Venezuela imposes trade restrictions on Colombia in August 2009.

Context

In August 2009 Venezuelan President Hugo Chavez announced that he would be blocking the import of 10,000 Colombia-made automobiles, and also would be banning the Colombian firm Ecopetrol from participating in an auction to exploit Venezuelan oil reserves.  Additionally, the Venezuelan leader suggested that his government would be looking for alternative suppliers for other Colombian goods typically imported into Venezuela, including multiple food products. Venezuelan Trade Minister Eduardo Saman told press that “[i]f Colombia does not rectify itself regarding the military bases, within one year we could replace pretty much all the  trade.” Finally, Venezuela’s ministry of energy said publicly that exports of the country’s abundant fuel to Colombia was “under evaluation”.

These measures occurred in the context of rapidly deteriorating relations between the two states, but apparently in response to a decision by the neighbouring Colombian government to allow US military personnel access to Colombian military bases. President Chavez stated that “(access to) [t]hese bases could be the start of a war in South America… We’re talking about the Yankees, the most aggressive nation in human history.” In addition to these economic measures, Venezuela also withdrew diplomats from Colombia in protest. A further source of dispute between the two states was allegations of Venezuelan support for the Colombian rebel group Revolutionary Armed Forces of Colombia (FARC), which was strongly denied by President Chavez. These events also occurred in the context of Chavez’ attempts to boost domestic manufacturing of automobiles and other goods.

Impact

Prior to this move, bilateral trade between Venezuela and Colombia was reportedly worth around US$7 billion per year. Reporting suggested that a June 2009 contraction in the Colombian economy could partly be attributed to a reduction in permitted vehicle exports to Venezuela.

Argentina was reportedly an early beneficiary of these measures as an alternative source of imports to Venezuela. In August 2009 a delegation from the Argentinian automobile industry led by Argentinian President Cristina Fernandez de Kirchner travelled to Caraccas, with a statement from Argentina’s minister of production, Debora Giorgi, stating explicitly that Argentina had “an opportunity due to the interruption of (Venezuela’s) imports from Colombia, with automobiles as well as in the farm machinery, footwear and textile sectors” Brazil is also thought to have benefitted as an alternative import source for Venezuela.

The ban on food imports from Colombia further exacerbated food shortages in Venezuela, which had introduced export restrictions in 2008 to try and manage rapidly rising prices, and embarked on a program of nationalising the domestic food supply chain.

Responses  

i) Colombian government and industry responses.

The head of the Colombian Exporters’ Association, Javier Diaz, told press that, although “Venezuela will find it difficult to replace food imports from Colombia”, nevertheless Colombia should expect a drop of around 10% in its exports to Venezuela compared to the previous year.

i) Venezuelan government and industry responses.

In February 2010 President Chavez signalled a willingness to return to trade normality with Colombia. During a Rio Group of regional leaders meeting Chavez told press that “”[i]f (Colombian President) Uribe needs to sell more Colombian-produced goods to Venezuela … we are willing to evaluate that (request)” while adding that “with all respect, it’s not that you can hold a gun to me and say, ‘You, buy this from me, otherwise I will accuse you of imposing an embargo.’”

Status

Following further periods of tensions, the election of Colombian President Gustavo Pedro led to the restoration of formal diplomatic relations in August 2022. Food scarcity and ongoing food crises continue in Venezuela, the reasons for which are multifactorial.

Reference list

BBC News. 2009. “Chavez turns up heat on Colombia.” August 6. Available at: http://news.bbc.co.uk/2/hi/americas/8186767.stm

Carroll, R. 2009 “Venezuela’s car industry goes into reverse as used vehicles sell for more than new”. The Guardian. May 26. Available at: https://www.theguardian.com/world/2009/may/25/venezuela-car-industry-problems

Daniel, F.J., and Maler, S. 2009. “Venezuela to halt Colombia vehicle imports in spat.” Reuters. August 6. Available at: https://www.reuters.com/article/markets/us/venezuela-to-halt-colombia-vehicle-imports-in-spat-idUSN05253591/

Grant, W. 2009. “Chavez fumes at neighbour Colombia.” BBC News. August 6. Available at: http://news.bbc.co.uk/2/hi/americas/8188243.stm

Merco Press. 2009. “Argentina tries to replace Colombia as supplier of vehicles to Venezuela.” August 6. Available at: https://en.mercopress.com/2009/08/06/argentina

Pielago, B. 2020. “Uncovering the 5 Major Causes of the Food Crisis in Venezuela” 31(1) Locality. Available at https://glocality.eu/articles/10.5334/glo.24

Rosenburg, M. 2010. “Venezuela’s Chavez says may restart Colombia imports.” Reuters. February 24. Available at: https://www.reuters.com/article/markets/oil/venezuela-s-chavez-says-may-restart-colombia-imports-idUSN23523076/

Stabroek News. 2009. “Venezuela says may end Colombia imports in 1 year.” August 21. Reuters. August 21. Available at: https://www.stabroeknews.com/2009/08/ 21/news/guyana/venezuela-says-may-end-colombia-imports-in-1-year/

Taipei Times. 2009. “Colombia, Venezuela look to boost trade.” January 26. Available at:https://www.taipeitimes.com/News/biz/archives/2009/01/26/2003434693