This is the Cato Daily Podcast for Friday, December 7th, 2007.

I'm Caleb Brown.

A free trade pact between the United States and Peru moves ahead

while Hugo Chavez faces his first political defeat at the hands of a broad swath of Venezuelan voters.

Ian Vasquez, is director of the Cato Institute's Center for Global Liberty and Prosperity.

He says Peru's success serves as an embarrassment

to the failed policies in Venezuela under Hugo Chavez.

The rejection of Chavez's proposed constitutional amendments, which would have given him unprecedented powers in Latin America with the exception of the powers that Fidel Castro has, was a big setback for Chavez and it was a signal to all

Latin Americans that in fact he does not represent or embody the will of the people as he likes to say or their aspirations and this is a very

healthy signal that I think will embolden the a very

Boulden the opposition in other countries like Bolivia and like Ecuador

that are now client states of Venezuela

where they're facing the very same pattern of constituent assembly, rewriting of the Constitution, the violation

continuously by the government of the rule of law and arbitrary rule and this

headlong rush into populist rule. So I think that this has been a setback but as I say

the opposition in Venezuela is still at a tremendous disadvantage since Chavez

has so much control in a country that doesn't have too much in the way of checks and balances or separations of powers and he still does control so much of the economy and so many different branches of government.

The other good news this week was that the Senate passed the free trade agreement with Peru, which comes at a good time because

Peru is increasingly distinguishing itself in the region as a successful case of market democracy.

Unlike so many other countries in South America, Peru maintained, it did not backtrack the fairly deep free market reforms that

had initiated in the early 1990s, and it has maintained stable macroeconomic policy throughout this time and it's

paying off.

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