The revival of trade, the goal of the new Colombian-Venezuela relations

Published by
Peter Kavinsky

Jaime Ortega Carrascal I

Bogotá/Caracas, (EFE).- Colombia’s dynamic commercial relations with Venezuela, a pillar of good neighborliness that have deteriorated in recent years due to political tensions, are gaining momentum again with the opening of the border announced on 26 this month.

Bilateral trade, despite the ups and downs of recent decades, hit a record $7.2 billion in 2008, but deteriorating relations led to a decline in trade performance by more than 90%.

According to the National Administrative Department, in 2013, when President Nicolás Maduro came to power as successor to Hugo Chávez, trade fell to $1,846 million, hitting a low in 2017 when it fell to $116.4 million, and in the past year it amounted to 268.6 million dollars. Statistical Office (DANE) of Colombia.

This reality should begin to change with the full opening of the 2,219-kilometer border, closed to vehicular traffic since August 2015, when Maduro expelled more than 20,000 Colombians from the Venezuelan side under the pretext of an operation against alleged paramilitaries.

This decision was followed on February 23, 2019 by a break in diplomatic and consular relations ordered by Maduro amid tensions with then Colombian President Ivan Duque over his support for Venezuelan opposition leader Juan Guaidó.

Changes with the advent of Peter

A woman transports goods on the Simón Bolivar Bridge (border crossing between Colombia and Venezuela) in Cucuta, Colombia. EFE / Mario Caicedo

However, the arrival of Colombian President Gustavo Petro opened the opportunity not only to restore these ties, starting with the appointment of ambassadors, but also to fully open the border next Monday.

Petro and Maduro stepped on the gas and the Venezuelan president said on September 9 that he calculated that with the opening of the border “we could reach $2,000 million in commercial exchange”, while the Colombian ambassador in Caracas, Armando Benedetti, predicted that it will reach $10 billion over a period he did not specify.

“It’s not like before, everything has changed, how nice it is to have good relations with Colombia and to be able to speak honestly, declare the glorious history that saw us born from the sword of the Liberator Simón Bolivar,” said Maduro, recalling the hero of independence. respected by both he and Petro.

As part of this rapprochement, the two countries also agreed that the Maduro government would take control of the Colombian-based petrochemical company Monómeros and a subsidiary of state-owned PDVSA, which has been run by an opposition group led by Guaidó since 2019.

Incomplete tasks

Two women walk past a merchandise stand on the Simón Bolívar Bridge in Cúcuta, Colombia. EFE / Mario Caicedo

Despite the enthusiasm of the parties, experts warn that there is still a long way to go because the hiatus of the last seven years and the Venezuelan crisis have left logistical, immigration, customs, phytosanitary and security issues to be addressed. nature, among other things., so that bilateral trade can resume.

“What is ahead now is the opening of the border, but on the issue of bilateral trade, the legal framework that will regulate it has not yet been determined,” the president of the National Association for Foreign Trade (Analdex) told Efe. Colombia, Javier Diaz Molina.

The leader recalled that Venezuela is no longer part of the Andean Community (CAN), from which it completed its withdrawal in April 2011, and therefore the zero-tariff exchange that previously took place between the two countries no longer exists.

“You have to see what the legal basis is if you are going to work through Aladi (Association for Latin American Integration), whether there will be an addition agreement, a partial volume agreement. This definition needs to be given in order to be clear about what the rules of the stock market game are like,” Diaz explained.

Analdex’s president adds that good intentions are not enough as the economic realities of Venezuela, which has been hit by years of crisis, must be taken into account.

“Venezuela reduced its gross domestic product by 75% from 2013 to 2021, so today’s Venezuela is not the same as in 2008 (…) Today’s Venezuela is a quarter of what it was in 2008,” he said. He speaks. .

Payment Methods

A woman examines goods on the Simon Bolivar Bridge in Cucuta, Colombia. EFE / Mario Caicedo

Diaz explains that the legal basis for the payments also needs to be determined, since Venezuela still owes many Colombian exporters goods purchased more than a decade ago.

Colombian Commerce Minister Germán Umaña recently stated that this $1.3 billion debt now stands at about $300 million and work is underway to repay it on time.

Meanwhile, in Cucuta and other border towns that live off trade, people are eagerly awaiting the normalization of the flow of people and goods between the two countries.

“We hope that the opening is not symbolic, but real (…) it is a reimagining of a relationship that has been broken, but brotherhood and integration are alive,” said Efe (Colfecar), regional director of the Colombian Federation of Road Freight Carriers. , Leonardo Mendes

Web Edition: Juan C. Ochoa

Peter Kavinsky

Peter Kavinsky is the Executive Editor at cablefreetv.org

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