Wednesday, April 26, 2006

Morales' TCP

Some time ago, Evo swore that he never would sign a Free Trade Agreement (FTA) with the US, that he would negotiate a Trade Agreement of the Peoples (TCP). The difference, in Evo's words was that the TCP would not be an imposition from the empire and that it would preserve the sovereignity of the countries involved.

Well, today's front page headline is that Evo annouced a Free Trade Agreement with Venezuela and Cuba. This FTA is called TCP. So, Bolivia will have a trade agreement with Venezuela and Cuba, and will be able to sell its products without paying tariffs. Well, any trade agreement is good, but my question is: How is this an alternative to the American market? Most important: Why are both agreements mutually exclusive? Answers below, please.

In terms of figures, Cuba has a population of 11m and Venezuela has a population of 25m. Their PPP per capita incomes are $3300 and $6500, repspectively. So, this is a market that caters for 37m people, with a PPP per capita income of $5521 (weighted average). On the other hand, the American population is close to 300m (is 298m, to be precise) and the PPP per capita income is $42000. From this, it follows that Evo is substituting a huge market, with lots of cash to spend, for a tiny and poor market, where the only person spending (oil) money will be Chavez, to keep Evo screaming about how he defends Bolivian interests with sovereignity and Bolivian soy producers happy. So, if you really had to choose, which one would it be?

Source for the figures: CIA World Factbook.

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Anonymous blogsurfer said...

You're right, they should not be exclusive. I believe it's because of Morales ideology and Chavez instructions.
I read an interesting post to this this topic. I think you have the blog in your roll, anyway, the link is this.

7:00 PM  
Anonymous Anonymous said...

Sorry, but I don't get it: what products are you going to sell when you produce almost nothing, except for oil (Venezuela) and soy (Bolivia). Cuba does not even deserve to be considered in this regard.

Trade agreements are good, when you have stuff to sell.

5:32 PM  
Blogger La Ventanita said...

Cuba not only doesn't have much to sell it also doesn't have much to pay with in terms of credits.

9:24 PM  

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