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T&T, Venezuela trade still limited
In 2016, Venezuelan trade officials visited T&T seeking to boost trade between both countries.
While the two energy-based economies are well known for their gas relationship, other areas of trade were discussed.
The Venezuelans also took the opportunity to begin talks to import foodstuff and other goods from T&T that have been in short supply in Venezuela.
Like T&T, Venezuela’s energy dependent economy is in a deep recession.
The effects of this recession have led to a gross domestic product (GDP) decline of 17 per cent in 2016, high inflation and a shortage of some basic goods.
The Business Guardian sent Christopher Alcazar, president of the Manufacturers’ Association (TTMA) some questions to see how far the business relationship has evolved since Venezuelan officials visited in 2016.
“As far as the TTMA is aware, very few food companies were actually able to establish trade into Venezuela from the discussions of 2016 and even fewer continue to trade to this day due to complications with the process and delays in receiving payments from Corpovex,” he told the Business Guardian by email on Monday.
The Venezuelan Corporation of Foreign Trade (Corpovex) is responsible for the importing of all goods managed by the State.
When asked what local companies still trade with Venezuela, he said he preferred not to give the names at this time.
Arawak was one of the eight local companies in 2016 that began exports to Venezuela.
On August 6, Venezuela’s Government-managed “CLAP”—the Spanish acronym for the local supply and production committees—posted on its Twitter account that 5,000 tonnes of food and other basic products from T&T had arrived on Venezuelan ports.
To help solve the shortages of basic products there, the Government set up neighbourhood committees around the country which deliver boxes of grocery supplies and other basic products to people’s houses at subsidised rates.
CLAP is in charge of this distribution.
In June 2016, Venezuela’s vice minister of domestic trade, Colonel Renier Urbáez visited T&T.
Speaking to local media at the Piarco International Airport during his visit, he said that food supplies would be sent to the eastern state of Sucre first and, subsequently, to other regions of the country.
The day before he spoke to the local media, 12 tonnes of rice were sent on a first trip, which left just after midday, along with 33 tonnes of chicken, which consists of 16,000 heads of chicken.
At that time the Ministry of Trade and the TTMA had expressed confidence that it would be an opportunity for the local manufacturing sector, especially during the economic recession in T&T.
Ramesh Ramdeen, CEO of the TTMA, told the media then that: “This generating of foreign exchange would help manufacturers to source their raw materials for production.”
Alcazar said that the ability of T&T’s manufacturers to export to foreign markets, especially during an economic slowdown, is important.
Venezuela’s population of 32 million can also provide opportunities for the local manufacturing sector.
“Being able to establish sustainable trade with a country as large as Venezuela has massive benefits to local manufacturers and our nation as a whole. Foreign exchange earnings will grow which can help offset our current shortage.”
He also explained how increased production helps the local economy.
“The additional production presents the opportunity to increase employment locally, as well as lower your overall cost per unit which can assist to control inflation on food products produced locally for citizens. This also can help manufacturers be more cost competitive to export further into other countries.”
He also highlighted what the consequences would be if there is a slump in local production.
“On the contrary, with the slump of the local economy and reduced demand, producing less in the same factory translates to a higher cost per unit which eventually leads to either downsizing the factory and staff to suit demand or increased prices and becoming less competitive in the export markets.”
He reiterated that this is part of T&T’s strategy to continue to diversify the economy.
“All of this wraps up into our drive as a country to move away from our dependence on oil and gas revenues and supports a key point which is to strongly support local manufacturers today for our future and children’s future.”