Colombia Reports

Venezuelan companies loyal to the government of Hugo Chavez say they can produce what the country currently is importing from Colombia, adding fuel to Colombian fears that Venezuela is able to suspend imports in response to Colombian accusations its neighbor is providing weapons to the FARC.

According to the "socialist" companies, Venezuela has the capacity to substitute products like food and textile that now make up a large part of what Colombia exports to its neighbor.

Chavez threatens to suspend trade as retaliation for the Colombian accusation that Venezuelan rocket launchers ended up in hands of the FARC, Colombia's largest leftist insurgency.

Miguel Perez Abad, executive of the Social Front of Venezuelan Companies (FSV), says the companies that are part of the association "have the full capacity to produce the goods and services until now imported," the State-owned Bolivarian Press Agency reported Thursday.

Abad added his association is "committed to the national production and the subtitution of imports."

Venezuela's traditional industrial association Conindustria, an opponent of the Chavez government, warns an import stop will generate more product shortage and increase the inflation in the country.

Venezuelan manufacturers of clothing, footwear, cars and food products use Colombian products and will not easily find a substitute for the Colombian imports, Conindustria chairman Carlso Larrazabal said.

Colombia's Trade Minister admitted Wednesday it would be difficult finding alternative export markets if Venezuelan President Hugo Chavez decides to stick to his decision to suspend trade.

Colombian exporters say the closing of the Venezuelan market would be "fatal" to both the Colombian and the Venezuelan economy. Javier Diaz, chairman of the Colombian association of exporters, said Wednesday earlier import stops are still being felt in the industry.

"The suspended the import of and we haven't recuperated from that, they suspended the import of poultry and we haven't recuperated from that," the chairman told W Radio.

Venezuela and Colombia share US$7.2 billion in annual trade.