COLOMBIA-VENEZUELA BORDER BLOCKED OVER TOLL DISPUTE

C O N F I D E N T I A L BOGOTA 007225 SIPDIS SIPDIS E.O. 12958: DECL: 10/05/2017 TAGS: ECON ETRD ECIN CO SUBJECT: COLOMBIA-VENEZUELA BORDER BLOCKED OVER TOLL DISPUTE Classified By: Economic Counselor Lawrence Gumbiner for reasons 1.4 B and D. ¶1. (C) SUMMARY: Twice since August, Venezuelan government-supported protesters have closed cross-border traffic at the Colombian city of Cucuta, which depends on USD 10 million a day in trade with Venezuela. The protesters, who object to a new Colombian-imposed toll, turned violent on October 1 with cars torched and dozens hurt. Norte de Santander Governor Luis Morelli blamed Venezuela for the blockade, which he called a "political problem." GOC Minister of Foreign Relations Fernando Araujo and Minister of Transportation Andres Uriel Gallego traveled to Cucuta on October 4. They proposed that the GOC would move the tolls if Venezuela would provide low-priced gasoline and asphalt to support transportation infrastructure projects in Cucuta. END SUMMARY Living on the Edge: the Colombia-Venezuela Border -------------- -------------- ¶2. (U) The economic livelihood of the 900,000 inhabitants of Cucuta, Norte de Santander, is intricately tied to Venezuela. Venezuelan demand, together with improved local security, fueled an export increase of 140 percent in 2007. According to Pedro Sayago, Director of the Cucuta Chamber of Commerce, over 70 percent of Cucuta's exports go to Venezuela, and cross-border trade generates close to USD 10 million per day. Local businessmen told EconOff that easy access to Venezuela is the main reason their factories are located in Cucuta. About 30,000 people and 20,000 vehicles cross between Cucuta and Venezuela every day, with thousands of Colombians working across the border and vice-versa. Border Toll Causes Consternation -------------- ¶3. (U) Three months ago the Colombian national government put toll booths next to two border crossing in Cucuta, making it impossible to cross the border without paying. Fares were set at just over USD 1 for regular cars, and USD 5 for vehicles with more than four wheels. Travelers paid the toll both entering and leaving Colombia. The move surprised residents on both sides of the border. Transport companies and other businesses involved in cross-border trade established a "Bi-National Committee" to protest. ¶4. (C) National Association of Industries (ANDI) Vice President Hernan Puyo told EconOff the GOC set itself up for trouble when it imposed a toll at the Cucuta frontier. He said most in the business community thought the tolls were a mistake, but acknowledged the political difficulty for the GOC in reversing course and removing them. Chamber of Commerce Director Sayago agreed, telling us most Chamber members considered the tolls a bad idea. Still, the Chamber publicly supported the GOC's right to collect the tolls. Protesters Shut the Border Down -------------- ¶5. (C) In August the Bi-National Committee shut the border down for a week. They claimed the toll violated the spirit of a 2005 Border Integration Agreement (although the Agreement has not been entered into and does not mention road tolls). The GOC responded by reducing tolls on all vehicles to USD 1 and applying tolls only to traffic going from Colombia to Venezuela. GOC officials also explained the tolls would cover the costs of 17 transportation infrastructure projects, mainly new bridges and roads in Cucuta, that would improve cross-border travel. The projects are projected to take four years and cost over USD 100 million. Norte de Santander Governor Luis Morelli, who helped negotiate the deal between the GOC and the Committee, told EconOff he had thought this would resolve the situation. ¶6. (U) On September 25 protesters shut the border down again, demanding that the toll booths be eliminated altogether. The Bi-National Committee claimed the GOC could be compensated for the lost revenues with money saved by a preferential low gasoline price from Venezuela and by using lower cost Venezuelan asphalt for the road projects. During the first week of protests hundreds of people, mainly on the Venezuelan side, blocked the border peacefully. ¶7. (C) Things got uglier on October 1 when protesters began burning cars and throwing stones at Colombian police. Five cars were torched and 20 police and eight civilians injured. Still, Colombia's Minister of Transportation, Andres Uriel Gallego, announced that the government would continue imposing the tolls. Governor Morelli told us he felt stuck -- the national government created the toll booths and Venezuela encourages the protesters -- but he has to deal with the fallout. Morelli holds the Venezuelan government responsible; he notes that Venezuela's Vice-President Jorge Rodriguez loudly demands the removal of the tolls and Venezuela continues to let protesters shut the border down. Looking for a Political Solution -------------- ¶8. (C) Chamber of Commerce Director Sayago said moving the toll booths, so that border traffic can avoid them, is the best solution. Governor Morelli told us on October 4 that he opposed simply giving in to the protesters and moving the booths. Morelli pointed out that Cucuta needed the transportation improvement projects and that the GOC had committed to paying the contractor for them. Still, he admitted the issue had become a "political problem." Morelli said a solution would require political involvement and support from both the GOC and Venezuela. 9 (C) On October 4 Morelli brought Minister of Foreign Relations Fernando Araujo and Transport Minister Gallego to Cucuta. After meeting with different groups, the Ministers essentially adopted the Bi-National Committee suggestion. They said the toll booths could be moved if Venezuela helped cover the costs of the transportation projects with preferential low gasoline and asphalt prices. According to Morelli, on October 5 Araujo made the proposal to his Venezuelan counterpart, Minister Nicolas Maduro. Morelli said if Venezuela agreed, then the border could be reopened with days. He added that there was a possibility that President Uribe might come to Cucuta in the next few days. Brownfield