MercoPress. South Atlantic News Agency

Chavez, Uribe team up to face world slowdown

The presidents of Colombia Alvaro Uribe and Venezuela Hugo Chavez pledged this weekend to invest 100 million US dollars each in a special fund in hopes of boosting cross-border trade during a meeting held in Cartagena, Colombia.

They also announced the creation of bilateral economic committee to address the impacts of the world crisis and said the cash would help create small businesses and should finance infrastructure projects along the border. Trade between the two nations reached a record 7.2 billion US dollars in 2008, and Chavez said they should aim for 10 billion a year in 2009 and 2010. Once-rapid growth in Venezuela's oil-dependent economy is slowing with falling crude prices, while Colombia has seen textile sales decline. Caracas is Colombia's biggest trade partner after the US, making it especially vulnerable to a slowdown in Venezuela. Colombia' trade surplus with Venezuela was 6 billion US dollars last year. The presidents also discussed ways to increase primary manufacturing so car components can be made locally from the region's natural resources, reducing reliance on imports, Chavez added. Venezuela agreed to consider easing quotas on Colombian automobile imports, including trucks, buses and vehicles that burn natural gas, Chavez said. Colombia's Venezuela exposure was underlined by German Verdugo, research director for the Colombian stock brokerage Correval who said that "one of the major threats to Colombian growth this year is Venezuela's economic performance, since aside from being our second-biggest trade partner it is the main market for Colombian industrial exports and an important generator of employment." "It is consequently of the greatest importance for the Colombian economy to strengthen trade relations with Venezuela at a time when the world economy faces an uncertain future, above all because of the importance trade with our neighbouring country has for Colombian industry," Verdugo said. Colombia's National Foreign Trade Association, or Analdex, Javier Diaz, believes that the two countries should define "a judicial framework for commercial operations, in order to stabilize the development of bilateral business ventures."