* Prohibitionist drug laws losing favour in Latin America
* Liberal Portuguese model seen as successful
* Cocaine routes into Europe move away from Spain
CADIZ, Spain, Nov 17 (Reuters) - Latin American countries are turning to Europe for lessons on fighting narcotics abuse after souring on the prohibition-style approach of the violent and costly U.S.-led war on drugs.
Until recently, most Latin American countries had zero-tolerance rules on drugs inspired by the United States.
But now countries from Brazil to Guatemala are exploring relaxing penalties for personal use of narcotics, following examples such as Spain and Portugal that have channelled resources to prevention rather than clogging jails.
Latin America is the top world producer of cocaine and marijuana, feeding the huge demand in the United States and Europe. Domestic drug use has risen and drug gang violence has caused carnage for decades from the Mexican-U.S. border to the slums of Brazil.
On Thursday, Uruguay's Congress moved a step closer to putting the state in charge of distributing legal marijuana. On the same day a leftist lawmaker in Mexico presented a bill to legalise production, sale and use of marijuana.
While the Mexican bill is unlikely to pass, it reflects growing debate over how to fight drug use in a country where 60,000 people have died since 2006 in turf battles between drug traffickers and clashes between cartels and security forces.
Even top world cocaine producer Colombia, a stalwart U.S. partner in drug crop eradication campaigns and with one of the toughest anti-drug laws in Latin America, is hinting at change.
Colombian President Juan Manuel Santos said on Thursday it was worth exploring the Portuguese model, one of the most liberal drug policies in the world.
"The experience that you have had with drug consumption policies is very interesting to us. The entire world is looking for new ways to deal with the problem. I hope to learn more and more about the experience you have had," he said on a visit to Lisbon.
Santos stopped in Portugal on his way to the Ibero-American summit in the Spanish city of Cadiz. Leaders there on Saturday called for analysing a shift toward regulating drug use rather than criminalising it.
Portugal decriminalised all drug use in 2001 to combat a serious heroin problem that had caused an outbreak of HIV/Aids among drug users. The shift has been hailed as a success story as consumption levels dropped below the European average.
"The positive evaluation of Portugal's model has taken away the fear in Latin America over reforms," said Martin Jelsma of the Transnational Institute, which advocates the liberalisation of drug laws in Latin America.
Spain - where drug consumption soared in the 1980s after the end of the Franco dictatorship - has tried to fight high cocaine use by emphasizing treatment programmes for addicts and declining to prosecute possession of small amounts of drugs for personal use.
Jelsma said cannabis initiatives such as Uruguay's have built on the experience in Catalonia and the Basque Country, in northern Spain, where the courts tolerate marijuana cultivation for personal use by members of social clubs.
FRUSTRATION OVER FOUR COSTLY DECADES
U.S. elections on Nov. 6, when Colorado and the state of Washington legalized cannabis in defiance of federal laws, sharpened frustration among Latin American leaders.
"While in our countries a peasant is persecuted and jailed for growing half a hectare...in those two U.S. states now you can simply grow industrial amounts of marijuana and sell them with complete liberty. We cannot turn a blind eye to this huge imbalance," Mexican President Felipe Calderon told the Ibero-American summit on Saturday.
Calderon, whose military crackdown on drug cartels set off an orgy of violence in Mexico, expressed fatigue with calling on the United States and Europe to curtail drug use, saying U.S. drug consumers alone fuelled Mexico's drug war to the tune of $20 billion a year.
He said the legalisation of pot in Colorado and Washington marked a paradigm shift.
"We have to ask what alternatives there are. Perhaps less money and less appetite would be generated if there was another way to regulate drugs," he said.
Ibero-American Secretary-General Enrique Iglesias said there was consensus in Latin America that the so-called war on drugs was not working, and called for new approaches to the problem.
Colombia, Peru and Bolivia produce the bulk of the world's cocaine. Mexico and Paraguay are the two biggest marijuana producers in the world, with the latter largely supplying its neighbours Argentina, Brazil and Uruguay.
The shift in Latin America thinking on drugs dates to a 2009 report by the former presidents of Brazil, Colombia and Mexico who said that billions of dollars poured into four decades of U.S.-led crop eradication efforts had merely pushed drug growing from one region to another.
Calderon's speech in Cadiz was just the latest in a growing chorus of challenges to U.S. drug policies.
At a summit of American leaders in April, U.S. President Barack Obama faced vocal doubts from his southern counterparts over anti-drug policies.
Guatemalan President Otto Perez has openly proposed decriminalising certain drugs. Guatemala, Mexico's neighbour to the south, has been torn apart by drug violence and corruption by narcos has deeply penetrated government institutions.
Ten years ago the United States might have reacted with alarm to the shift in Latin America. But Obama's administration has refrained from openly criticising changes in drug laws, partly because U.S. attitudes are also in flux.
NEW ROADS TO EUROPE
Spain was long a gateway for South American cocaine into Europe, although experts suggest cocaine trafficking is now moving through southeastern and eastern Europe, along Balkan routes and into harbours in Latvia and Lithuania.
The European drug monitoring agency EMCDDA said in its annual report cocaine seizures in Europe peaked at 120 tonnes in 2006 and had declined since to 61 tonnes in 2010.
Spain remains the country that reports the highest number of cocaine seizures but they have also fallen there as authorities stepped up policing of the southern coast.
Still, Spain is concerned over the potential for Latin American traffickers to set up European operations on its territory.
In August, Spanish police arrested four members of Mexico's Sinaloa Cartel, one of world's biggest criminal organisations. One of them is a cousin of Joaquin "Shorty" Guzman, the head of the cartel and Mexico's most wanted man.