By IPS Correspondents
LA PAZ, May 9 1996 (IPS)

Southern Cone trade harmony is under threat through a dispute between Bolivia and Brazil over a new waterway that could rob the Bolivians of traditional markets and cause a hefty hiccup in the South American integration process.

Bolivian exporters of non-traditional products say that two new ports established by Brazil to link the Medeira and Amazon rivers, and a grain transportation system for the Andean market, could be fatal to their sales in Peru, Colombia and Venezuela – Bolivia’s leading trade partners.

The magazine ‘America Economica’ recently fueled the fears of Bolivian industrialists with an article describing the Brazilian routes which threaten Bolivian soya, the queen of non-traditional exports.

Brazil will start using the port of Itacoatiara, 120 kms from Manaus, in September along with another in Porto Velho, the capital of the State of Rondonia.

America Economica claimed the port in Itacoatiara will become the leading international grain-handling centre, paving the way for Brazilian soya to be sold cheaply in Europe, Asia and the subregional markets. The Madeira-Amazonas waterway, meanwhile, will increase the competitiveness of Brazilian soya against supplies from Bolivia and the other Southern Cone Nations – Argentina, Paraguay, and Uruguay.

Trade analysts agree Bolivian soya producers will be seriously threatened by the possibility of losing the Andean markets, where they sell their produce tariff-free under an agreement with the other Andean Pact nations (Colombia, Ecuador, Peru and Venezuela).

“Bolivia has no perspectives of nor conditions with which to compete on the international markets,” said Erwin Reck, head of the Eastern Agricultural Chamber which represents the Bolivian soya companies.

Bolivia currently exports some 460,000 tons of soya per year, at a value of some 245 million dollars, mostly going to Peru, Colombia and Venezuela, which take 90 percent of the beans and their derivatives.

Figures from the National Institute of Statistics reveal that in 1995 soya exports represented a quarter of the nation’s non- traditional sales and the tenth part of all the national exports.

Brazil is considered the world’s third largest producer of soya beans. In 1995 it exported 3.7 million tons of derivative foodstuffs.

Venezuela is one of the most attractive regional markets for the Brazilians, as it imports 1.5 million tons of soya derivatives each year.

The Bolivian exporters are meanwhile bombarding their own government, who they accuse of overlooking the sector and of not fulfilling their promises to develop a road network as an alternative to the present railway system used for exports.

Landlocked Bolivia is obliged to transport its ever-increasing soya production by the creaking national rail system to the ports on the Paraguay-Parana waterway which flows into the Atlantic Ocean, leaving them at a distinct disadvantage.

The national capacity to fight for the Andean soya markets is not very secure, but analysts said given the new backdrop of future associations between the Andean Pact and Mercosur (Argentina, Brazil, Paraguay and Uruguay), conditions could be favourable. They also said that Bolivian soya could well continue to be competitive if this nation made future use of the Brazilian waterway.

For the moment, Bolivian exporters are calling on the government to invest in infrastructure, and to grant the sector subsidies, tax-relief and greater attention in order to save one of the nation’s most productive areas from an early death.

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