The Guardian 25 May, 2005

Venezuela and Cuba build trade pact

WT Whitney

As the Bush administration bullies countries into signing "free trade" agreements — huge profit makers for corporations at the expense of all workers — Cuba and Venezuela signed a massive package of agreements that seek to develop their countries and meet human needs.

On April 28, Venezuelan President Hugo Chávez and Cuban President Fidel Castro celebrated the signing of 49 joint agreements in commerce, energy and oil, finances, agriculture, communications, banking, health care and education. These agreements are part of an alternative economic and trade vision for Latin America called the Bolivarian Alternative for the Americas (ALBA). Highlights of the 49 agreements include:

  • The state-owned Venezuelan oil company PDVSA will prospect for, pump and refine Cuban oil. It will open a new headquarters in Havana for Caribbean refining operations and oil distribution. PDVSA and the Cuban oil company Cupet will build a lubricants plant, a shipping terminal and a storage facility in Cuba, plus complete an unfinished refinery.

  • The state banks of each country will set up branches in the other. The Venezuelan bank will set up joint ventures with Cuban Ministry of Internal Commerce.

  • Venezuela will continue sending low-cost oil to Cuba. Shipments have recently risen to 80,000-90,000 barrels a day.

  • Venezuelan businesses will sell consumer items in Cuba, and Cuba will be opening stores in Venezuela.

  • Importers and exporters from both countries were declared free of tax and tariff obligations.

  • Cuba will expand medical programs in Venezuela that reduce Cuba’s oil payments by $1 billion each year. These include a new total of 20,000 doctors and 10,000 technicians, 600 new diagnostic centres and 600 rehabilitation centres. Cuba will train 60,000 Venezuelan doctors and technicians. Thousands will be studying in Cuba.

  • Venezuelans will continue to receive specialised medical treatment in Cuba. The numbers will rise into the tens of thousands.

  • Development projects are planned in both countries involving plant and animal health, tourism, sports development and agricultural education.

  • Cuba will continue its support for Venezuela’s literacy program. So far 1.4 million people have been taught to read there.

    Cuba and Venezuela are the only countries currently enrolled in ALBA, but others are using the ALBA model for transactions in kind, rather than in money. Venezuela, for example, exchanges oil for cattle with Argentina. Venezuela and Brazil are working on a shared media network, a social development fund and plans for oil sales that leave out the usual 30-50 percent charge hike that applies to private corporations.

    At the agreement celebration, Castro charged that the Free Trade Area of the Americas has atomised into bilateral US agreements with other countries, like CAFTA (Central American Free Trade Agreement). FTAA "is dead; the ALBA is coming", he said.

    Called "NAFTA on steroids" by its critics, FTAA is a massive hemispheric trade agreement that would enhance the economic and political power of US monopolies throughout the Americas. It would involve all countries except Cuba. However, the US is facing stiff opposition from other countries and from US unions, environmentalists and anti-globalisation movements, and its goal of having FTAA in place by January 2005 met with failure.

    Concerned by the growing left-oriented governments in the region, the Bush administration is continuing attacks on both Cuba and Venezuela. Castro quoted US Under-secretary of State Otto Reich, who said, "With the combination of Castro’s evil genius, experience in political warfare and economic desperation, and Chávez’s unlimited money and recklessness, the peace of this region is in peril.… We have to be careful that our home, the Western Hemisphere, is not undermined through political warfare guided by a couple of self-described revolutionaries who also lead increasingly failed states."

    At the closing session of Cuba’s Fourth Hemispheric Conference against the FTAA, held at the same time the ALBA agreements were celebrated, Chávez declared that ALBA will promote the "the social state in the interests not of elites, but of the people. … Now truly the dream of Bolivar is beginning to move toward fulfilment."

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