At Colombia-Venezuela border, a trade revival is eagerly awaited

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CUCUTA, Colombia/SAN ANTONIO, Venezuela (Reuters) – Colombia’s leftist president-elect, Gustavo Petro, pledged on the campaign trail to end neighboring Venezuela’s isolation, normalize relations with the socialist government in Caracas, and get trade flowing.

For locals on both side of the border, that can’t come fast enough.

“It’s extremely important and perhaps vital for our company to have that border open,” Carolina Moros, co-owner of a biodegradable detergent company in Colombia’s border city of Cucuta, told Reuters.

Her company, which she co-owns with another Colombian and two Venezuelans, has seen employee numbers dwindle from 23 to just two in the last year after economic hardship forced them to let workers go.

Petro, who will be Colombia’s first leftist president after he takes office in August, has pledged to fully reopen the border with Venezuela as part of a thaw in diplomatic relations. The timing of the reopening is unclear.

While people can currently cross on foot, vehicles have not been able to transit legally since 2015. Fully opening the border will throw companies on both sides an economic lifeline, business owners and leaders in Colombia and Venezuela told Reuters.

In Venezuela, factories producing textiles, footwear and leather goods, and bakeries, among other businesses, require raw materials that are not available domestically.

Some business owners buy smuggled supplies from Colombia, which raises costs and brings them into contact with criminal gangs.

Opposite Cucuta on the Venezuelan side of the border, in San Antonio, laundry business owner Luis Arias hopes to once again count on legally acquiring the detergents and chemicals he needs.

“The hope is that we can reactivate the border with the help of both governments,” he said.

LONG PROCESS

Trade between the two countries exceeded $7 billion in 2008, but fell sharply after then-Venezuelan President Hugo Chavez froze investment to protest a military agreement between Colombia and the United States.

Trade across the border was worth just $142 million between January and April this year.

Kick-starting commerce will take time, analysts and business owners say, as rules need to be established and confidence restored.

“It won’t be easy for entrepreneurs to invest in the Venezuelan market until they are sure that they can make a return,” said Mauricio Santamaria, director of the ANIF economic think tank.

For instance, payments will initially be demanded in advance, said Noralba Perez, the commercial director of ceramics company Tejar de Pescadero, which made 30% of its sales in Venezuela before the border closed.

Diplomatic personnel will need to be appointed to revive treaties and re-establish norms, said David Silva, a representative of the economic development agency in Venezuela’s Tachira state.

Victor Mendez, director of the Colombo-Venezuelan Chamber in eastern Cucuta, estimated nonetheless that the border reopening could generate 120,000 jobs within a year.

That could be a boon for the economy – and for small business owners like Moros.

    “If we can rebound with new clients and move our goods, which allows us to create jobs, we will contribute to lowering the high levels of informal work in our city,” she said.