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The first business round between Venezuela and Chile, to be held in the Island of Margarita the last week of April of 2005, and which was agreed in Santiago by the Venezuelan Bank of External Commerce (Bancoex), and Pro-Chile (a governmental agency that promotes international commercial relations) seeks to open spaces in the economy for medium and small job-generating businesses.

At present, trade between both nations totals 280 million U$ per year, but there is enough potential for this amount to rise to 2 billion U$ in five years “if we start right now”, explained Víctor Alvarez Rodríguez, president of Bancoex, upon concluding a tour through South America that included Brazil, Uruguay, and Argentina.

Job-generating businesses

“This unprecedented encounter of 200 firms (25 exporters and 25 importers from each country) is a sign of Venezuela’s effective incorporation into Mercosur, and will integrate hundreds of medium and small businesses to a process of reactivation of the economy”, said Alvarez. Venezuela has already held a business round with Argentina, and will hold another one with Brazil in November.

The initial goal of this first major bilateral business round, is to increase trade to 500 million U$ in 2005,and to a range between 1.7 and 2 billion U$ in five years, if both countries go ahead with a process of substitution of current imports from other nations. If Venezuela and Chile integrate their imports reciprocally, by replacing purchases from other markets with products from these two countries, total potential Chilean-Venezuelan trade will surpass 4 billion U$, explained the president of Bancoex.

Improvement of political relations

The reactivation of the commercial overture between both countries is a result of the evident improvement in their political relations in the last few months. Alvarez visited Chile with Foreign Affairs Minister Jesús Arnaldo Pérez, who had an interview with President Ricardo Lagos-expected to visit Venezuela in April.

Simultaneously, this bilateral process will help clarify some pending items in the agreement subscribed a decade ago, which include a compromise by both parts to avoid double tax payments (by exempting those companies that pay taxes in their own country from paying taxes abroad), and to minimize their list of exceptions.

Pérez, who had previously visited Uruguay, also held meetings in the Ministry of Foreign Affairs, reassured the minister of Internal Affairs, José Insulsa, of Venezuela’s support of an eventual Chilean candidacy in the OAS, and also visited Luis Castellón, president of the Energy Commission.

Venezuela supplied propane gas to Chile until 1995, transported in 45 thousand ton tankers, according to the Venezuelan state owned oil company Pdvsa.

Published in Quantum N.37