion enough credence to demand from the government all available information on the existence of 'death squads' with political connections.

On 16 October, Rito Grado Serrano, outgoing mayor of El Porvenir, Chihuahua, became the 12th mayor to be assassinated this year (the sixth to have been killed in the last two months). In his case the purely political angle does not seem to fit: he was an outspoken campaigner against the criminal gangs operating in his district. Moreover, he was only a fortnight away from the end of his mandate, and his killers had pursued him all the way to Ciudad Juárez, where he had fled after receiving death threats.
 
Mayors are undoubtedly on the political and security frontline in the areas most affected by the inter-cartel violence, at the level which is most vulnerable to the classic 'plata o plomo' ('money or lead') option posed by local cartel bosses. Still, in late September the senate's public security committee felt sufficiently worried about the profusion of claims that politically connected 'death squads' were responsible for much of the carnage assigned to the drug wars that they approved a motion to demand from the government whatever information it had been able to collect about this. A month later, the full senate voted to file a formal request for such information from the interior ministry, the federal chief prosecutor's office (PGR) and the state intelligence agency (Cisen).

Speculation about the 'death squads' has been running side by side with the recurring view that the cartels are increasingly resorting to methods usually associated with terrorist organisations. Fuelling this line of thinking was a string of attacks with grenades on 2 October.  All took place in the northern border state of Nuevo León. Three drive-by attacks struck separate targets in the state capital, Monterrey: one against the federal courthouse, which seriously injured a guard; one which claimed no casualties on a highway about 200 metres from the US consulate; and one that damaged two cars parked outside the El Topo prison.

A fourth, apparently indiscriminate attack took place in the central square of Guadalupe, injuring 12 persons. This incident brought back memories of the 2008 grenade attack on people attending Independence Day celebrations in Morelia, Michoacán, which killed eight and injured dozens — which was later proven to have been conducted by Los Zetas. In Guadalupe (as had happened in Morelia) within days 'members of the public' had provided the authorities with the information necessary to locate and arrest four people who confessed to involvement in the attack.

By mid-October, the death toll attributed to the cartel wars by Mexico City daily. El Sol de México had reached 7,302, of which 8.7% were members of the police or military. This figure is already higher than the total for all of 2008 (5,630) and, if the intensity of the violence does not decline, suggests that the total for this year as a whole will be higher than the 9,635 recorded in 2009.

Gas is important in Mexico for two reasons. The first is that the state oil monopoly, Petróleos Mexicanos (Pemex), stopped flaring the stuff off and began capturing it, mostly to re-inject into declining fields to boost output. The second reason gas is important is that dry gas (i.e. gas with no oil) is the only producing part of the hydrocarbons industry that has been even partly opened up to foreign companies.

Mexico had 11.8 trillion cubic feet (tcf) of proven natural gas reserves as of January 2009. According to Pemex, the Southern Region of the country contains the largest share of proven reserves. However, the Northern Region, especially the Burgos Basin, is likely be the center of future reserves growth, as it contains almost 10 times as much probable and possible natural gas reserves as the Southern Region.

In 2007, the country produced 1.98 tcf of natural gas, while consuming 2.4 tcf. Imports came both via pipeline from the US and in the form of Liquefied Natural Gas (LNG).

Mexico's natural gas production has grown in recent years, following steady declines during the late 1990s. Over this period, natural gas consumption has grown steadily, driven mostly by the electricity sector, whose share of total natural gas consumption increased from 16% 1997 to 33% in 2007. Pemex itself is the single largest consumer of natural gas, representing around 40% of domestic consumption in 2007.

Pemex holds a monopoly on natural gas exploration and production in Mexico. The Mexican government opened the downstream natural gas sector to private operators in 1995, though no single company may participate in more than one industry function (transportation, storage, or distribution). It also created the Energy Regulatory Commission (CRE) to monitor the sector.

Mexico's natural gas production is spread throughout the country. Onshore fields in the northern part of the country represented 42% of the country's natural gas production in 2007, while onshore fields in the south contributed 22%, and offshore fields in the Gulf of Campeche represented the remainder. Mexico's natural gas production is evenly split between fields, with both oil and gas and dry gas fields.

Pemex operates over 5,700 miles of natural gas pipelines in Mexico. The company has twelve natural gas processing centers, which produced 400,000 bbl/d of natural gas liquids (NGLs) and 200,000 bbl/d of liquefied petroleum gas (LPG) in 2007. Pemex also operates most of the country's natural gas distribution network, which supplies processed natural gas to consumption centres. The natural gas pipeline network includes 10 active import connections with the US. In 2008, Mexico imported 363.3 billion cubic feet (bn cf) of natural gas from the US, while it also exported 42.9bn cf.

Liquefied Natural Gas
There are two operating LNG terminals in Mexico. Altamira, on the Caribbean coast, is a joint venture between Royal Dutch Shell (50%), Total (25%), and Mitsui (25%). It opened in 2006 and can handle 500m cf/d. The Costa Azul terminal lies on the Pacific coast, near Ensenada. It is operated by Sempra, which began receiving LNG in 2008. The current send-out capacity of the plant is about 1 Bcf/d. A third LNG reception facility is currently under construction at Manzanillo on the Pacific coast.

• The largest suppliers of LNG to Mexico in 2007 were Egypt, Nigeria, and Trinidad and Tobago. Peru is scheduled to join this list when its LNG terminal is completed.

TRADE: The Byrd amendment, which allowed US companies to apply to have competing products from foreign companies subjected to extra tariffs, was outlawed by the World Trade Organization on 31 August. The US provision was named after its proponent, Senator Robert Byrd. His amendment allowed the US companies which denounced their foreign competitors to share in the revenues generated by the tariffs. The WTO decision allows countries that have been affected by the US provision to levy compensating tariffs on the US companies which denounced their companies. The states and organisations which can now do this are: the European Union, Brazil, Canada, Chile, Korea, India, Japan and Mexico.

RUBBER BULLETS: The use by US law enforcement agencies of rubber bullets against migrants has become an issue in Mexico. The Mexican congress said that the use of even non-lethal weapons against Mexican migrants had been banned under a 2001 agreement between the two countries. Congress questioned the interior minister, Santiago Creel, about the use of rubber bullets by US law enforcement officers. Creel said that the agreement he had made with the US neither explicitly nor implicitly allowed US officials to use rubber bullets against undocumented migrants. What the agreement did do, he said, was to limit the use of firearms by the US Border Patrol.

FRUCTOSE: Mexico's maize producers are lobbying to have the discriminatory tax against drinks sweetened with high-fructose corn syrup overturned. This tax, which is part of the Ieps (a list of special taxes on products) taxes soft drinks sweetened with fructose at 20%. Soft drinks sweetened with sugar do not face the tax. The maize growers have approached the Confederación Nacional Campesina to lobby the government and congress over the issue. As the budget for 2005 will go through congress before the end of the year, the fructose issue could flare up. Most budgets have a tax miscellany attached to them. In this miscellany, congress alters a range of taxes. The government originally imposed the Ieps on fructose in 2002 in an effort to protect the hard-pressed domestic sugar industry. Mexican sugar producers say, rightly, that the government bungled their interests when it negotiated Nafta, which came into force in 1994. Mexico has a sugar surplus but it is not allowed to export this to the US, thanks to the power of the US sugar-producers' and corn-syrup lobby. Furthermore, the Mexican negotiators did not take specific steps to exclude US corn syrup from the Mexican sweeteners market. The maize growers claim that dropping the 20% tax on corn syrup sweetened soft drinks will add US$50m to maize producers' incomes each year. What they do not say is whether the gain will go to Mexican producers or their US competitors. Big US agribusiness combines, such as Archer Daniels Midland, are far more efficient producers of high-fructose corn syrup than their Mexican competitors. 

TEXTILES: The US textile industry is lobbying its government to protect it from the ending of quotas on textiles and clothing produced in China. Under a 2001 agreement, the US agreed to end quantitative restrictions on imports of textiles from China. The agreement does allow the US textile industry to ask for tariff protection, if there is a surge in imports from China from 2005, when the quota ends. The US industry wants the government to act before the quota ends. 

DRUGS: Mexico's attorney general. General Rafael Macedo de la Concha, said in mid-August that the US should do more to combat drug consumption. This would mean that fewer shipments would then cross Mexico destined for the US. Macedo said that the US and Mexico were working well in combating the drug trade, but he stressed that the US was too heavy on stopping production and transport rather than addressing the issue of drug consumption in the US.

The Mexican government, and president-elect Felipe Calderón Hinojosa, criticised President George W Bush's approval, on 26 October, of the law to build two walls along 700 miles (1,126km) of the US-Mexican border. The Mexican reaction was outspoken and may have shocked US policymakers.  

President Vicente Fox said that Bush's action was insulting and short-sighted. Fox added that the US decision showed that the US was "perhaps, unable to see the immigration issue was one that involved two countries." President-elect Calderón, who was on a trip to Canada, said that the US had made "a serious mistake." Calderón also endorsed Fox's claim that the new walls were another Berlin Wall.

The walls are politically symbolic. President Bush's signing of the bill was designed to deliver the maximum possible boost to his Republican party for the mid-term elections on 7 November. Republican congressional leaders emphasised that the walls were the product of a "Republican congress". The Republicans are lagging badly in the opinion polls and are in danger of losing their majorities in both houses of congress.

Despite the politicians' rhetoric on both sides of the border, the Mexican foreign ministry's view is that very little of the walls will actually be built. The foreign ministry's background briefing line is that President Bush had to sign the law mandating the walls to give the Republicans a chance in the imminent mid-term elections, but once these elections are out of the way, the project will be quietly dropped. The law does not commit the US administration to providing money for the walls. President Bush signed a separate law allocating money for "Homeland Security" at the beginning of October, but this money may not necessarily go on the walls.  

The Homeland Security budget comes to US$5.4bn. The cost of the walls is budgeted at US$1.2bn. It is almost certain that this US$1.2bn for the walls will not be enough to build all the walls as approved by congress: a 23km border wall in Southern California cost US$138m, or US$9m per 1.5 kilometres. On this basis, the new walls will cost US$7.35bn. There is also considerable doubt among immigration experts that the walls will do much to halt the flow of migrants from Mexico to the US. According to research by the Pew Hispanic Center in Washington, only 55% of the illegal immigrants living in the US crossed the border either on foot or by swimming across the Rí­o Bravo: the other 45% came in legally, usually through an airport, with a visa, but decided to remain in the US when their visa expired.  

The general assumption is that 500,000 Mexicans get into the US successfully each year. On the Pew figures, around 275,000 of them walk, or swim, across the border, while 225,000 fly in. As US airlines are increasing the number and destinations of their flights to Mexico (Delta recently announced that it would fly to 16 more Mexican destinations this winter), it is going to become easier for Mexicans to fly to the US, negating the whole effect of the walls and extra border controls.

Arguably, the walls will actually increase illegal immigration to the US. A lot of those illegal migrants who fly into the US return to Mexico illegally, by walking back across the border because they know that they can return to their new homes in the US the same way. If these migrants feel that they cannot get in and out of the US as easily, they may stay in the US and arrange visas for their relatives to join them in the US. The relatives will also overstay.  

Even before the walls were approved by President Bush, Mexico was considering what further action it could take. On 4 October, the foreign minister, Luis Ernesto Derbez said that his legal advisers were examining the legal options. Mexico is looking particularly at exploiting UN provisions.  

On 23 October, the president of the UN's Human Rights Council (UNHRC), Luis Alfonso de Alba, who also heads the Mexican delegation, said that the walls were "strictly speaking a violation of human rights." He said that Mexico wanted to uphold the human right of free movement of persons. The US is an observer on the UNHRC, which replaced the Human Rights Commission earlier this year.

The walls themselves are not popular in the US, according to US opinion polls. What US voters want, according to the most recent opinion polls on the issue, is more US Border Patrol agents (whose hiring will also come out of the US$5.4bn) and the enforcement of laws to deter US companies from hiring illegal immigrants as workers. Voters in the US are much less interested in criminalising illegal migrants working in the US. Currently the federal US authorities tend not to chase after illegal migrants working the US, despite popular fears among such workers of "La Migra".  

Trade unions: On 17 October a group of Mexican trade unions announced that they were taking legal action against a decision by the state of North Carolina to prohibit free collective bargaining by trade unions on behalf of state employees. The Mexican unions are acting under the provisions of the North American Free Trade Agreement (Nafta). The Frente Auténtico del Trabajo (FAT) which has 400,000 members, said that this was the first time it had used Nafta against a public sector employer in the US. In the past the FAT has used Nafta successfully in labour disputes with private sector employers in the US.  

The United Electrical Workers (UEW), which has 3,000 members employed by the state of North Carolina asked the FAT to get involved in the dispute and to invoke Nafta. The UEW said that Nafta could be invoked because North Carolina did US$6bn worth of trade each year with Mexico.