Venezuela wants to keep off the FTAA for the BAA
<a href=www.vheadline.com>Venezuela's Electronic News Posted: Monday, April 28, 2003 By: Jose Gregorio Pineda & Jose Gabriel Angarita
VenAmCham's Jose Gregorio Pineda (chief economist) and Jose Gabriel Angarita (economist) write: The FTAA (Free Trade Area of the Americas) has awakened strong resistance in the current administration's regional integration strategy. The Chief Executive has gone so far as to propose that the South American countries first strengthen the trade ties among them and only then talk about the FTAA ... Chavez defined this idea as the Bolivarian Alternative for the Americas (BAA).
The principal justification for this posture is the inability of countries like Venezuela to become competitive by 2005, a period our authorities consider far too short ... this suggests the idea of the BAA as an alternative for free-market economics, whose promotion is insistently attributed to the FTAA initiative by our authorities.
Though the idea of strengthening trading ties among the Latin American countries seems necessary and positive, it goes no further than simple rhetoric because our country is now violating its commitments in the CAN (Andean Community of Nations) with the recent exchange control measures and elimination of tariffs for imports of certain top-priority products.
This is reflected in two recent CAN resolutions, dated April 23. In Resolution 714, CAN finds that the Republic of Venezuela's unilateral grant of a total import tax exemption for a list of products the Venezuelan government considers "essential or mass consumer goods" violates the country's obligations emanating from several provisions of the Andean Community's legislation ... CAN therefore gave Venezuela fifteen (15) business days from the Resolution's date of publication in the Official Gazette of the Agreement of Cartagena to put an end to these violations.
...and in Resolution 715, the CAN finds that the foreign exchange measures adopted by the Republic of Venezuela restrain Intra-sub-regional trade, in violation of Article 72 of the Agreement of Cartagena and Commission Decision 406, which governs imports of products originating in the Andean Community's member countries.
Hence, Venezuela has been given ten (10) business days to lift all restrictions on imports from the other member countries. Venezuela's reaction to these CAN resolutions will reveal just what kind of strengthening of trade ties the President is talking about.
Without a consolidation of the existing trade institutions, there is no point in forming the FTAA ... and far less in creating a BAA; the most important obstacle to an agreement of that kind would be an institutional weakness that prevents application of existing commitments.
Article in Spanish