Can Latin nations build on 2004 gains?

"China leaves mark on Latin America."

"Colombia turns up heat on rebels in its 40-year war."

"Venezuela's Chávez staves off ouster."

These were some of the headlines in the region for 2004, and those same players should dominate the news this year. Here's what we'll be watching:

2004 was a banner year for progress in Colombia's 40-year civil war, a conflict that claims the lives of some 3,000 people each year.

Since taking office in mid-2002, President Alvaro Uribe has extradited nearly 200 suspected drug traffickers to the United States, added tens of thousands of troops and police, and begun demobilizing right-wing paramilitary groups. About 6,600 guerrillas and paramilitary fighters were either killed or demobilized in 2004, more than double the number in 2002. Drug seizures and coca eradication are at all-time highs, and violent crime and kidnappings are down. In November, President Bush promised to push the US Congress to add $900 million a year to the $3.3 billion spent since 2000 by Washington on Plan Colombia, a major antidrug and antiguerrilla program.

With the refunding of Plan Colombia, the country could turn the corner on the drug war in 2005, says Michael Shifter of the InterAmerican Dialogue in Washington. Mr. Uribe's hand was strengthened last year with Colombia's congress amending the constitution to allow him to run again in 2006, and the prospects for a broader peace deal are high - but not guaranteed.

What to watch:

• Accords between the government and the AUC - the coalition of right-wing militias - call for the removal of the AUC's 20,000 paramilitary members from combat by the end of the year. So far, 20 percent have been demobilized, but the AUC says it wants more guarantees, including money and jobs, before disarming further. Negotiations are expected to continue through the year, with a target of 2006 for complete demobilization.

• The National Liberation Army (ELN), the smaller of the country's two leftist guerrilla groups, has indicated it may be willing to talk about a peace agreement. So far, the government has rejected any proposal that doesn't begin with the ELN laying down its weapons.

After a decade in which Latin America struggled with financial crises, all of the region's economies grew in 2004. The average increase was 5.5 percent, the highest in 25 years. It "exceeded the most optimistic forecasts," according to the United Nations Economic Commission for Latin America and the Caribbean (ECLAC).

Thanks to a reduction of red tape in domestic markets, more investment from giants like the US and - increasingly - China, and high commodity prices, growth is expected to continue this year, though more slowly.

What to watch:

• The Free Trade Area of the Americas (FTAA) - a single market stretching from Alaska to Argentina - was supposed to go into effect on Jan. 1, but talks have stalled. A meeting of the hemisphere's biggest economies will take place early this year to try to revive them, though no date has been set. Brazil's foreign minister told the Associated Press that an FTAA "light" could happen in 2006. Meanwhile, the Central America Free Trade Agreement is still to be ratified by the US Congress. Several smaller bilateral trade agreements are sprouting up to fill the vacuum: The US is in negotiations with Peru, Colombia, and Ecuador - and hoping to start talks with Bolivia.

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