Given the discouraging prospects of the coming trade liberalization negotiations in the framework of the World Trade Organization, Mercosur and the European Union decided in Brussels to resume the interrupted talks. Since 1995 Mercosur and EU have been holding talks to create the world´s largest free trade area with 680 million people which currently has an annual bilateral trade of 40 billion US dollars.

Chilean President Ricardo Lagos announced Sunday a package of measures to soften the impact of the surging price of gasoline which has been forecasted to reach the equivalent of almost $1.40 per litre in the near future. In a national television address President Lagos said that interests generated by the Copper Stabilization Fund, (estimated in several hundreds of million US dollars) will be diverted to help soften future crude increases, anticipated by Chilean authorities because of the devastating effects of hurricane Katrina which destroyed several United States refineries in the Gulf of Mexico area.

The US dollar dipped to a new record low in the Chilean financial market, closing the week in the range of 530 pesos, a benchmark unseen since June 2000. The depreciation of the US dollar is linked to the overall declination of the US currency in world markets which ended this week at its lowest against the Euro since May last year, 1,2541. Similarly the Brazilian Real, which has an important influence in Chile as the region´s largest economy, operated strongly against the US dollar closing at 2,34 Reales, the highest in the last three weeks.

The rise in oil prices to $70 a barrel after Hurricane Katrina swept through the Gulf of Mexico has highlighted the fact that the US refinery industry is unable to handle short-term supply disruptions. The hurricane has shut nine refineries with a combined capacity of 2m barrels per day, or about 12.5 per cent of US refining capacity. It has also shut 1.4m b/d of crude oil production, or about 90 per cent, of the US Gulf of Mexico output, and 88 per cent of the region´s natural gas.

Argentina figures in 2005 among the world´s economies with the highest levels of inflation, 9.6 percent, behind Venezuela with 15.3 percent and Russia, 12.5 percent, according to a report from the Argentine Institute for Social Development, IDESA. “Argentina is the only country where inflation in the last twelve months doubled, from 4.9 percent in 2004 to the current 9.6 percent”, reads the report. However it also points out that Argentina has been through far worse inflation scenarios in the not too distant past: in the seventies inflation multiplied 1,500 times; in the eighties 3.3 million times and in the nineties with the convertibility system the accumulated consumer price index was 56 percent.

Pinnacle Entertainment, Inc. announced last week its initial assessment of the damage caused by Hurricane Katrina, which struck the Gulf Coast area on Monday, August 29. Preliminary reports indicate that no employees or guests were injured at the Company´s Boomtown New Orleans casino in Harvey, La., or at its Casino Magic Biloxi property, which is located in the particularly hard-hit area of Biloxi, Miss.