Colombia, Venezuela agree to zero-tariff for 3,800 items

The tariff agreement takes Venezuelan entrepreneurs and businessmen unawares

Venezuela and Colombia signed on Monday a Partial Scope Trade Agreement (PSA) in Caracas. 

Even though the terms and conditions are far different from those governing trade relations among the member countries of the Andean Community of Nations (CAN), the agreement provides some stability. 

Venezuela's Minister of Industry Ricardo Menéndez said that the two countries agreed to keep "zero-tariff" for 3,800 items. 

"The agreement will include all the tariff codes that we have been in place over the past five years," Menéndez said. 

The Venezuelan official stated that the number of items included would prevent any "disturbance" in the economies of the two countries. 

Although the items with zero tariffs are still unknown, a source related to bilateral trade said that in the CAN framework there were 6,400 items with tariff preferences. 

Menéndez would not specify the date of entry into force of the PSA. He said, however, that the schedules to the agreement would be ready before year's end. 

The minister of Industry, who is also Vice-President for Productive Economy, said that the parties would try to develop "production linkages" between Colombian companies and the Venezuelan government. 

Meanwhile, Jorge Botti, the president of the Federation of Trade and Industry Chamber (Fedecámaras), said that Venezuela's main business association would request a meeting with Colombian President Juan Manuel Santos to ask him to consider small and medium-sized enterprises. 

"Colombia viewing the Venezuelan government as its only client should be a short-term situation. 

There are no less than 2,000 (Venezuelan) businesses that make negotiations with Colombian suppliers and this flow must continue." 

Venezuelan entrepreneurs and businessmen were taken unawares by the Partial Scope Trade Agreement.

" The government has no contacts with the export sector and the main association of exporters. 

There was no consultation. 

The government acted unilaterally, as usual," said Alba Guevara, President of the Venezuelan Association of Exporters (AVEX). 

Guevara added that she became aware of the signing of the agreement when she watched a nationwide mandatory TV broadcast and read the media. 

She said that the PSA is not going to favor Venezuelan exporters. 

On October 21, Nicolás Maduro and María Ángela Holguín, the foreign ministers of Venezuela and Colombia, respectively, extended for the second time and for a 90-day period an Economic Complementation Agreement that is to replace the legal regulations of the Andean Community.