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Venezuela says it will pull out of G-3

May 21, 2006

Venezuela Says It Will Pull Out of G-3

Associated Press Writer

CARACAS, Venezuela (AP) — President Hugo Chavez said Sunday Venezuela will pull out of a trade bloc with Colombia and Mexico, its latest move to abandon trade deals with countries that have free-trade pacts with the United States.

Chavez said he was withdrawing from the so-called G-3 bloc to "safeguard the national interest" as Venezuela joins another trade group, Mercosur, with other left-leaning governments including Argentina and Uruguay.

"We have already decided to leave the so-called G-3," Chavez said in his weekly TV and radio program, broadcast from the eastern state of Bolivar.

Chavez last month pulled out of the Andean Community trade bloc because Colombia and Peru - two of the group’s four members - signed free-trade deals with Washington.

Chavez has said Colombia’s free-trade deal with the U.S. threatens to flood Venezuela with cheap U.S. imports that would harm local industries.

Chavez’s opponents say that argument is flawed, noting Venezuela already imports large amounts of basic goods from the United States. Venezuela is also a major crude oil exporter to the U.S.

Mexico is part of the North American Free Trade Agreement with the United States and Canada.

Chavez said the G-3 was formed in 1995 "under a scheme of the purest neoliberalism" - a free-market economic philosophy that the leftist leader says is detrimental to the region.

Chavez said he had ordered his foreign minister, Ali Rodriguez, to proceed with the formalities to withdraw from the trade bloc. The possible effect on cross-border trade between Colombia and Venezuela remain unclear.

Diplomatic relations between Mexico and Venezuela have been in limbo since November, when both governments called home their ambassadors during a highly public and personal spat between Chavez and Mexican President Vicente Fox over proposed U.S. free-trade pacts.

The Venezuelan leader has said he is aiming for a new sort of regional integration based on socialist principles, while his opponents in Venezuela and abroad have accused him of dividing the region with sharp and uncompromising rhetoric.

Chavez, along with his close friend Cuban President Fidel Castro, has proposed a decidedly anti-capitalist trade bloc for the region, which Bolivia also has joined under newly elected President Evo Morales.

 source: AP