BOLIVIA JOINS CUBA, VENEZUELA IN ‘ALTERNATIVE’ TRADE PACT BEFORE MOVING TO NATIONALISE NATURAL GAS SECTOR
Bolivian President Evo Morales on 29 April joined Cuba and Venezuela in a trade agreement whose stated purpose is to combat US leadership in the region by promoting a socialist version of integration.
Morales’ support for the so-called "Boliviarian Alternatives for the Americas" (ALBA), originally signed by Cuba’s Fidel Castro and Venezuela’s Hugo Chavez in 2005, is another blow to the Andean Community, a Latin American trade bloc already weakened by Venezuela’s recent departure, in addition to recent bilateral deals between several of its members and the US.
Although ALBA appears to consist mainly of political and economic rhetoric, a separate pact signed the same day will have Venezuela send cheap oil to Bolivia and set up a USD 130 million fund for development and social programmes; Cuba said it would send doctors and teachers to the Andean country. The ‘People’s Trade Treaty’ also commits Venezuela and Cuba to purchases of Bolivian soybeans.
After signing the deals, the three presidents expressed hope that they would provide an alternative to US-led trade integration in the region. Describing negotiations on the Free Trade Area of the Americas (FTAA) as a US effort to "annex" Latin America, Castro added that "the best defense is to counter-attack and this is what we have done."
Two days later, on 1 May, Morales moved to nationalize Bolivia’s natural gas reserves, Latin America’s second largest. The decree issued by the Bolivian government gives gas companies six months to renegotiate contracts and revenue-sharing agreements, or face expropriation. Bolivia is currently a major regional gas exporter; it produces half the natural gas consumed by Brazil. The presidents of Argentina, Brazil, and Venezuela are set to meet Morales on 4 May to discuss the decree. Spain, another major foreign investor, is also said to be seeking talks with Bolivia.
New developments in Bolivia’s nationalization of its hydrocarbons sector will be covered in upcoming issues of BRIDGES Weekly.
ICTSD reporting; "Cuba, Venezuela, Bolivia sign trade deal," AFX, 30 April 2006; "Cuba, Bolivia, Venezuela Reject U.S. Trade," AP, 29 April 2006; "Bolivia Signs Pact With Cuba, Venezuela," AHN, 2 May 2006; "Cuba, Venezuela and Bolivia cement left alliance," REUTERS, 29 April 2006; "Chavez casts a long shadow across region," FINANCIAL TIMES, 3 May 2006; "Bolivian decree could prove less troublesome for oil groups than feared," FINANCIAL TIMES, 3 May 2006; "Spain to open talks on Bolivia action," THE TIMES, 4 May 2006; "Adventurism in the Andes," CHRISTIAN SCIENCE MONITOR, 4 May 2006.