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
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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