Latin America made enormous strides over the past two decades in political development, with all countries but Cuba having regular free and fair elections for head of state. In 2004, free and fairelections for head of government were held in Antigua and Barbuda on March 23; El Salvador onMarch 21; Panama on May 2; the Dominican Republic on May 16; Venezuela on August 15, for aspecial presidential recall referendum; St. Kitts and Nevis on October 25; and Uruguay on October31. Despite this democratic progress, several nations faced considerable challenges that threatenedpolitical stability, including economic decline and rising poverty, violent guerrilla conflicts,autocratic leaders, drug trafficking, and increasing crime. In 2002 and 2003, the region as a whole experienced slower economic growth with 2002 registering a gross domestic product (GDP) decline of 0.6% and a per capita income decline ofalmost 2%, the worst economic performance in almost two decades. Argentina, Uruguay, andVenezuela suffered the deepest recessions, skewing the regional data downward, while most othercountries had slow, but positive, growth rates. For 2003, regional economic growth was estimatedto be 1.5%, with a per capita income increase of 0.2%. By the end of 2004, however, the region had rebounded with an estimated growth rate of 5.5% for the year, surpassing even the most optimistic predictions. Every country in the region, with theexception of Haiti, experienced positive economic growth, and per capita income for the region asa whole increased by an estimated 4% for the year. (1) In South America, the economic downturn in 2002 and 2003 increased political pressure on elected governments and led some in the region to question democracy and the democraticfree-market model of development. The Andean governments of Bolivia and Peru faced violentprotests, which in Bolivia, led to the resignation of President Gonzalo Sanchez de Lozada on October17, 2003, just 15 months after he was elected. Colombia faced challenges from drug traffickingorganizations, as well as from two left-wing guerrilla groups and a rightist paramilitary group, allof which, combined, have been responsible for thousands of deaths each year. Venezuela wasplagued by political polarization between supporters and opponents of President Hugo Chavez,although Chavez's victory in the August 2004 recall referendum has the potential of reducingpolarization. Argentina's democratic political system was under considerable stress after socialprotests over economic conditions led to the resignation of a democratically elected President inDecember 2001. The political and financial situation eventually stabilized, and bold policy movesin the areas of human rights and institutional reform by President NÃ©stor Kirchner, inaugurated inMay 2003, helped restore Argentines' faith in government. In Central America, countries such as El Salvador, Honduras, and Nicaragua emerged from the turbulent 1980s and 1990s with democratic institutions more firmly entrenched, yet violent crimewas rampant. While the 1996 peace accords in Guatemala brought an end to the 36-year civilconflict, the government did not fully implement substantive reforms associated with the peace planand the human rights situation remains poor. A new Guatemalan President, Oscar Berger, waselected in December 2003 and was inaugurated on January 14, 2004. Observers are hoping that hewill improve upon the performance of his predecessor. In the Caribbean, Haitian President Jean-Bertrand Aristide resigned on February 29, 2004, under disputed circumstances after armed opposition groups had taken control of half the country. President Bush deployed U.S. military forces to Haiti to secure key facilities and to help secure thearrival of a Multinational Interim Force, authorized by the U.N. Security Council, which wassucceeded by the United Nations Stabilization Mission in Haiti (MINUSTAH) in June 2004. InCuba, Fidel Castro retained tight control over the Communist government. The human rightssituation deteriorated significantly in 2003, with the arrest and imprisonment of 75 dissidents. Congressional attention to Latin America in the 108th Congress focused on counter-narcotics and counter-terrorism efforts in the Andean region, security cooperation with Latin America, andtrade issues, such as free trade agreements with Chile and Central American countries and theregional Free Trade Area of the Americas (FTAA). Congressional consideration of the annualforeign operations appropriations legislation that funds foreign aid remained an important way forCongress to influence U.S. policy toward the region. Congress maintained an active interest inneighboring Mexico, with a myriad of trade, migration, border and drug trafficking issuesdominating U.S.-Mexico bilateral relations. U.S. counter-narcotics efforts in the region continued to focus on the Administration's Andean Counterdrug Initiative (2) supporting Colombia andits neighbors with foreign assistance in theirstruggle against drug trafficking and drug-financed terrorist groups. Congress expressed repeatedconcerns over the capture and killing of various U.S. citizens by the Revolutionary Armed Forcesof Colombia (FARC) and the National Liberation Army (ELN). Security issues became a higher-profile aspect of U.S. relations with Latin America in the aftermath of the September 11, 2001, terrorists attacks in the United States. Bilateral and regionalcooperation on anti-terrorism issues increased, and the United States expanded its assistance toColombia beyond a strictly counternarcotics focus to also include counterterrorism support. In June2002, the United States and other members of the Organization of American States (OAS) signedan Inter-American Convention Against Terrorism in order to improve regional cooperation. President Bush submitted the convention to the Senate for its advice and consent in November 2002,and the Senate Foreign Relations Committee held a June 17, 2004, hearing on the convention. U.S. officials maintained that the most effective and rapid means to stimulate economic development in Latin America is through trade, and they set the goal of strengthening trade linkageswith the region through the negotiation of numerous free trade agreements (FTAs): On June 6, 2003, the United States and Chile signed a bilateral FTA that had been completed in December 2002. This paved the way for congressional consideration ofimplementing legislation for the Chile FTA, under so-called fast track procedures, with both theHouse and Senate approving the measure in July ( P.L. 108-77 , H.R. 2738 ). In December 2003, the Administration completed negotiations for a U.S.-Central America Free Trade Agreement (CAFTA) with four Central American countries: ElSalvador, Honduras, Guatemala, and Nicaragua; Costa Rica agreed to CAFTA in late January 2004after additional bilateral negotiations with the United States. The United States signed the CAFTAwith the five Central American countries on May 28, 2004. Separately, the United States and theDominican Republic concluded negotiations on a similar FTA on March 15, 2004. On August 5,2004, all seven countries signed the U.S.-Dominican Republic-Central America Free TradeAgreement (DR-CAFTA). In part because of its controversial nature, Congress did not considerimplementing legislation for the agreement before the end of the 108thCongress. The Administration also began FTA negotiations with Panama in late April 2004, and in mid-May 2004 launched FTA negotiations with Colombia, Ecuador, and Peru with thehope that Bolivia will join the U.S.-Andean negotiations in the future. Finally, the Administration continued to negotiate with other hemispheric nations for the establishment of a Free Trade Area of the Americas (FTAA) by January 2005, a goalfirst agreed to at the 1994 Summit of the Americas. Because of differences in the negotiations abouthow to proceed, it became increasingly unlikely that a comprehensive agreement could be achievedby January 2005. In addition to trade policy, the United States supported development in the region through foreign assistance programs largely administered by the U.S. Agency for International Development(USAID). The agency supported such activities as education, poverty reduction, health care,conservation, natural disaster mitigation and reconstruction, counter-narcotics and alternativedevelopment, and HIV/AIDS prevention and education. In addition, the United States provides foodassistance, anti-terrorism assistance, and security assistance. The Peace Corps was active in manyLatin American and Caribbean nations. Overall U.S. foreign aid to the Latin America regionamounted to about $862 million in FY2001, $1.5 billion in FY2002, $1.7 billion in FY2003; and anestimated $1.6 billion in FY2004. For FY2005, the Administration requested about $1.6 billion. (For further information, see CRS Report RL32487 , U.S. Foreign Assistance to Latin America andthe Caribbean.) In the aftermath of several devastating storms in 2004 -- Hurricanes Charley, Frances and Ivan, and Tropical Storm Jeanne -- the United States provided humanitarian assistance to the afflictedcountries, including Haiti, Grenada, Jamaica, the Bahamas, the Dominican Republic, and Cuba. Through October 2004, the United States committed or obligated $22.6 million in such assistance. On October 5, 2004, the House approved H.Con.Res. 496 (Lee) expressing support forthe provision of humanitarian assistance to Caribbean nations devastated by the storms. Subsequently, Congress approved $100 million in emergency supplemental funding for the regionin the aftermath of the storms ( H.R. 4837 , P.L. 108-324 ). (For additional information,see CRS Report RL32160 , Caribbean Region: Issues in U.S. Relations .)