Concern in Venezuela about Colombian-US FTA
El Universal, Caracas
Concern in Venezuela about Colombian-US FTA
Some think the Free Trade Agreement will help find a niche in the marketplace. Other envisage displacement of domestic commodities. In any case, all of them are in expectation of the new deal
By Eduardo Camel Anderson, El Universal
8 March 2006
Coming into force of the Colombian-US Free Trade Agreement (FTA) has encountered opposing positions in Venezuelan sectors. Three visions prevail -firstly, it is feared that the impact on Colombian-Venezuelan trade will be negative; secondly, there could be a negative impact in the medium term, but a positive one in the short term; last but not least, good prospects are anticipated.
On the one hand, External Trade Vice-Minister Roger Figueroa told Bolivarian News Agency that the FTA could reduce the Colombian-Venezuelan balance of trade and hinder intra-regional commerce. On the other hand, Francisco Mendoza, the speaker of Venezuelan exporters, thinks that exactly the opposite will happen.
Figueroa noted that the Ministry of Light Industries and Trade (Milco) -the body governing his office- has made some sensibility analyses on the impact of a number of goods that will be traded through the FTA. They reckon that some Venezuelan exports to Colombia will be replaced with US goods.
This situation will have an impact on the Andean Community (CAN,) where some issues related to FTA are being discussed, such as intellectual property, drugs and fertilizers.
The senior official emphasized that it will also affect directly producers of Colombia and the Andean Community, because the United States offers great subsidies to local farmers and industrials at the bottom of economy.
However, Mendoza insists on seeing the filled portion of the half glass of water and thinks otherwise. Venezuelan exports could find a new niche in the Colombian-US FTA.
In his opinion, it is probable that Colombia has to deprive the local market from a number of goods in order to meet the US demand.
"This means new markets where Venezuela can replace the missing goods in Colombia," in the context of the benefits shared by member countries to the Andean Community.
Venezuela exports to Colombia 6,000 tariff items. "It would be hardly to define which will be the most benefited sectors. It is too early," Mendoza said.
Criteria
On this latter issue, there is agreement between Figueroa and Mendoza. The Vice-Minister noted that the extent of the treaty cannot be measured thus far, because there are not enough details on the deal made by Colombia.
Peru and Ecuador are also heading for a FTA with the United States with conditions similar to the Colombian agreement.
The government speaker insisted on saying that, despite such situation, Venezuela will remain in the Andean Community.
"Venezuela is the country that has helped most to the implementation of a common external tariff. However, Peru, Ecuador and Colombia have torpedoed these initiatives in order to upgrade the Andean Community and overcome troubles."
Another vision was provided by the Venezuelan-Colombian Chamber of Trade (Cavecol.) President Moisés Bittan commented that while FTA will overhaul the Venezuelan and Colombian productive chains, resulting in a slight replacement of the Venezuelan exportable supply with US goods for 2008, the bilateral trade of balance is expected to grow 15 percent.
As estimated by Cavecol, the supply will stand at about USD 3.7 billion. Out of this total amount, approximately USD 2.4 billion will account for Colombian exports to Venezuela.
Bittan thinks that in the face of integrationist will, the authorities of both nations will be able to find a way to reinforce trade and economic ties.
Translated by Conchita Delgado
