VENEZUELA: LEADER IN REGIONAL ECONOMIC & SECURITY COOPERATION
Since the election of President Hugo Chávez, Venezuela has
taken the lead on strengthening economic and security cooperation in the Latin
American and Caribbean region. From bilateral anti-terrorism pacts with
Colombia to multilateral trade with the Southern Cone countries and regional
energy accords for poor nations, Venezuela exemplifies the “Good Neighbor”
approach to international relations.
VENEZUELA – COLOMBIA PACT: Fighting
Terrorism Together
Venezuela and Colombia are strong partners in the war on
terrorism and the push for freer trade in Latin America. On July 14, Presidents
Chávez and Uribe agreed to build a 120-mile natural gas pipeline from
Venezuela’s Lake Maracaibo to Colombia’s Northeast by 2006. The $200 million
pipeline will allow Venezuela to buy Colombian gas, and eventually, for
Venezuela to sell gas to the American West Coast and Asian Pacific Rim
economies.1
Although the recent agreement focused on natural resources,
both Presidents signaled that it is about more extensive bilateral cooperation
in all areas. While some have made allegations - without evidence – that the
Venezuelan government has supposed relations with terrorists in Colombia,
President Uribe himself applauded the government of Venezuela’s anti-terrorism
efforts, saying that “Venezuela does not accept armed groups, paramilitaries,
guerrillas or drug traffickers in its territory.” Uribe went on to praise the
strong cooperation between the two countries during the recent apprehension of
dozens of suspected
Colombian paramilitaries near Caracas, and a recent
Venezuelan National Guard action against a Colombian guerrilla group that had
kidnapped Venezuelan nationals inside Venezuelan territory.2 The
leaders agreed that Venezuela may be able to play a mediation role in
Colombia’s civil war in the future, as it has in the past under the banner of
the Group of Facilitating Countries, together with Switzerland, Italy and seven
other countries.3 Both heads of state agreed to meet twice more before the
end of the year.
JOINING MERCOSUR: Hemispheric Trade
Integration
Earlier this July, Venezuela was inducted as an associate
member into Mercosur, the Southern Cone free trade area led by Brazil and
Argentina that includes Paraguay and Uruguay, as well as Chile and Bolivia as
associate members. Mexico is also scheduled to become an associate member in
the near future. In a statement, Mercosur countries said they welcomed
Venezuela with “great satisfaction as the newest member of Mercosur.” That
this agreement preceded the scheduled August referendum on President Chávez’s
administration was seen by many analysts as a show of Latin American support
for Venezuela’s regional leadership.4
As an associate member of Mercosur, Venezuela will be
joining one of the largest free trade areas of the world and will benefit from
the group’s preferential trade treatment. Mercosur, whose combined membership
represents a population of over 371 million people5 (over
30% larger than the US population)
has been a major advocate for good governance and a level
playing field among its members, including the Ushuaia Protocol which states that
the “full enforcement of democratic institutions is an indispensable condition
for the existence and development of Mercosur.”6 This follows the
announcement of the new PetroSur accord, a joint Venezuela-Argentina energy
sector venture that will eventually include other Latin American countries as
well. To inaugurate the agreement, Venezuela has promised to buy up to eight
oil tankers from Argentina, a move that is predicted to put thousands back to
work in the depressed Argentine ship-building industry. President Néstor
Kirchner of Argentina praised the agreement, saying “today we've taken a big
step forward on a very important agreement for those who work here and who will
now have a new source of jobs.”7
This comes on the heels of an oil-for-food
accord with Argentina,8 at an estimated value of $200 million; as well as a
cooperation agreement between the public television stations of both countries.9 The aim
of these accords is to increase regional cooperation and integration, and help
prevent an impending energy crisis in the Southern Cone country.
Venezuela is also expanding bilateral trade in the region,
by convoking a series of business expos to provide investment and trade
opportunities. These expos, facilitated through the Ministry of Trade and the
Export Bank, will be held this year with Colombia, Argentina, Brazil, Uruguay,
Bolivia, Ecuador, and the Caribbean. Their goal is to at least double the
bilateral trade with each country by 2005.10
EXPANDING COOPERATION for Caribbean and
Central American Energy Security
Cooperation with smaller economies in the Caribbean is also
increasing. In early July, Venezuela presented the idea of a new regional
energy endeavor to representatives from Antigua and Barbuda, the Bahamas,
Barbados, Belize, Cuba, Dominica, Grenada, Guyana, Jamaica, St. Kitts and
Nevis, St. Lucia,
St. Vincent and the Grenadines, Suriname and Trinidad and
Tobago. Later this year, the countries will meet again to work out the details
of PetroCaribe, a crude and refined oil products company that will distribute
to fourteen Caribbean countries at preferential rates. Officials say that oil
companies currently sell to Caribbean countries at unfair profit margins, a
situation that Venezuela hopes to rectify in the partnership with the countries
that will emphasize development of their own national oil refining and
distribution capacities.11
This new venture builds upon the accords already in place
with the Caribbean and Central America to facilitate energy security. The San
Jose Petroleum Accord,12 jointly administered by Mexico and Venezuela and renewed
annually, was created in 1980 to facilitate the supply of petroleum products on
favorable terms to Barbados, Belize, Costa Rica, the Dominican Republic, El
Salvador, Guatemala, Haiti, Honduras, Jamaica, and Panama. The Caracas Energy
Accord,13 a regionally-inclusive bi-lateral cooperative energy
agreement administered by Venezuela, was extended to the original beneficiary
countries of the San Jose Accord, and expands its coverage.14 All
members of the Association of Caribbean States15 are eligible to
participate. The Caracas Accord effectively ensures that energy security
cooperation will continue to expand the vision for regional integration and
economic development.
PROMOTING ANDEAN SECURITY: Anti-Terrorism,
Free Trade, and Energy Security
Venezuela has long been a reliable source of energy to the
US, providing 12% of the US oil market.16 But the country is moving to
supply the hemispheric market through participation in free trade deals. After
several decades as a founding member of the Andean Community (CAN), Venezuela
has, together with the other Andean countries, made significant strides towards
establishing a customs union by 2005.
Furthermore, Venezuela and Colombia, two of the larger CAN
members, have agreed to jointly commission and publish a study on the economic
benefits of expanding the CAN to include the entire hemisphere through the
proposed Free Trade Area of the Americas.17 But perhaps more importantly,
Venezuela and the CAN have defined common strategic and security goals which
will greatly help the US-led ‘war on terrorism’ and ‘war on drugs’. At the July
12 CAN Presidential Summit in Quito, the five countries committed to an Andean
Zone of Peace, which will be free of weapons of mass destruction. President
Chávez and the other heads of state also committed to a common security and
economic development strategy that will emphasize an end to the social
exclusion that has created the conditions that breed drug trafficking and
violence.18
HONEST BROKER IN INTERNATIONAL DISPUTES
Poor, landlocked Bolivia has sought sea access for the last
100 years as a means to sell its natural resources to the US and international
markets, but has had few international supporters for its claim against Chile.
After raising the controversial issue at international summits late last year,
President Chávez was ultimately greeted with echoes of support for his
visionary position from leaders as varied as President Bush, former President
Carter, Pope John Paul II and other international leaders, who have all offered
to mediate the Chile-Bolivia dispute if invited.19 According to Bolivian
President Carlos Mesa, President Bush wished Bolivia success in its maritime
aspirations and “perceived the importance” that the issue has for the country,
following their meeting at the January Summit of the Americas.20
The idea has become so popular that even Chilean President
Ricardo Lagos has embarked upon discussions with his Bolivian counterpart to
discuss the possibility in the coming months.21 President Lagos has
recently praised President Chávez’s political leadership, saying that, “Our
bilateral relations are positive,” 22 and that “[The international
community] must applaud him. The referendum is a peaceful solution: it takes
courage to go through with it, and Chávez embodies courage.”23
REGIONAL SECURITY: Venezuelan Leadership
and Cooperation
From military cooperation to trade negotiations; from peace
plans to drug interdiction efforts; from diplomatic dispute resolution to
hemispheric energy security; the Venezuelan government is leading by example in
regional cooperation.
1 “Venezuela, Colombia Focus on Security” by Jorge Rueda. The
Associated Press, July 15, 2004.
2 Ibid.
3 Ibid; Transcript of July 14 Press Conference from TV Prensa 2000
Company; and “UN Effort to salvage Colombian Peace
Process to continue Saturday” by Carlos
Hamann. Agence France Press. Jan. 12, 2002.
4 “Venezuela Joins Mercosur Trade Bloc” Associated Press. [Carried
by the New York Times]. July 8, 2004.
5 World Bank’s World Development Indicators 2004. www.worldbank.org.
6 Protocol of Ushuaia, 24 July 1998. Article 8 states that “This
Protocol is an integral part of the Treaty of Asuncion and of the
respective Agreements of integration
celebrated between Mercosur and the Republic of Bolivia and the Republic of
Chile.”
7 “Venezuela To Buy Argentine Oil Tankers.” Dow Jones Newswires
(Carried by the Wall Street Journal). July 8, 2004.
8 The terms of the agreement include an exchange of 8 million bbl of
fuel oil and 1 million bbl of diesel oil, in exchange for
agricultural products such as grain, soy,
dairy products, beef and 250,000 heads of cattle.
9 “Incorporación De Venezuela Como Miembro De Mercosur. Firma De
Convenios.” July 8, 2004.
http://www.mre.gov.ve/Noticias/A2004/Mercosur-Iguazu/Index.Htm
10 “Redimensionando el comercio binacional.” Bancoex en el Mundo, año
1, número 4, febrero-marzo 2004.
11 “Venezuela, Caribbean to Discuss Oil Deals”. The Associated Press
(Carried by the New York Times). July 14, 2004.
12 The two nations will finance the purchase of oil for their
neighbors up to 20% of the invoice.
13 Under the terms of the Accord, Venezuela will finance one quarter
of crude (if prices rise over $15/barrel) as a 15-year loan
at 2% interest. The loan holds a one year
grace period on repayment, and provisions for in-kind repayment.
14 Signing on to the new accord in 2000 were Belize, Costa Rica,
Dominican Republic, El Salvador, Guatemala, Haiti,
Honduras, Jamaica, and Nicaragua. Cuba
signed on shortly after.
15 Colombia, Mexico, Venezuela, all Central American Countries,
CARICOM, Dominican Republic, Cuba, Panama, France
{associate membership on behalf of French
Guiana, Guadalupe, and Martinique}, Aruba, and the Netherlands Antilles.
16 Statement of PFC Energy before Senate Committee on Foreign
Relations, Subcommittee on Western Hemisphere. June 24,
2004.
17 “Venezuela y Colombia acuerdan estudio conjunto para medir impacto
del ALCA”. Agence France Presse. July 15, 2004.
18 From “Principales logros de la XV Cumbre Presidencial Andina.”
Andean Community Website. Available at
http://www.comunidadandina.org/cumbre_quito/np12-7-04b.htm.
19 “Landlocked Bolivia eyes Chile's coast” by Kevin Hall. Miami Herald.
Jan. 23, 2004. “Landlocked Bolivia Wants Coastal
Key From Chile” by Hector Tobar. Los
Angeles Times. March 21, 2004.
20 “Bush deseo exito a Bolivia en su pretension maritima, segun
Mesa”. Agence France Presse. January 14, 2004.
21 “Lagos and Mesa plan bilateral talks”. LatinNews Daily. July 9,
2004.
22 “Lagos: relaciones con Venezuela se han normalizado”. Associated
Press (Carried by El Nuevo Herald). July 15, 2004.
23 “Lagos pide apoyo de Mercosur a referendum en Venezuela y elogia
coraje de Chávez”. Agence France Presse. July 8,
2004.
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