Humberto Márquez

By Humberto Márquez
CARACAS, Sep 23 2005 (IPS) — Members of the Venezuelan business community are disgruntled over “missing out” on the benefits of the free trade agreement being negotiated between the United States and three other Andean Community countries: Colombia, Ecuador and Peru.

The 12th round of negotiations for the trade pact are taking place this Monday through Friday in Cartagena, Colombia. Bolivia, the fifth member of the Andean Community trade bloc, is attending the talks as an observer, although it will not be a party to the agreement.

Taking part in the upcoming trade agreement “would give our country important competitive advantages, because our products would have freer access to the United States, similar to the access we already have to Bolivia, Colombia and Ecuador,” Marcelo Maldonado, head of the international affairs commission at Consecomercio, told IPS.

As of 2006, the new free trade agreement with the United States will replace the Andean Trade Promotion and Drug Eradication Act (ATPDEA), in force since 2002.

The ATPDEA in turn replaced the Andean Trade Preference Act (ATPA), through which Washington rewarded the efforts of Bolivia, Colombia, Ecuador and Peru to eradicate illegal drug crops over the course of two decades.

Venezuela did not participate in either the ATPDEA or the ATPA, because it is not considered a major producer of drugs or raw materials for their production. Moreover, it did not have the same need for preferential trade treatment as the other Andean Community nations, given its status as a major oil exporter.

The Andean Community nations have an agreement stipulating that whatever is negotiated with the United States must not interfere with the trade bloc’s rules or the interests of the two countries that are not directly taking part in the talks: Bolivia, which has bowed out because of social unrest and internal clashes between different interest groups and sectors, and Venezuela.

“However, this has not consistently been the case,” said a Venezuelan government source from the area of trade relations, who asked to remain anonymous. “The fact is that any negotiation of a free trade agreement entails commitments that impact on the fellow Andean Community members,” he commented to IPS.

With regard to the 12th round of talks now underway in Colombia, “we have only been informed of a few very general aspects, despite the fact that they are discussing highly sensitive issues, like phytosanitary standards for agricultural exports, and exceptions to intellectual property rights, to lower the cost of access to medicines that our people need,” added the source.

The issue of drug patent rights is an ongoing, pressing concern, commented Germán Velásquez, a Colombian delegate at this week’s talks. “We cannot negotiate the opening of markets in a way that works against our citizens’ rights to health,” he said.

Apart from the complexity of the issues under discussion, there is also a time factor involved, because the negotiators need to hammer out a final agreement before the ATPEA runs out in 2006.

What’s more, given the vocal opposition to a free trade pact with the United States from sectors like trade unions and indigenous communities, every effort is being made to ensure that a deal is signed before the elections scheduled in the participating Andean countries that same year.

This sense of urgency demands an extra effort in what is now the final stretch of the negotiations, which Colombian representative Hernando Gómez compared to the Alpe d’Huez portion of the Tour de France bicycle race, the most gruelling uphill segment of the entire competition.

“We still need to get through the toughest part, where those who have run out of steam don’t make it to the top,” said Gómez, stressing that the areas of agriculture and intellectual property are the touchiest, and require careful negotiation.

While its Andean Community partners are immersed in these efforts, Venezuela is watching from afar, “because our government, unfortunately, is not interested in taking advantage of the enormous benefits that would be offered by a free trade agreement with the United States, and is instead promoting the ALBA (Bolivarian Alternative for the Americas), which no one knows anything about,” maintained Maldonado.

ALBA is an initiative launched over a year ago by Venezuela’s leftist President Hugo Chávez as a counterpoint to the Free Trade Area of the Americas (FTAA), known in Spanish by the acronym ALCA.

Efforts to create the FTAA have been driven since the mid-1990s by the United States, with the aim of establishing a hemispheric trade pact that would encompass all of the countries of the Americas except Cuba.

So far, only Venezuela and Cuba have officially adopted ALBA, as an umbrella agreement for the various economic and social cooperation pacts the two countries have signed.

This past August, however, a Caribbean region development fund to be financed by Venezuela was established among the governments of Venezuela, Cuba and 13 other Caribbean nations, and named the ALBA-Caribbean Fund.

“A free trade agreement with the United States would significantly benefit our exports in areas where we have competitive advantages, such as certain manufactured goods, cement or agricultural products. A decade ago, 70 percent of the mangoes eaten in the United States came from Venezuela,” noted Maldonado.

As things stand, over half of the total exports from the Andean region to the United States come from Venezuela, according to U.S. Department of Commerce statistics. But this is due to the large share made up by U.S. imports of Venezuelan oil, which are not covered by trade agreements.

Of the more than 40 billion dollars that the United States spent on imports from Andean Community countries in 2004, 25 billion went to Venezuela, but 22.5 billion corresponded to imports of oil, and another 900 million to aluminium, iron and steel.

Colombia’s exports to the United States, meanwhile, totalled 7.2 billion, half of which were made up of crude oil, along with 400 million dollars worth of coffee and another 400 million in flowers and bulbs, according to the same source.

And of Ecuador’s four billion dollars in exports to the United States last year, three billion involved oil.

Peru’s exports amounted to 3.7 billion dollars, with half of the total made up of minerals, while of Bolivia’s 260 million dollars of exports, minerals accounted for 70 million, and lumber for 30 million.

The current characteristics of Andean Community trade with the United States make it clear why the private sector has such a marked interest in increasing the share of non-traditional exports, particularly from the agribusiness and manufacturing sectors.

The United States “is a highly protectionist country when it comes to agriculture and industry,” observed Maldonado, “and that is why we want negotiations that would open up markets for us.”

“In addition, we agree with the secretary general of the Andean Community, Allan Wagner of Peru, in his support for a partnership with Washington that would help us strengthen democracy, fight crime and take advantage of the opportunities offered by free trade,” he added.