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Headlines: Chile-EU sign agreement; Lower interest rates forecasted; FAM confirmed in Paraguay; Crucial US mid term elections; Chilean-Argentine military exercises

. Chile-EU sign agreement

Next November 18th in Brussels Chile and the European Union will be signing the bilateral association agreement in coincidence with the meeting of the Fifteen European Foreign Affairs ministers. Chris Patten European Foreign Affairs Commissar will also be present. Following the signature comes the ratification process by the different Parliaments, Chile, European Union and each of the fifteen country members. However as happened with the Mexico-EU following the signature in Brussels most of the agreement will be partially effective. United States and the European Union are Chile's most important trade partners.

Lower interest rates forecasted

United States Gross Domestic Product grew at an annual rate of 3,1% during the third quarter of 2002, following a 1,3% increase in the second quarter according to the latest release from the US Department of Commerce. But experts expected a 3,7% growth in the third quarter, and the latest consumer confidence index showed a significant drop giving a confused picture of the overall functioning of the economy.. The US economy has been growing for the last four consecutive quarters following the 2001 recession. In the last quarter of 2001, growth was 2,7% and in the first quarter of this year 5%. To help stimulate the economy he Federal Reserve is expected to further reduce the basic interest rate, the lowest in forty years, in its coming open market meeting this week. In Europe that is undergoing a slowing down of the economy, the International Monetary Fund, IMF, recommended the EU Central Bank to reduce interest rates in the Euro zone. IMF's Euro zone growth forecast for 2002 was reduced from 0,9% to 0,75% given the current weakness of financial markets and fragility of the international scenario. Similarly IMF's 2003 growth forecast in the twelve Euro zone countries was decreased from 2,3% to 2%. "The current adaptive policy with a clear inclination towards a greater monetary flexibility is appropriate", indicated an IMF report. The report also requests the EU three main countries, Germany, France and Italy, (plus Portugal) to reduce their budget deficits in the coming years.

FAM confirmed in Paraguay

Paraguayan sanitary authorities have decided the elimination of 700 head of cattle in a ranch 400 miles to the northeast of the capital Asunción and close to the state of Matto Grosso in Brazil, after a foot and mouth outbreak was officially admitted. Meantime Argentina and Uruguay reinforced border controls and reiterated the ban on all cattle and meat products imports from Paraguay effective since early October. Argentina additionally declared a sanitary alert in the five provinces that have common borders with Paraguay. However farmers in the five provinces are concerned that cattle prices in Paraguay will fall considerably and become a great temptation for smugglers and rustlers. "It's essential that SENASA staff are given the necessary resources and communications system to ensure they can make a proper job of controlling cattle in the area", said Luciano Miguens, president of Argentina's powerful cattle farmers association. "It would be dramatic to have a resurgence of the epidemics and a criminal action from who ever is involved in the smuggling", added Mr. Miguens recalling how expensive it has been for Argentina to recover from the last outbreak. "If Paraguay keeps to the book and follows instructions they should rapidly have the situation under control", stressed Mr. Miguens. This week sanitary representatives of the four full members of Mercosur plus Chile and Bolivia will be meeting in Rio do Janeiro to co-ordinate joint precautionary measures in the whole region.

Crucial US mid term elections

This Tuesday voters in the United States will decide who controls Congress for the next two years as well as dozens of state governorships, with results affecting President George Bush' hopes of reelection. The whole of the 435 seats in the Lower House, plus 36 governorships and a third of the Senate, 34 seats, are in dispute. In the Senate Republicans need to capture one seat to regain control of the chamber while Democrats need six seats to take over the House of Representatives. But with US public opinion divided almost even 50/50 as two years ago, this mid term election has several very tight races that much will depend on the turnout of voters. In an extraordinary campaign blitz President Bush is visiting 17 states in just five days to turn his popularity into votes for Republican candidates. Normally parties with a president in the White House loose ground in mid term elections but circumstances on this occasion are highly unusual since President Bush enjoys an unusual high popularity particularly since September 11, 2001 and the war on terror. Even with the economy in trouble Republicans could retain control of the House of Representatives but the big battle is in the Senate with eight races nerve breaking. These are: Iowa, Minnesota, New Jersey, New Hampshire, North Carolina, Missouri, South Dakota and Colorado. Among the interesting governors races are Florida with Jeb Bush, the president's brother, having a hard time to be re-elected, and in Maryland Kathleen Kennedy Townsend, daughter of Robert Kennedy running for the main job after eight years as Deputy governor. Both Florida and Maryland have been visited by heavyweights: Bill Clinton, President Bush and Al Gore.

Chilean-Argentine military exercises

Argentine and Chile Army forces participated during two days in a joint community support exercise in response to a natural disaster. The exercise named Araucaria took place in Santiago de Chile from October 28th to 30th. The joint exercise was considered by the Argentine Army as the most significant this year since it was an important confidence building step between the neighboring countries according to the Argentine press. "With 180 years of independence and a common border of 5,000 kilometers Chile and Argentina are an example to the world since they have never been involved in an armed conflict", said the Argentine Army Commander, General Ricardo Brinzoni, present at the exercise. "We've reached a level of trust that was unthinkable of in past years and evidence of this is that Argentine soldiers in the future will be under Chilean command and vice-versa", added General Brinzoni. The exercise was based on the hypotheses of a volcanic catastrophe with joint coordination and cooperation in helping people evacuate urban disaster areas, settling the evacuees, searching for lost persons, sanitary assistance, transport, supplies and the logistics to ensure the live-hood of a massive rescue of civilians. Almost ninety officers and soldiers selected from the Chilean IV Division and the VI Neuquen Mountain Brigade participated. During a brief encounter with the press after the Araucaria exercise was concluded, General Brinzoni announced that fifty Chilean soldiers will be joining the United Nations peace contingent in Cyprus under Argentine command.