January 14, 2004 - 3:15 AM

U.S. economic policies under fire at summit

By Kieran Murray

MONTERREY, Mexico (Reuters) - Latin American leaders have told President George W. Bush "perverse" U.S.-backed
economic policies have failed their nations although they also agreed to fight corruption and terrorism together.

Bush tried at a 34-nation Americas summit in Mexico to win back the support of regional leaders after spending the last two
years focused almost exclusively on Iraq and security.

Although he earned backing for modest anti-corruption measures and the fight against terrorism, he also heard stinging
criticism that rampant free-market policies in the 1990s did nothing to ease poverty and forced countries such as Argentina into
deep crisis.

Brazil's leftist President Luiz Inacio Lula da Silva said the "Washington consensus" that promoted market reforms and
sweeping privatizations in Latin America did not deliver growth and kept millions hungry in shanty towns and rural villages.

"After the 1980s -- the so-called lost decade -- the '90s was a decade of despair," he said, calling for new policies to tackle
poverty directly.

"It was a perverse model that wrongly separated the economic from the social, put stability against growth and separated
responsibility and justice," Lula said. "Economic stability turned its back on social justice."

The Iraq war was widely unpopular in Latin America and countries like Brazil and Argentina have moved to the political left so
U.S.-backed policies are no longer an easy sell.

President Nestor Kirchner of Argentina, which suffered financial collapse two years ago, said past mistakes were being
repeated today and complained he was not getting enough support for his efforts to rebuild the economy and pay off debt.

"We suffer pressures, incomprehension and delays from international organisations which do not appear to understand our
need to grow," he said. "It is unacceptable to insist on recipes that have failed."

TRADE DISPUTES

Bush succeeded at the summit in mending his friendship with Mexican President Vicente Fox, who opposed the Iraq war last
year. Fox publicly backed Bush's new immigration reform plan and the two men were all smiles after their meeting on Monday.

Bush also gave Canada's new Prime Minister Paul Martin a boost on Tuesday by reversing previous policy and announcing
Canadian firms would be allowed to bid for some of the $18.6 billion (10.1 billion pounds) in U.S.-funded reconstruction projects
for Iraq.

Bush urged other leaders at the Summit of the Americas in the Mexican city of Monterrey to embrace market reforms and
greater democracy and to make quick progress on a contentious Americas-wide free trade deal.

"Over the long-term, trade is the most certain path to lasting prosperity," he said. A joint statement at the end of the summit
included a commitment to push ahead with a free trade deal between all the nations, with a combined population of 800 million
people.

It is supposed to be signed before January 2005 but talks are locked over U.S. agricultural subsidies and U.S. proposals for
investment and intellectual property rights rules.

Latin American nations defeated a U.S. proposal that the most corrupt governments in the Americas be barred from regional
meetings. They said it was too vague and some feared Washington would use it to isolate its rivals.

Other anti-corruption proposals were approved, however, including a commitment to deny safe haven to corrupt officials on the
run as well as extradite them to their home countries and help seize their assets.

Cuban President Fidel Castro is barred from these regional summits, although he has been buoyed in recent years by
improved relations with Brazil, Argentina and Venezuela.

Bush again attacked Castro's rule in a speech on Monday night and urged his fellow leaders to push for democracy on the
island, but no one else spoke out against his communist rule.

A 120-year-old dispute between Bolivia and Chile over an arid strip of Pacific coastline flared up at the talks.

Landlocked Bolivia, one of Latin America's poorest countries, pushed a demand that neighbour Chile give it land on the Pacific
Ocean for its natural gas exports.

Bolivia claims a strip of desert some 180 miles (300 km) long on the Pacific Ocean that Chile seized in the 1879 War of the
Pacific.

(Additional reporting by Alistair Bell and Steve Holland)