Trade between Venezuela and Colombia continues to slowly recover after a diplomatic thaw between the previously bickering neighbors but lingering uncertainty over lapsed preferential tariffs prevents a full return to pre-conflict levels, according to Cavecol, a bilateral trade group.
Trade between the nations totaled $1.04 billion in the first six months of 2011, a 16% jump when compared to the same period a year earlier, according to figures gathered by the Caracas-based Cavecol. On Friday, Colombian Trade Minister Sergio Diaz-Granados said that Venezuela has paid $828 million in the past 12 months of outstanding debts to Colombian airlines and exporters.
But the bilateral trade posted in the first half of this year is still less than half the totals posted during the same period in 2008 and 2009, before relations between the nations began to unravel. In the January through June period in 2008, trade between Venezuela and Colombia totaled $3.2 billion, and in 2009, $2.8 billion, according to Cavecol data.
“There was a major drop in commerce but it didn’t happened overnight and now the recovery is happening at that same speed,” said Luis Alberto Russian, executive president of Cavecol.
Venezuela began racking up the debts with Colombian firms during a drawn-out diplomatic and trade dispute between the neighboring countries that began in mid-2009 and was resolved in late 2010. Venezuelan President Hugo Chavez eventually broke off diplomatic relations in 2010 after then-Colombian President Alvaro Uribe accused Venezuela of sheltering leaders of the Revolutionary Armed Forces of Colombia, or FARC.
The countries moved to restore severed relations last year with the inauguration of present Colombian leader, Juan Manuel Santos. But the political tensions took their toll with Colombia’s trade surplus with Venezuela tumbling from $5 billion in 2008, to $3.5 billion in 2009 and $1.1 billion in 2010. After the U.S., Venezuela has traditionally been the second-most important market for Colombian exporters.
Bilateral trade has staggered back to life because of “the rebuilding of relationships between the two countries, the improved political climate,” Russian said.
A return to pre-crisis levels, however, will not be possible until Venezuela permanently replaces the accords that were voided when the country exited the regional trade group of the Andean Community of Nations, or CAN, Russian said.
“Venezuela should return to CAN and make the changes that it wants from within the framework of the group,” he said.
Venezuela finalized its departure from CAN in April with only temporary trade pacts in place with Colombia and Peru, half of the remaining four member countries.
Chavez said he was withdrawing from the alliance in 2006 to protest decisions by Colombia and Peru to sign free trade agreements with the U.S., saying the organization was “fatally wounded” by the moves.
Venezuela’s trade preferences within CAN — which includes Colombia, Peru, Bolivia and Ecuador — remained active for five years, lapsing earlier this year.