Rumors of an American in Paraguay base raise fears that the United States is there to stay

In June Paraguay's legislature gave the green light to the U.S. military for a series of 13 joint exercises to run through December 2006.

Then the rumors began appearing in the Latin American press: The United States was moving to establish a military base at Mariscal Estigarribia, a town in Paraguay just 124 miles from Bolivia's southeast frontier and within easy striking distance of Bolivian natural gas reserves, the largest in the Americas. Anywhere from 400 to 500 U.S. troops were said to be arriving.

In late July, Brazil reportedly launched military maneuvers along the Paraguayan border, a move seen as an expression of Brazilian discontent with Paraguay. More vocally, Brazil's foreign minister Celso Amorin drew a line in the sand: "Paraguay must understand that the choice is between Mercosur and other possible partners."

Brazil and Argentina lord over Paraguay in the Mercosur trading bloc with a dominant import-export relationship. They don’t want to see their leverage compromised if Paraguay gains preferred access to the U.S. market for its textiles (hinted at recently) and drops out of the Mercosur trade partnership.

But Bolivia has the most to fear from a U.S. military base in Paraguay. With national elections slated for December 5, the Andean nation is expected to become the next Latin American flashpoint. Since October 2003, widespread indigenous peasant uprisings have ousted two presidents. Quechua and Aymara Indians make up the majority of the Bolivian populace, and they’re pressuring the central government to halt the forced eradication of coca cultivation and to nationalize the country's natural gas reserves. Evo Morales, presidential candidate for the Movement Towards Socialism, or MAS party, made a meteoric rise onto the international political stage by supporting these goals, in open defiance of Washington. Considered by many analysts to be the frontrunner, Morales' main competition is former president Jorge Quiroga Ramirez, the preferred candidate of the United States.