Economy
An expert in the analysis of economic relations, former Deputy Director-General of the World Trade Organization (WTO), Miguel Rodríguez Mendoza claims that the administration of Venezuela's President Hugo Chávez has failed to attain two of its fundamental goals: an increasingly independent country and Latin American integration.

"Numbers tell us that Venezuela is more and more dependent on oil, the United States and imports. Non-oil exports virtually vanished because the domestic industry is adversely affected by government policies, and the Venezuelan oil is not purchased by the Chinese, the Russians, or the Latin American friends of this government, such as Nicaragua, Bolivia, or Ecuador. Our main buyer is the United States."

While he noted "a praiseworthy Latin American integration and Bolivarian ideal," he regards Chávez's government as a disintegrating agent.

"Traditional schemes are abandoned to invent the Bolivarian Alliance for the Americas (ALBA), which is not an integration mechanism, but one of cooperation with ideologically akin countries, where political support is paid with the supply of Venezuelan oil at preferential prices or special financing facilities."

"Total trade among the ALBA member states is a fraction of the existing one with Colombia, Brazil or Argentina, which are not parties of the alliance. The ALBA is the twilight of an old way of relation among countries."

He delved into the field of integration and recalled, "for Venezuela, handling relations with Colombia within a multilateral framework, such as the Andean Community of Nations (CAN), was always important because of everlasting border tensions, in addition to being our natural market. Well, we left the CAN on the pretext that Colombia was dealing a free trade agreement with the United States, and in this way, US goods would enter Venezuela via Colombia."

Do you think that this allegation is not good?

We can see that Venezuela's imports mainly come from the United States; Colombia sells us USD 6 billion in commodities and we sell them USD 1 billion. This means that such allegation was untrue, for political reasons. And a country that claims to be an integrator fatally wounded the CAN. In addition, there is much opposition in the United States to the treaty with Colombia and it will possibly not come into force.

Did the same happen to the free trade agreement among Venezuela, Colombia and Mexico, known as the Group of Three (G3)?

Absolutely, the same rationale broke this agreement because it has a substantial political component based on the relation with Mexico.

The agenda of the Venezuelan government includes membership of Mercosur. Do you think it will happen soon?

Three years ago, all of a sudden the country was full of placards and there was sort of national holyday for its presumed admission to Mercosur. As a matter of fact, Venezuela had been accepted only as a member in the process of adhesion. Such process continues and probably will not be successfully completed because I think that nowadays, Mercosur does not want Venezuela to enter.

Why? Venezuela has a checkbook of petrodollars to buy products from Argentina, Brazil or Uruguay, which are the Mercosur member states.

Venezuela is already a market for Mercosur member states without the need of being there. Those countries sell Venezuela all that can be bought. Mercosur is not interested in a country which will create it lot of problems.

What inconveniences are you talking about?

Mercosur is based on a free trade agreement. Venezuela does not believe in free trade. Also, Mercosur member states foster an ambitious agreement at the WTO Doha Round because they have a stake in agriculture, and Venezuela wants to pull out of these agreements; it does not want an ambitious end for the Doha Round.

Mercosur reached with Israel a free trade agreement which entered into force last December, and Venezuela broke relations with Israel. In the event of entering, it would have to accept this agreement, because one of the commitments is to accept all the agreements executed by Mercosur with third countries.

Mercosur has an agreement on promotion and protection of reciprocal investments and Venezuela has embarked upon a nationalization policy which affects Mercosur member states. Also, sectors with an intellectual clout in Brazil and Argentina which view Mercosur as a strategic agreement for their relations are against Venezuela's membership because of the rhetoric of President Hugo Chávez.

Is not Brazilian President Luiz Inácio Lula Da Silva influential enough in Brazil so as to make approve Venezuela's entry?

Sure he is, but he uses the Congress objections to keep the status quo. These subtleties of diplomacy should be read.

Do you think that Venezuela is really heading for trade divorce from Colombia?

I think that the economic reality is stronger than the political rhetoric. If we buy cars in Colombia, for instance, it is because they would be more expensive in Argentina. The country is not amidst a boom anymore; it should ponder on the cost of its actions. I think that at the end of the day, nothing will happen; it will be as usual. If it were up to Chávez, relations with Colombia would have ended 10 years ago, because, as a Venezuelan military in his own right, he regards Colombia as an enemy, instead of a partner. But the economy reality has prevailed.
vsalmeron@eluniversal.com

Translated by Conchita Delgado

Víctor Salmerón
EL UNIVERSAL