By halifaxwebcam March 7, 2014 Leave a Comment

venezuelaDiplomatic relations between Canada and Venezuela began in 1948 when the Canadian Consulate General opened in Caracas, Venezuela. The Consulate was updated to embassy within a short time and is now the Embassy of Canada in Venezuela. The Embassy of Venezuela in Canada represents Venezuela’s consular interests. Venezuela depends on imports for approximately two-thirds of its food requirements.

 

According to the Government of Canada website, Venezuela.gc.ca, trade between Canada and Venezuela totaled $1.34 billion in 2010. The main exports from Canada during that period included wheat, vegetables, soybeans, paper and paperboard and machinery. Product imports to Canada from Venezuela included oil and aluminum oxide.
 
A 2013 report by Canada International shows that trade between the two counties totaled 1.37 billion. Between the years 2010 and 2013 trade between Canada and Venezuela increased by a small margin.
 
Since President Nicolas Maduro took office in Venezuela almost a year ago, inflation has increased over 50 percent and Venezuelan food shortages are an ongoing problem. The EDC, Canada’s export credit agency, has reported that doing business with Venezuela is risky. EDC places the blame on high inflation, excessive oil dependence and other factors. Canadian exporters and investors have shown a sharp decline of interest in that market because of the deteriorating economic situation.
 
The Canadian Trade Commission Service, TCS, issued an advisory in 2011 that was updated in 2013 related to Canadian seed potato exporters. The advisory stated that Venezuela is experiencing logistical and handling problems. Exporters were advised to take precautionary measures to avoid the high financial risk of exporting their crop due to delays and the potential for Venezuelan authorities to reject or destroy the shipments.
 
The TCS noted that exporters could minimize the financial risks by conducting the sale on Free on Board, meaning that the buyer pays for the transportation of the goods, in a Canadian port. It further recommends that an irrevocable letter of credit be obtained from the purchaser.
 
The letter of credit should be issued by an international bank and be payable after confirmation that the merchandise is received by the shipping company. In addition to these recommendations, TSC states that contracts written according to Canadian laws rather than Venezuelan law.
 
It does not appear that Canada is seeing many adverse affects from the deteriorating economy in Venezuela. It does appear that exports to that country may change in the near future if the situation continues to deteriorate and exporters and investors interest in the Venezuelan market continues to decline. The current state of Venezuela, however, is definitely affect other South American countries… like Peru.

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