Venezuela
Shops In Argentina After Colombia
Spat
By Patricia Rondon and Javier Mozzo
CARACAS/BOGOTA (Reuters) -
Venezuelan President Hugo Chavez has turned
to South American allies to replace imports
from Colombia after vowing to reduce trade
with his neighbor over its plan to open
bases to U.S. troops.
Venezuela signed over a billion dollars of
trade deals with Argentina on Tuesday,
buying tractors, meat and rice days after
halting the import of 10,000 vehicles from
Colombia.
"This exchange, which means technology
transfer, is worth $1.1 billion," said
Argentina's President Cristina Fernandez,
who added that trade between the two
countries was just $1.4 billion during the
whole of last year.
Chavez is furious with his Colombian
counterpart President for agreeing to host
more U.S. troops at seven military bases to
fight drug trafficking and has repeatedly
warned that the deal risks war in the
region.
A fierce Washington critic who rarely
follows through on threats, Chavez sees the
move as a direct threat to him and ordered
the revision of all trade agreements with
his second largest trading partner. The two
countries shared $7 billion in commerce last
year.
If he is serious about ending Venezuela's
reliance on Colombian products, especially
food, Chavez must urgently find new trade
partners to avoid politically damaging
shortages.
Petro-state Venezuela struggles to produce
its own food and kinks in supply chains
quickly produce problems, raising prices in
a country that suffered inflation of 31
percent last year.
Chavez has already told Colombia's state oil
company Ecopetrol it is not welcome in the
Orinoco oil region and ended a deal to sell
cheap gasoline across the border.
Colombia, one of the world's top coffee
exporters, will also have smarted when
Venezuela bought 1,500 tonnes of the bean
from Brazil on Monday to offset shortages at
home.
Trade Minister Eduardo Saman said on Tuesday
Venezuela will substitute all imports of
basic materials from Colombia by the end of
the year. Venezuela currently imports 300
million cubic feet of natural gas per day
from its neighbor.
Colombia's government says trade with
Venezuela has already slowed considerably
and analysts predict commerce will fall by a
half this year.
"Venezuela is an important market for
Colombia, but we have to diversify," said
Colombia's Finance Minister Oscar Zuluaga.
"We are still looking for the right channels
to alleviate the effect on trade."
The deals Venezuela signed with Argentina on
Tuesday included the purchase of 80,000
tonnes of beef. Venezuela consumes 600,000
tonnes of beef a year, a third of which came
from Colombia last year with a value of $755
million.
Venezuelan subsidies on many products, an
oil boom and a long shared border have made
the OPEC nation a big growth market for
Colombian exporters in recent years.
Representatives of the 3,000 businesses that
sell to the neighboring country worry they
will struggle to replace their customers
locally.
"The situation is very complicated," said
the president of a Colombian poultry farmers
group. "But it's worse for Venezuela's
citizens and their food security." |
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