US-Venezuela Business Roundtable Inaugurated in Caracas

Venezuelan and U.S. business leaders gathered in Caracas for the opening session of a macro business round between the two countries. Despite continuing political tensions, Venezuela-US trade is increasing, and remains a priority, say officials of both countries.

Caracas, Venezuela, June 30, 2005—American and Venezuelan business representatives, Venezuelan government officials, and ambassadors of both countries cut the ribbon at the first “Macro Business Round U.S.-Venezuela” this afternoon. Participating in the event are 625 businesses, 225 from the U.S. and 400 from Venezuela. After cutting the ribbon to officially inaugurate the two-day event, U.S. ambassador to Venezuela William Brownfield and Venezuelan ambassador to the U.S. Bernardo Alvarez strolled through the exposition, accompanied by Venezuelan government officials, greeting business representatives of both countries along the way.

“The private sector is a key associate of any community,” said ambassador Brownfield, “with both an economic and a social role.” “This macro-business round reflects the possibilities that we have for both countries to have a positive commercial relationship,” said Brownfield, adding, “a commercial relationship that favors the interests of both nations’ businesses.”

“Venezuela and the U.S. are logical and natural commercial partners for geographic reasons, and this will not change. Nevermind other differences, geographically we are in the same hemisphere, and we are here as geographic associates and logic dictates that we’ll cooperate commercially. This event offers an excellent opportunity for the private sector in the U.S. and for the private sector here in Venezuela, and for the Venezuelan authorities to have a good dialogue: a dialogue of possibilities and opportunities, a dialogue of worries and uncertainties, and a dialogue of what can be developed over the coming months and years, and I think this dialogue is good and positive,” said Brownfield.

The business round comes at a time of particularly strained political relations between the two countries, due to the ongoing diplomatic battle between Venezuela and the U.S. over Venezuela’s extradition request for Cuban terrorist Luis Posada Carriles, among other issues.

“This is a business round,” said Venezuela’s ambassador to the U.S. Bernardo Alvarez, arguing that political considerations such as the fate of Posada have no place here. “They are two completely distinct issues.”

For the past several years Venezuela has been prioritizing and encouraging “South-South” trade, including special emphasis on trade within Latin America and the Caribbean. Perhaps even more important, Venezuela has led the hemispheric opposition to the U.S.-proposed Free Trade Area of the Americas, and President Hugo Chávez has regularly spoken out against what he describes as “savage capitalism.”

With respect to the former, Pedro Khalil, Director of Foreign Trade at the Ministry of Light Industry and Commerce confesses that even in the context of South-South trade, Venezuela cannot forget the importance of their two biggest trading partners: the U.S. and Colombia. Venezuela participated in a similar business round with Colombia last month, held in Bogotá.

“We have a tradition of trade [with the U.S. and Colombia] that goes back many, many years and we must continue helping our companies, who create employment and in so doing contribute to the fight against poverty, by participating in these kinds of events,” said Calil.

U.S.-Venezuela trade is currently valued at US$29 billion, making Venezuela the U.S.’ third-largest trading partner in Latin America after Mexico and Brazil.

Venezuelan President Hugo Chávez recently proclaimed that Venezuela is developing a new socialism, called the “Socialism of the 21st Century.” Though such a policy might appear to be in conflict with a business expo with the aimed primarily at expanding U.S. investment in Venezuela, ambassador Alvarez disagrees.

“This is a business round with American companies,” said Venezuelan ambassador to the U.S. Alvarez, arguing that any suggestion that this business round is in conflict with Venezuela’s political goals is akin to suggesting that private capital cannot exist in a socialist society. “What’s more,” added the ambassador, “there are public sector companies here too! There are importing and exporting cooperatives, as well as public sector companies here. The company is merely a manner of organizing production,” said Alvarez, “which can be public, private or mixed.”

“The important thing is the quickness and the massive scale of U.S. companies’ participation in this business round reaffirms the value of U.S.-Venezuelan commercial relations.”

“It’s hard to tell whether or not political tension between the U.S. and Venezuela has affected commerce,” adds Dr. Antonio Herrera-Vaillant, General Secretary of the Venezuelan-American Chamber of Commerce (Venamcham). “Trade is up. Investment is not up.”

“Venezuela’s idea of diversifying [trade] is perfectly legitimate, every country does that. The most diversified economy in the world is that of the United States,” continued Herrera-Vaillant. “Venezuela has every right to try and diversify. I do, however, think that the best deal is to take the ample opportunities offered by the U.S. since generally in dealings with the U.S. you get cash on the barrel,” he added.