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Venezuela: Treading the path to isolation

By Veneconomy

02.12.04 | In his determination to keep domestic markets closed and with his adoption of an interventionist, protectionist approach, President Hugo Chávez is isolating Venezuela economically from the rest of the region.

On the other hand, President George W. Bush, who, in his electoral campaign, waived the banner of the FTAA in response to the delay in negotiations on the creation of this Treaty, is moving ahead with bilateral trade agreements with almost all the countries in Latin America, except Venezuela. He has already reached trade agreements with five Central American countries (Costa Rica, El Salvador, Guatemala, Honduras, and Nicaragua) and with the Dominican Republic. In May, he started talks with three of the five Andean Community countries (Colombia, Ecuador, and Peru), and it is expected that Bolivia will join them shortly.

A similar policy of opening up and integration is being implemented by Canada, which has signed agreements with Chile, Central America, the Dominican Republic and the Andean Community of Nations (excluding Venezuela). Increasingly, Venezuela’s traditional trading partners are forging closer ties with one another by means of bilateral treaties and regional groupings. Meanwhile, the Chávez administration not only does not take part in any of these agreements, it tries to hinder them. This is what happened last June at the ordinary annual meeting of the Andean Presidential Council, when President Chávez argued against the advisability of this type of negotiations. However, he failed to convince his colleagues; quite the reverse, the Andean Community ended up authorizing its member countries to go ahead and negotiate agreements with the United States.

Venezuela, apart from its reluctance, is, sadly, no longer even invited to take part in these rounds owing to its inability to meet its obligations under existing treaties, as well as to the chaos of its institutions and the prevailing lack of juridical security and fragility of property rights in the country.

Anyone who is thinking of investing in Latin America will most certainly seek countries that are interconnected with others and that offer larger markets and greater flexibility in terms of trade.

The cost of this closed position in terms of economic growth and well-being for Venezuelans is incalculable. Each company that leaves the country in search of better conditions represents a loss of jobs, and every company that does not set up business here represents jobs that are not created.



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