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IMPORTANT: As of July 1st, 2011, functions once performed by the Wisconsin Department of Commerce have been moved to other state agencies and the Wisconsin Economic Development Corporation. The former Commerce web site will continue to exist for the next several months as resources are moved to new web site locations. We will make every attempt possible to direct our users to the new locations as web resources are moved.
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PO Box 7970
Madison, WI 53707-7970
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Vol.
8 #1, September 2008
Venezuelan Updates
On Thursday, September 11, Venezuelan President Hugo Chávez
expelled U.S. Ambassador Patrick Duddy, allowing him just 72 hours to
leave the country. President Chávez claimed that a
U.S.-supported plot to overthrow his government had been
uncovered. The day prior, Bolivian President Evo Morales, an ally
of Chávez, expelled U.S. Ambassador Philip Goldberg, claiming
U.S. involvement and support of rebels in the eastern portion of the
country. Venezuela also recalled its Ambassador to the United
States stating that when a new U.S. administration is in place, the
diplomatic post will be refilled.
A U.S. State Department spokesperson, in a statement available on the
agency’s web site, commented, “The charges leveled against
our fine ambassadors by the leaders of Bolivia and Venezuela are false
– and the leaders of those countries know it.”
Several issues have fueled the tensions between the United States and
Venezuela. The United States has argued that the Venezuelan
government is aiding narcotics traffickers and supporting the Colombian
rebel group known as the FARC (Revolutionary Armed Forces of Colombia),
considered a terrorist group by the U.S. government. Other issues
include the arrival of two Russian bombers for training exercises with
the Venezuelan military, and the prevention of inspections of
Venezuelan airports by U.S. officials. President Chávez
continues to threaten to cut off oil exports to the United States.
Through the second quarter of this year, U.S. exports to Venezuela have
risen 10.23 percent over the same period last year, while Wisconsin
exports have dropped 48.62 percent.
Meanwhile, President Chávez has not slowed his pace of
nationalizations. His most recent takeover target was
Mexico’s cement giant, CEMEX, on August 18. Holcim and
Lafarge, two other multinational cement firms operating in the country,
negotiated compensation deals with the Venezuelan government, avoiding
the seizures faced by CEMEX. The Chávez administration
claims these takeovers, along with the July takeover of the
country’s largest steelmaker owned by the Argentine company
Ternium, will lower costs for these important construction inputs,
supporting their goal of increased home building and infrastructure
improvements. On August 1 President Chávez’s
government announced the acquisition of Banco de Venezuela, the
country’s third largest bank, owned by Spain’s Grupo
Santander.
In 2007 President Chávez targeted the oil, telecommunications,
and power sectors. The Venezuelan operations of Exxon (US),
ConocoPhillips (US), Total (France), StatoilHydro (Norway), BP (UK),
and Chevron (US), were impacted to varying degrees, depending on their
decisions to negotiate with the government or walk away.
CANTV was nationalized after a reportedly fair compensation deal was
negotiated with US-based Verizon Communications, and the government
took over the assets of AES Corp. (US) in the country’s largest
private power producer, Electricidad de Caracas.
-- Susan Dragotta, Commerce Latin America Specialist and Outreach Consultant for Southeastern Wisconsin
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