VENEZUELA RAISES BARRIERS FOR BOLIVIAN EXPORTS

UNCLAS LA PAZ 000801 SIPDIS SENSITIVE SIPDIS STATE FOR WHA/AND LPETRONI COMMERCE FOR JANGLIN TREASURY FOR SGOOCH E.O. 12958: N/A TAGS: ETRD EINV ECON PREL PGOV BL SUBJECT: VENEZUELA RAISES BARRIERS FOR BOLIVIAN EXPORTS REF: 06 LA PAZ 1172 -------------- SUMMARY -------------- ¶1. (U) The Bolivian Institute of Foreign Trade revealed March 20 that Venezuela had introduced new obstacles for Bolivian exports, after a February 28 decision by the Venezuelan government to import only what Venezuela does not produce or makes in insufficient quantity. The new barriers undermine an April 2006 Peoples' Trade Agreement (reftel) promising to boost bilateral trade and could significantly raise costs for Bolivian exporters. End summary. -------------- VENEZUELA IMPOSES NEW TRADE BARRIERS -------------- ¶2. (U) The Bolivian Institute of Foreign Trade revealed in a March 20 press release that Venezuela had introduced new obstacles for Bolivian exports, following the Venezuelan government's February 28 decision to import only what the country does not produce or makes in insufficient quantity. According to a Venezuelan Food Ministry resolution, Venezuelan importers will have to secure "certificates of non-production or insufficient production" to obtain foreign currency to pay for imports; acquiring the certificates reportedly may take as long as three weeks. ¶3. (U) Institute General Manager Gary Rodriguez told Econoff March 22 that the new barriers undermine an April 2006 Peoples' Trade Agreement (reftel) promising to boost bilateral trade. He accused Venezuelan officials of "systematically ignoring" the pact's trade provisions and highlighted the arrangement's disappointing results, noting that while Bolivian exports to Venezuela in 2006 were 23 percent higher than in the previous year, rising from $159 million to $195 million, they were 21 percent lower than in ¶2004. Rodriguez declared Venezuela's new policy blatantly protectionist and underscored the new requirements' negative implications for Bolivian exporters, who stand to lose as much as $20,000 per day in demurrage fees while awaiting permission to offload their goods in Venezuelan ports. -------------- COMMENT -------------- ¶4. (SBU) Venezuela's move raises questions about its willingness to match words with deeds, as it calls into question promises to help neighbors and undermine Uncle Sam by buying goods exporters are unable to sell in U.S. markets. Many in Bolivia are questioning Venezuela's much-touted commitment to regional solidarity; indeed, the Morales administration has publicly stated that it will insist the Venezuelan ambassador to Bolivia explain the new policy. End comment. GOLDBERG