LATIN AMERICA: Chavez, Morales and Castro Close Ranks

By Patricia Grogg Reprint | | Print |

Patricia Grogg

HAVANA, Apr 27 2006 (IPS) - Less than two weeks after declaring that the Andean Community trade bloc is “dead,” Presidents Hugo Chávez of Venezuela and Evo Morales of Bolivia will be meeting this weekend in Havana with Cuban President Fidel Castro to further boost integration among the three countries.

The mini-summit was recently announced by the two South American leaders, although as of Thursday it had not yet been confirmed by Havana.

The meeting will take place exactly one year after the signing of 50 agreements between Venezuela and Cuba in late April 2004.

Castro and Chávez consider these agreements an example of what could take place on a regional level if their Bolivarian Alternative for the Americas (ALBA) initiative were to become a reality.

The two leftist leaders are promoting ALBA – which means “dawn” in Spanish û as a Latin America-wide integration mechanism, as well as a more egalitarian alternative to the Free Trade Area of the Americas (FTAA, or ALCA in Spanish), the free trade initiative backed by the United States that would include all of the countries of the hemisphere except Cuba.

For the Cuban authorities, the dozens of agreements signed by Caracas and Havana are the result of a “mutually beneficial” alliance that is part of a broad and “far-reaching” integration process. They encompass various aspects of cooperation in the health care and education sectors, as well as economic and trade relations.

On Apr. 19, during a meeting in Asunción, Paraguay, both Chávez and Morales voiced harsh criticism of the Andean Community, of which Venezuela and Bolivia are members. Chávez went so far as to announce that his country would pull out of the regional bloc, which also comprises Colombia, Ecuador and Peru.

The Andean Community represents a market of 125 million people (one-third of the entire population of South America) with an annual combined gross domestic product (GDP) of 260 billion dollars and 128 billion dollars annually in foreign trade, seven percent of which is carried out among the bloc’s members.

Chávez’s threat to withdraw from the Andean Community was triggered by the recent signing by Colombia and Peru of bilateral free trade agreements with the United States, which the Venezuelan leader sees as schemes similar to the FTAA.

Chávez, Morales and Castro concur in the belief that the FTAA would serve as an instrument of U.S. economic domination over the hemisphere.

At the recent meeting in Asunción, Morales declared that the FTAA “is being defeated by ALBA,” while free trade agreements (FTAs) are being defeated by People’s Trade Agreements (PTAs).

Early this week, the Bolivian leader announced that during his trip to Havana this weekend, he and his Venezuelan and Cuban counterparts will sign a PTA that will allow Bolivian exports to enter the two countries tariff-free.

He added that Venezuela “has pledged to buy all of Bolivia’s soybeans,” an announcement that will come as a relief to his country’s soy producers, who will lose their market in Colombia once the U.S.-Colombian free trade agreement enters into force.

Cuba also imports soybeans and soy oil among the various foodstuffs that it has regularly purchased from U.S. producers since 2001, following the passage of legislation in the United States that authorises these sales û under strict conditions û in spite of the U.S. trade embargo against the socialist Caribbean island.

Earlier this month, Pedro Álvarez, the president of the Cuban state-owned food importing company Alimport, reported that Cuban currently imports around 1.7 billion dollars in food products annually.

According to Morales, Havana has shown particular interest in buying Bolivian quinoa, a protein-reach grain native to the Andean region. Bolivian business sources note that the grain is included in the Cuban-Bolivian Economic Complementation Agreement.

This agreement, signed in the framework of the Latin American Integration Association (ALADI), establishes tariff concessions for roughly 100 Bolivian export products and 80 from Cuba, a small fraction of a total of around 7,000 export lines.

The general manager of the Bolivian Foreign Trade Institute, Gary Rodríguez, commented to the press that Venezuela forms part of the Trade Liberalisation Programme that established the Andean Free Trade Zone, which leaves all products free of tariffs.

As a result, in his opinion, the PTA will have greater political than trade-related connotations.

In the context of Cuban-Venezuelan cooperation, the state-owned oil companies Petróleos de Venezuela (PDVSA) and Cuba Petróleo (CUPET) set up a joint venture in early April to re-open a petroleum refinery in Cienfuegos, located some 232 km east of Havana. The currently inactive Soviet-era refinery has the capacity to process around 700,000 barrels of oil a day.

“We are going to begin with an approximate investment of between 800 million and one billion dollars in shared expenditures,” Venezuelan Ambassador Adán Chávez û who is President Chávez’s brother û told the press in Havana.

Venezuela currently supplies some 900,000 barrels of crude daily to Cuba, which pays for part of the cost with health care services.

Before he took office in January, Morales’ first trip abroad as president-elect of Bolivia was to Cuba, where he signed a number of cooperation agreements in education and health. These include the training of 5,000 Bolivian doctors in Cuba and teaching material and assistance to undertake a large-scale literacy campaign in the South American nation.