The President of Venezuela, Hugo Chávez and his Columbian peer, Alvaro Uribe have signed five agreements during a brief one day visit by the latter to Caracas. The signed deals include Colombia providing electricity from Puerto Iniria to Venezuela’s San Fernando de Atabapo. Besides, they have also inked other pacts such as granting of license for Columbia to export 10,000 automobiles, letters of intent on the feasibility of trading in local currencies and a joint credit fund of about $2bn to boost bilateral trade.
The new agreement will thus lift the ban on vehicle imports from Columbia to Venezuela. Columbia had exported 15,000 vehicles to Venezuela last year and in the previous year the figures stood at 45,000. In 2008, the trade between both countries have reached about $7.5bn, and Columbia was the major gainer in the exchange.
Venezuela is Columbia’s second largest trading partner after the US. Though there are significant trade imbalances weighing against Venezuela with just 20 percent share of the two-way trade pie, the deals expect to address those issues too.
Since the end of 2007, the trade between both countries got affected when Uribe refused Chávez’s mediation for the release of hostages held by Revolutionary Armed Forces of Colombia (FARC) guerrillas in Colombia. The relations further strained when Uribe accused Chávez for providing a safe haven to the FARC rebels in the Venezuelan borders, and at that point Chávez even declared support for them.
But lately, the Venezuelan President has backtracked from his stance and urged FARC to lay down its arms after the recent hostage drama where people were rescued by the Columbian military. Analysts claim Chávez purportedly has mellowed down owing to lower oil prices, the major revenue earner for his country and the global economic meltdown. In the present scenario he did not wish to alienate anyone in the region to avoid derailment of his regional ambitions, they added.