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Cuba, Bolivia, Venezuela reject US trade

Saturday, April 29, 2006

Cuba, Bolivia, Venezuela reject U.S. trade


HAVANA — Bolivia’s new left-leaning president signed a pact with Cuba and Venezuela on Saturday rejecting U.S.-backed free trade and promising a socialist version of regional commerce and cooperation.

Cuban authorities did not release copies of the so-called Bolivarian Alternative for the Americas signed by Bolivia’s Evo Morales, so its contents were unclear.

Local media reported that it had the same language as the declaration signed last year by Cuban leader Fidel Castro and Venezuela’s President Hugo Chavez, which contained much leftist rhetoric, and few specifics, but was followed by closer economic ties between the two vehemently anti-U.S. leaders.

The agreement was "a clever mixture of politics and economics, weighted toward the politics," said Gary Hufbauer, an economist at the Institute for International Economics, a Washington think tank.

Venezuela-Cuba trade is expected to reach more than $3.5 billion this year - about 40 percent higher than in 2005. Among other measures, the deal signed between Chavez and Castro has Venezuela - the world’s fifth-largest oil exporter and a major supplier to the United States - selling 90,000 barrels a day of crude to the communist-run island at international market prices, but in exchange for services and agricultural products instead of cash.

Morales, a Bolivian coca farmer who was swept to power on a leftist platform and has long railed against American economic and drug policies, claimed during his campaign to be "the nightmare of the U.S. government." He, like Chavez, has tried to maintain a vibrant private sector while claiming an ever-larger role in managing the economy, and has toned down his rhetoric.

The Cuba-Venezuela deal - known by its Spanish acronym ALBA, also the word for dawn - criticized Washington’s efforts to expand its free trade with Latin American countries.

The U.S.-backed Free Trade Area of the Americas hemispheric trade pact stalled last year, but Washington since has signed nine free trade agreements with Latin American countries.

The Cuban, Venezuelan and Bolivian presidents called the FTAA a U.S. effort to "annex" Latin America. Chavez and Morales have warned they could pull their countries from the Andean Community economic bloc if members Colombia, Peru and Ecuador sign pacts with the United States.

"Only an integration based on cooperation, solidarity and common will to advance together and united to the highest levels of cooperation could satisfy the aspirations and desires of Latin American and Caribbean countries," Cuba and Venezuela wrote in their ALBA deal last year.

"According to any reasonable definition of the term, this is not a trade agreement," Michael Shifter, a political analyst with the Inter-American Dialogue in Washington, said of last year’s deal. "It’s an attempt to pose a real counterweight to the U.S. role and agenda in Latin America."

Shifter predicted few other Latin America nations would join ALBA, instead preferring trade agreements with the United States.

But he said Chavez is likely eyeing Peru as a potential ALBA member if nationalist Ollanta Humala prevails in a May 28 presidential runoff. Humala was the front-runner in the April election.

Morales’ and Chavez’ participation in the socialist-tinged ALBA has rattled Bolivian and Venezuelan business leaders.

"The government should reach out more to the business sector and create a common agenda, figure out what markets interest us, where there are possibilities and separate the ideological and political from trade and economy," said Gary Rodriguez, general manager of the Bolivian Foreign Trade Institute.

Bolivia shipped just $5,291 in goods to Cuba last year, making Cuba the 88th-largest Bolivian export market, according to the institute. Venezuela is Bolivia’s fifth-largest market, accounting for $167 million of Bolivia’s $2.7 billion in exports.

Associated Press writers Fiona Smith in La Paz, Bolivia, and Natalie Obiko Pearson in Caracas, Venezuela, contributed to this report.

 source: AP