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  HOME | Venezuela (Click here for more Venezuela news)

Venezuela Business Leaders See Worse to Come in Trade Clash with Colombia

By Jeremy Morgan
Latin American Herald Tribune staff

CARACAS – Business leaders warned that the full impact of President Hugo Chávez’s trade war against Colombia had yet to be felt, implying that worse was on the way.

The president of the Chamber of Venezuelan-Colombian Economic Integration Chamber, Daniel Montealegre, said that trade was continuing across the border despite Chávez’s orders.

However, he said cross-border trade was falling, and had been in decline before Chávez’s latest confrontation with his Colombian counterpart, Álvaro Uribe. The earlier decline is attributed to a slowdown in the wake of the global recession.

More surprisingly, given the presidential order, Montealegre said customs operations were also functioning normally, too. But, he added, that following the president’s statements, the outlook wasn’t bright, and the consequences would be felt in the medium term.

Caracas has halted the supply of low-cost gasoline to frontier districts on the Colombian side of the border. Bogotá’s response to this was to announce that the Colombian state oil company, Ecopetrol, would ensure supplies in the affected areas.

The impasse with Colombia has spurred the Caracas government into seeking alternative sources to replace imports that used to be made from Colombia. In the most immediately important terms, these primarily consist of food.

Venezuela imports half or more of its needs of food, and of which Colombia has been a key supplier in the past.

During a recent visit by President Cristina Fernández de Kirchner of Argentina, 22 accords were signed on supplies and other forms of “cooperation” and closer “economic integration.” But Venezuelan companies say Argentine business executives who accompanied Fernández de Kirchner drove hard bargains and secured significant concessions on prices, terms of payment and import procedures from the Chávez regime. There were few if any benefits for Venezuelan companies in exchange, they add.

Reports reaching Caracas on Tuesday said that small cattle ranchers in Nicaragua were being paid significantly higher prices for the beef they are to supply to Venezuela. Nicaraguan President Daniel Ortega is a close political ally of Chávez.

The reports came as a first cargo of 800 head of cattle set off from Nicaragua for Venezuela under a deal signed by the Corporación Venezolana Agraria last June.

The aim of this agreement is for Nicaragua to deliver 6,000 head of cattle during the rest of this year. Reports quoted Nicaraguan officials as having said that the ranchers were receiving payment equivalent to $900 a kilo compared with the $400 they would receive in their home market.


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