VENEZUELA, COLOMBIA REACH AGREEMENT ON BORDER TRADE

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP08C01297R000700030078-9
• Release Decision: RIFPUB
• Original Classification: K
• Document Page Count: 4
• Document Creation Date: December 22, 2016
• Document Release Date: September 25, 2012
• Sequence Number: 78
• Publication Date: July 26, 1983
• Content Type: MISC

Declassified and Approved For Release 2012/09/25: CIA-RDP08001297R000700030078-9
C.
1301110-i-L
COUNTRY SECTION INTER-AMERICAN AFFAIRS
NENEZUELAT-COLOMBIA=REAEH-AGREEMENT-ON-BORDER-TRADET,
Measures Outlined
Bogota EL ESPECTADOR in Spanish 26 Jul 83 p 10-A
[Text] ?A-new-exchange_agrTaiat7HaT7been-reached-by-Colombia-and
in-attempt-to-normalize-border_tradaL:between the two countries. At the
same time, the neighboring country officially lifted restrictions it had im-
posed on products from the Andean area.
The bases of the exchange agreement, which was signed in Caracas by the mana-
gers of the Central Banks of the two nations, establishes a rate amounting to
9.9 bolivars to the dollar for transactions in foreign exchange in the border
zone and sets a monthly quota of $3 million for the purchase of Venezuelan
currency.
Upon returning from Caracas yesterday, President Belisario Betancur said that
the manager of the National Bank, Hugo Palacios Mejia, was making important
progress with his colleague from the Central Bank of Venezuela in solving
border problems having to do with the exchange aspect. The terms of the
agreement will be revealed in the coming hours.
He said that such contacts drOn-stItut-e-the-fit-6-t step toward the sorirt-iiiii-b-f,
cfhe_entifF:HTiner-problem-stemming-ficiraIls-exchange_CfLgf?-dd-the
di6V7Nluation-of-its-money-with-respect-to-the_d=r.
The president preferred for the manager of the National Bank himself to give
detailed information about the terms of the bilateral agreement.
Sources close to the delegation accompanying the president which returned
yesterday said that the basis of the exchange agreement is the establishment
of a rate of exchange of 9.9 bolivars to the dollar. This rate of exchange
will govern the free currency market between the two countries. There are
also other rates of exchange which the Venezuelan Government applies in its
commercial trade and financial relations, depending on what is advantageous
to the country.
The exchange agreement makes official a devaluation of the bolivar compared
with the Colombian peso amounting to over 50 percent. The 9.9 bolivars to the
dollar mean that every bolivar will be worth 8.04 pesos. Up until the crisis
in the Venezuelan economy, every bolivar was worth over 17 pesos.
18
Declassified and Approved For Release 2012/09/25: CIA-RDPO8001297R000700030078-9
Declassified and Approved For Release 2012/09/25 :? CIA-RDPO8001297R000700030078-9 re%
In order to facilitate the purchase of bolivars entering Colombia, the Central
Bank of Venezuela will create a special quota of $3 million a month for the
purchase of such bolivars in the city of Cucuta especially.
The agreements reached by the two countries are the result of contacts on
the presidential level in Caracas recently, on the occasion of the summit con-
ference of Andean chiefs of state and the Contadora Group. In addition to the
multilateral action, presidents Belisario Betancur and Herrera Campins ex-
changed views on specific bilateral problems which the two countries have in
the economic and commercial fields.
X-olomhiazhadl-_--suspended-ali?exchAnge-negotiat io na-w itTh-the-V-ene zu elan_ current
at?the-beginning-of=thi-s=year-, following the Venezuelan crisis which led the
government of that country to establish exchange controls, devalue the bolivar
and set differential rates. .c$4:nee=that=time7=ngotkationsr:had=b-eenmmonductd
through-the:tentral_Bank-d7=but_without_any_succes
With the normalization of the currency exchange rate, the situation in the ?
border zone should clear up. aennomic-and-commerci-diaT6vement-in_Ibetpl
,been-almost-paralyzed_faf=a-oriths
Restrictions Lifted
Regarding the restrictions that Venezuela had imposed on trade from other na-
tions in the Andean Group, President Belisario Betancur said that they had '
just been lifted.
For his part, the director of INCOMEX [Mexican Foreign Trade Institute],
Gustavo Tobon Londono, who was a member of the Colombian delegation in Vene-
zuela, said that the products on which restrictions had been placed were
transferred to a system similar to what in Colombia is a previous authorization.
The decision is considered to be an important first step toward the future
restoration of trading facilities with the Venezuelan market. Tobon Londono
said that it is hoped that this will occur as soon as possible and that in the
meantime, foreign trade officials from both countries will continue to hold
periodic meetings.
Venezuela's restrictive measures hurt the integrationist spirit of the Andean
Group and gave rise to serious criticism in other countries in the subregion.
As part of the integrationist effort made by the five Andean presidents at
their Caracas meeting, the unilateral measures violating the Cartagena Accord
were done away with.
In addition to what was accomplished on the exchange and commercial fronts,
President Betancur said that an agreement had been reached to strengthen the
Viiia?onal sugar comprex Azurca,lin-whiC-h-t-Oth:countrie-s-Are-sharehold-ers7:. The
president added that the project 141177genrate:MAny-jott-in7thelliard-er-Ohel
And p-ertif:EWTOriWuctiiin,_M'arketing_and-exportaiiOnlOf:laigelquantities-ofj
4sugar.-1.
19
Declassified and Approved For Release 2012/09/25: CIA-RDPO8001297R000700030078-9
I Declassified and Approved For Release 2012/09/25: CIA-RDP08001297R000700030078-9
Agreement
The representatives of the Andean Pact countries also established an agreement
to protect against any risk encountered by the food supply, seeking ways of
increasing agricultural production and productivity, especially with respect
to grain, oil-yielding products, meat and other basic items.
The project,
exposition),
outstripping
of products.
and policies
products.
named after Jose Celestino Mutis (director of the first botanical
states that the food crisis in member countries has meant demand
production, which forces nations to import ever larger quantities
It is therefore indispensable to outline preventive policies
of mutual support, stimulating the intraregional market for basic
At the same time, the agreement contemplates an environmental protection pro-
gram.
Businessmen, Exporters Praise Agreement
Bogota EL ESPECTADOR in Spanish 27 Jul 83 p 9-A
[Article by Juan Alvaro Castellanos]
[Text] Colombia could recover nearly $60 million of its weakened trade bal-
ance if it partially restores negotiations with Venezuela.
Private enterprise and PROEXPO [Export Promotion Fund] are confident that the
mechanisms of the preliminary license system will be immediately adapted be-
cause they are two markets that complement one another and are nerve centers
of the Andean subregion.
Industrialists and exporters, along with national businessmen, celebrated the
exchange agreement and the lifting of trade restrictions adopted by Venezuela
and stated that the efforts of Colombian producers and exporters would have
to be doubled in order to achieve the figure of sancuiriorty, which6as-tgela
C1eveI-regts-tered-Iast-year-1n_CoIagralT7s-ales-fBMVetydaa71
Exports
During the first four months of the year, trade between the two countries show
experienced a sharp drop which, compared with figures for last year, amounted
to 66 percent.
C5lbrilbian-exports-between_January:and-AgrIl-tovered-thasic markets-of-the-
netghborangon77espe-ciaIly_with7respect_tn_meat,-men-and_womenclothing71
lndustrfdr7Oloves,-nlon,_plastic-packlng-r-automoba,le_157aTTJFMT7blectri'cal
esgRponents-and-printing-materfar
The volume exported by the country represented the sum of $45 million, compared
with a similar period in 1982, when sales amounted to $136 million.
20
Declassified and Approved For Release 2012/09/25: CIA-RDPO8001297R000700030078-9
Declassified and Approved For Release 2012/09/25: CIA-RDP08001297R000700030078-9
In 1983, 52,000 tons were shipped, a heavy blow to the truck and air transport
system, according to exporters, a system that customarily covers special routes
to Caracas, Maracaibo and San Cristobal. However, incentives for the second
half of the year could push figures beyond estimates of normal marketing be-
tween the two countries as a result of sales of motors which SOFASA [expansion
unknown] began at the close of the first half of the year. These results will
not be reflected until the end of the year.
Negotiations
(1iifactured-7g-DcTds____and fO-61_prodircT??a:re-t-h-e-two-mo-gt?i-ip---nort-ant-are-a-g-CfTEFF'n-,,
MeTefal:ffalle-b-etvieen-Cuiamtila-and-Venezuera7a Different agricultural products
and raw materials will benefit from the system of previous licensing announced
by Venezuelan foreign trade officials. It is estimated that over $3 million
worth of agricultural products have gone to Venezuela since last year to cover
the needs of the first six months of 1983.
"That volume could be sold on the. principal Venezuelan markets over the next
three months, along with other industrial products," explained Alfonso Rojas
Llorente, president of the Exporters Association.
Colombian-purchases,dilring-the-firstf2THETEalIrinvolved-ail-,,
The director of PROEXPO, Jose Vicente Mogollon, noted that the government is
drawing up a project for the establishment of a foreign trade bank, as it
had announced at the beginning of this term, based on the Export Promotion
Fund and requiring the country's presence on American and European markets.
He was optimistic over the two agreements made with Venezuela because they
will make it possible to recover income for the nation and establish accep-
table levels for industrialists and merchants.
Based on export figures, the trade balance compared with other Andean countries
involves figures which Rojas Llorente labeled as "tragic with respect to for-
eign trade."
The balance was negative for the first four months of the year, with b. deficit.
of $185 million. Analyzed in terms of the circumstances of each Andean country,'
Colombia was practically out of touch commercially speaking. The limited market
included sales worth $630,000 to Bolivia, $16,000 to Ecuador, $11,000 to Peru
and $45 million to Venezuela, based on contracts made before the crisis with .
the bolivar and payment on which became effective once the goods were shipped
at the beginning of the year.
PROEXPO and the Exporters Association admitted that the country will have to
promote its foreign trade to other sectors, even though figures for the Carib-
bean and Central America, while showing an increase, are not encouraging for
the time being. Some $350,000 worth of products were sold to Cuba; $180,000
to Jamaica and Haiti; nearly $2 million to .Nicaragua, El Salvador and Costa
Rica. These were isolated operations between private and official sectors,
with payment:lin dollars scheduled for the coming months.
11,464 ,
CSO: 3348/606
21
Declassified and Approved For Release 2012/09/25: CIA-RDPO8001297R000700030078-9