Skip to comments.Venezuela & USA: Has the lion awakened?
Posted on 02/14/2005 3:02:09 PM PST by Bald Eagle777
After six years of stoic tolerance, the United States is awakening from the lethargy with which it has responded to President Chávez continuous verbal attacks. Perhaps it is beginning to see that it ought to take notice of the pronouncements made by this revolutionary, as, where Chávez is concerned, there seems to be no slip twixt cup and lip.
The Bush administration is also beginning to realize that the influence of the Venezuelan president, supported by his ally Fidel Castro, could affect the peace and stability of Latin America.
Until recently, the U.S. Presidents response to President Chávez constant verbal attacks was condescending, weak even. Now the tone is changing. The first sign of this was a statement by Secretary of State Condoleezza Rice assuring that there was nothing positive to highlight in the Bolivarian revolution, classifying the Chávez administration as a negative force for the region and urging Latin American countries to take note of what is happening with democracy in Venezuela.
The second was the claim by U.S. Assistant Secretary of State Roger Noriega that it would take his country only a few weeks to find a substitute for Venezuelan oil, but that it would take Venezuela years to find buyers for its crude, words that sound almost like a warning that the United States can live without Venezuela, anticipating Chávez intention of using oil as a political weapon.
The third came from an unidentified officer at the Department of State who said, when referring to the Venezuelan governments purchase of MiG 29s from Russia, we shoot down MiGs. Thats straight talking.
And the fourth is the formal complaint that the United States submitted this week to Russia regarding the sale of 100,000 Kalashnikov Ak-47 assault rifles to Venezuela. This protest was accompanied by a statement from Department of State spokesman Adam Ereli, in which he expressed Washingtons concern over the sale of weapons to Venezuela and their potentially destabilizing effect in the Hemisphere, claiming that these weapons could end up in the hands of the FARC, because these groups operate in that country.
All this points to the opening of a new phase in relations with the United States, with serious implications for Venezuela.
No question Chavez will be a problem in the near future. He needs to go and soon.....
This guy reminds me of Ghaddafi in the 80's.
"Reach out and *touch* someone..."?
Armalite AR-10 7.62 x 51mm (.308cal) or Barrett M82A1 .50cal BMG? Several Class III Options. Lotsa Leupold Glass.
I got both; name yer poison, c.
Cool, Lets Go, You have to buy the Beer though.........
but do you have 100,000 of them to make Russia compete..lol
and you know, President Chávez, probably drives a SUV
One each, s; what do I look like? The US Goobermint, using your tax dollars, to entice competition, at a loss? And declare it a victory? Duh.
If we lose Venezuela we'll lose Columbia. Bye-Bye South America.
Oil-seeking China steps on US toes
The United States has long regarded Central and South America as part of its backyard; and Canada as an extension of its front porch.
But recent forays by China into the Western Hemisphere are challenging US influence. They are part of Beijing's frenetic global search for large supplies of oil-based energy.
The search has recently taken it to Canada and Venezuela, which together provide about 25 per cent of US oil imports.
While China is not yet buying oil that might otherwise have gone to the US, the Bush Administration is watching closely as state-owned companies from China clinch long-term supply deals in the neighbourhood that could threaten America's energy security.
Reflecting this concern, the US Government Accountability Office - the non-partisan investigative arm of Congress - last month began a study of the risk of potential oil supply interruptions from Venezuela, which is the source of over 10 per cent of US crude oil imports.
Meanwhile, Canada and China on January 20 signed a joint Statement on Energy Co-operation in the 21st Century during a visit to Beijing by Canadian Prime Minister Paul Martin.
It opens the way for Chinese firms to establish partnerships with Canadian energy companies.
A month earlier, Venezuelan President Hugo Chavez said in Beijing that he had signed agreements that would allow Chinese companies to explore for oil, set up refineries and produce natural gas in the energy-rich South American country.
The deal came amid escalating tensions between Caracas and Washington, as the leftist Chavez vowed to reduce Venezuela's dependence on the US oil market by broadening its customer base.
In the six years he has been in power, Chavez has threatened on several occasions to cut off oil supplies to the US in response to what he asserts are persistent attempts by Washington to meddle in Venezuela's internal affairs.
Beijing wants to diversify energy sources for the rapidly growing Chinese economy, as domestic oil output declines and concerns about over-reliance on the volatile Gulf grow.
Venezuela has the Western Hemisphere's largest conventional proven oil reserves. It sells 60 per cent of its crude oil exports to the US and is America's fourth-largest supplier.
Canada is the largest. Huge deposits of oil sands in Alberta province make up the vast bulk of Canada's total proven crude oil reserves of almost 179 billion barrels, the second biggest in the world behind Saudi Arabia.
Oil sands contain black viscous oil. They must be mined and the oil processed before it can be burned as heavy fuel oil or refined into petrol and diesel fuels.
Until now, the sands have been uneconomic. But with oil prices above US$40 ($56.11) per barrel and likely to stay high, and with advances in recovery techniques, the economics of extracting oil from the sands are becoming more attractive. This has caught China's eye.
A joint statement issued on January 20 says Canada and China have decided to work together to promote co-operation in the oil and gas sector, including Canada's oil sands, as well as in the uranium resources sector.
The two sides have set up a joint working group on energy co-operation and will encourage their companies to establish partnerships in these sectors.
One such project is a plan to build a pipeline at a cost of over US$2 billion from Edmonton, the capital of Alberta, to the Pacific coast for shipment of oil to China.
But it will not be plain sailing for Chinese energy companies in either Canada or Venezuela.
Martin's minority Government is coming under pressure to safeguard Canadian resources.
His Industry Minister, David Emerson, has said he is concerned that enterprises owned or controlled by the Chinese Government may not be entirely market motivated.
He is looking at how to strengthen the investment law to protect Canadian interests when foreign entities buy domestic firms.
Chinese companies have agreed to invest US$350 million in 15 oil fields in Venezuela and US$60 million in a gas venture, and to import 120,000 barrels of Venezuelan fuel oil a month.
Refineries in China will have to be refitted since most cannot process the heavy crude oil exported by Venezuela. This may take several years. It is also more expensive to ship oil to China.
Despite these obstacles, some US officials and analysts are worried.
"Every barrel of oil China buys in the Americas means one less barrel available for the US," says Gal Luft, executive director of the Institute for the Analysis of Global Security in Washington, DC.
"This means that the US will have to be more reliant on oil from more remote and less stable regions, primarily West Africa, the Caspian and, above all, the tumultuous Middle East."
And I suppose you two fine chaps fancy that the Bush administration is clueless.
Oh, and welcome to FR.
Rice: nothing positive to highlight Well put.
"We shoot down MIGs"... Interesting off the record message, gets the point across. Using oil to black mail the U.S. isn't intelligent. Also opening up the possibility to get a large quantity of AKs into the hands of Marxist guerillas who terrorize innocent civilians isn't particularly smart either. I doubt they have the technological infrastructure to service the MIGs long term (without Russian "advisors" helping), or the skilled pilots for that matter. Should they get airborne we can clean them up pretty quickly, plus the airfields.
AWACS help, of course, wherever we can get these deployed. Not everywhere yet, sadly. Russia and China do have different areas in which they feel they can quiety use leverage against us.
Red Hook Blondes, Yum, Yum makes a mission fun!
That is one of the most misleading statements I've seen.
Of course, oil sands contain black viscous oil!
Oil sands also contain Saudi Light, the most crackable oil in the world!
The author misleads first by talking about Venezulean Heavy then leads right into Alberta oil sands as if they're one and the same!
China soaking up our share of Venezulean oil doesn't have a lot of impact. China has a lot of roads to pave.
China acquiring any of our share of Canadian oil is very serious. I would hope the diplomatic messages are flying fast and furious.
The State Department? Our State Department?
Yes! They can be taught!
Whoever this person is (I won't exclude the possibility that it is 44) I like them A LOT!!
Let the little dick-tator try an dodge 750 gr APIT for a while....that'll shut him up. Hopefully forever.
Bada bing, bada BOOM!
We shoot down MiGs......
Is that an indication of a major sea change at State!?!?!?
Well 100,000 guns would be sent via ship, ships sink you know....
How about you circulate some Kalashnikovs that explode when used or bullets that exlode and cripple the user when fired.
-good times, G.J.P.(Jr.)
The insurgants in Iraq and in Palestine armed with AK's are totally ineffective. The rifles merely provide aimed fire fodder.
It will be more so in the occident. No training and ineffective leadership is a perscription for death.
No. Let them get through.
Russia is simply providing Chavez with the opportunity to give the US casus belli.
It would be bad form to grease the little tin horn without sufficient provocation.
Dang, now my itchy finger is trigger..
Well, it's a "brute force" weapon - doesn't need the constant maintenance of the M-16 or M-4 and is dirt cheap to produce and manufacture. It'll fire even if submerged in water (no need to tie condoms to the muzzle) and even if a lot of dirt is present in the barrel.
Which is why it is the chose weapon of the undisciplined mobs and guerillas from Somalia to Mindanao.
Sure, the M16/M4 is much more accurate, and I believe is a better weapon - but this is only because of the training and discipline of the US fighting forces. Drop that puppy in the mud and you're in a load of trouble. Keep it clean and it'll get the job done each and every time.
Where is the Cia's elite assassination squad when you really need them?
This is a poorly written article, riddled with errors and false assumptions.
First of all, the petroleum market is GLOBAL. Just because China may purchase 100,000 barrels of oil from Venezuela doesn't mean the US is losing 100,000 barrels. That 100,000 barrels is still in the global market and any nation can pick it up as long as they're willing to pay the price for it.
What China is trying to do is get partnership deals with other oil-rich nations. This means it will invest a certain amount of money to develop the resources and in exchange will receive a percentage of the oil as well as receive a preferential treatment for oil resources if needed.
IOW, China then (depending on the agreement) becomes part owner of the pumped oil. Consequently, it will have first rights to that oil in case it's needed and it can acquire a percentage of the pumped oil at below market rate (or a certain amount for free). After all, that's fair. Whoever invests in the field deserves to benefit from their investment.
So, if China will be unable to acquire oil on the open market for whatever reason, at least it will have the security of a reliable supply since it then is part owner.
Why then is this such a problem? Who seriously believes China will be able to receive any oil from Canada or Venezuela or anywhere else if it ever enters into a military conflict with the US?
Besides, these stakes are always subject to nationalization and confiscation since China won't have the ability to prevent the host nation from seizing its assets in case of a conflict. Anyone remember the nationalizations in Mexico, Saudi Arabia, Venezuela, Iran, Iraq and elsewhere when foreign oil companies lost their investments?
A second problem with this article is its information concerning the Alberta oil sands.
FWIW, there are 2.5 trillion barrels of oil locked away in the oil sands and 300 billion barrels of which are recoverable using today's technologies. The enormity of the oil sands is hard to fathom - it is as large as the entire state of New York.
The profitability of the oil sands is actually much lower than the $40 figure cited in the article - Syncrude, Suncor and the other producers break even at around $13/barrel give or take $2 (IIRC). We can thank new techniques like SAGD and carbon injection for that.
Additional technologies will push the cost down further and it is anticipated the cost per barrel may go down to as low as around $8. IOW, roughly comparable to deep-sea oil.
Lastly, SCO, the refined end product of bitumen heavy oil is a marvelous product and in fact is better than the sweet crude from the North Sea and the Middle East.
I happen to be a strong advocate of the need to expand the Alberta oil sands - I want to see production increase to over 10 mmbd by 2020 so that the US will no longer need to rely upon Middle Eastern oil. Actually, I want to see Western Canada become part of the US ...
You totally missed the point of why I dropped that article for the edification of all.
I knew this guy would be trouble when he was elected. It's too bad we didn't just take him out when he was first elected. We can't let him get stronger.
Jungle CQB, FARC and their fellow travelers South of the Border are trained and operating in terrain in which they have intimate knowledge. AKs and potentially AN94s and SVDs may be more effective at close range in ambush conditions, don't write those off. Mud, sand, dirt.. Does anyone really think these guns will NOT jam in close quarters jungle fighting?? We need to keep a TIGHT lid on the left wing insurgency, which may in fact be stoked by China, Russia and AQ, regardless of motives (even cash or "get" the USA..). Also, "advisors" unhelpful, whether Russian or Chinese. They are not welcome in our back yard. The AKs and MIG 29s are extremely important as would be any attendant or follow-on advisory capabilities which "may" be part of that package. The amount of troops required to totally pacify certain unspecified jungle areas would be mind boggling and has the potential to make Nam look like a walk in the park, IF this sensitive situation is not handled with extreme care.
Has anyone noticed, in the news that AQ has been attempting to recruit gangs like MS-13 (El. Salv.) and others? Watch that pattern carefully. (Yes, that does impact the border issue somewhat).
Oil is not the primary issue here, yet Chavez perceives this as an item of leverage/blackmail.
Watch and see what happens. We have a little geopolitical/strategic Puzzle Palace on our hands here, right in "our" own supposed back yard.
We can thank that SOB Carter for Chavez.
And China came A-COURTING
IAN ALLEN/STAFF PHOTOGRAPHER - Exhibits at the China-Caribbean Economic Forum and Trade Fair at the National Arena recently.
THE CHINESE arrived in Jamaica amidst much fanfare. They came because they are resolute in maintaining their quest for long-term strategic and sustainable development goals. These include: sustainable economic growth, institutional and human capacity building, to dominate world trade in goods, to be the additional member to the Group of Seven (G-7) and to be among the elite executive directors with special voting powers, on the board of the International Monetary Fund (IMF). However, there are pre-conditions to the attainment of these goals, and one such goal is its impact on the world economy. The mechanisms to these pre-conditions include strategic positioning or free access to free trade areas without violating trade rules.
The Chinese are a trustworthy and tough negotiating nation, and they will keep their word. The robustness of the Chinese economy is a manifestation of mutual trust and respect shared among the international community coexisting with a disciplined and smart Chinese society.
The Chinese kept their word that "under the terms of Joint Declaration Agreement signed by Margaret Thatcher and Deng Xiaping in 1984, Hong Kong's economic system will remain in place for another 50 years." (The Gleaner, June 30, 1997). Hong Kong was returned from British rule to mainland China on July 1, 1997. Instead of imposing its socialist policies on Hong Kong, the Chinese adapted Hong Kong's capitalist system and their way of life and used it as a catalyst for transformation. Previously, China skilfully crafted a gateway through Hong Kong to the international community for trade in goods and services. It was not difficult therefore, for contemporary China to understand that "in order for capacity building to serve as a catalyst and social protection regimes it needs the support of comparative historical experience as points of reference for lesson drawing." (Edwin Jones 1997 working paper). Undoubtedly, China's successful transformation from idealism to realism
may be as a result of the lessons drawn from the Hong Kong experience.
AN ECONOMIC POWERHOUSE
On Wednesday February 3, 2005, a high powered Chinese delegation began a three-day visit to Jamaica. The Chinese delegation included: Mr. Zeng Qinghong, vice-president of China, Madame Ma Xiuhong, Chinese vice-minister for Commerce, and An Min, Chinese vice-president for commerce (The Gleaner, February 3, 2005). Proponents have expressed the view that this visit is an indication that China wants stronger ties with Jamaica while others have stated that this will boost our tourist arrival. These simplistic views are inconsistent with China's long-term strategic and sustainable goals; therefore we need to make a critical assessment of the reasons the Chinese came to Jamaica.
China is indeed a global economic powerhouse and it is their policy to further extend their economic dominance. As at October 2004, the US trade deficit with China stood at US$16.8-billion. China accounts for 10 per cent of total US trade. China is the European Union's (EU) biggest customer. The EU has a trade deficit of more than41-billion (US$53-billion) for the first ten months of 2004. In Jamaica, we have seen evidence of the Chinese dominance in our markets. With surging exports China is currently experiencing a six-year high trade surplus of US$31.98-billion.
Critics have argued that China's strategy to peg the yuan at 8.28 to the U.S. dollar for more than a decade has artificially placed many economies, including the US and the EU at a comparative disadvantage; also, the peg is offering foreign investors exchange-rate stability when investing in China. Critics further argue that the yuan is undervalued by approximately 40 per cent and this makes China's exports artificially cheap. Additionally, China's massive subsidies are boosting its comparative advantage.
There should be no doubt that the reasons given for China's visit to Jamaica are either superficial or deceptively pragmatic. It is well established that China is strategically establishing a commercial presence, not just in countries, per se, but in free trade areas ultimately. There are two obvious reasons for this move: firstly, to avoid the 'Common External Tariff' (CET) and secondly, to be consistent with the 'Rules of Origin Agreement' under the World Trade Organisation (WTO). The CET is a common tariff against non-members within a free trade area, while members enjoy free trade. The Rules of Origin Agreement are the criteria used to define where a product was made. They are an essential part of trade rules because a number of policies discriminate between exporting countries: quotas, preferential tariffs, anti-dumping actions, countervailing duties, and more. As long as China establishes a commercial presence in Jamaica before the establishment of the CARICOM Single Market and Economy (CSME), China's goods will be automatically exempt from the CET. We should note, however, that this commercial presence cannot be a distribution centre, instead, a manufacturing plant is preferred in order to fulfil the criteria for the Rules of Origin Agreement.
Interestingly, a commercial presence in Jamaica or Haiti would not only allow China tariff free access to a regional market size of 14.5-million, but to a larger market, that is the Free Trade Area of the Americas (FTAA), which is approximately 750-million. This is China's long-term strategic goal which they are hoping will be facilitated though remaining unnoticed by the Jamaican trade negotiators. It must be noted also, that China is currently negotiating with the Association of South East Asian Nations (ASEAN), a free trade area, for membership. If China is successful, the outcome will be a potential market size of 2.1-billion, which would be the largest free trade area in the world.
THE COST OF LIBERALISATION
Jamaica has entered a new phase of liberalisation, and with liberalisation there are costs and benefits. The extent to which an economy benefits from liberalisation is largely dependent on its institutions and systems, productive capacity, environmental scanning techniques and the core values of its politicians and trade negotiators. China's commercial presence in Jamaica will impose costs and benefits to the region. Some domestic production and jobs will be replaced; however, consumers are likely to benefit from lower prices in the long-run. It is highly likely that there will be significant loss to Trinidad and Tobago's manufacturing sector, but T&T can be compensated from an oil deal with China. We should note that China will not only compete in our markets, they will complement our markets by adding new products and this will lead to a wider variety of choices for our consumers.
Depending on the phase of the negotiations thus far, Jamaica should emphasise at all times, joint ownership with the Chinese. The Chinese should not be allowed more than 49 per cent ownership of any project in Jamaica. The Chinese believe more than anyone else in joint ownership and they have made it absolutely clear in their Schedule of Commitments to the General Agreement on Trade in Services (GATS). The Jamaican negotiators must also strongly emphasise a time table for 'value added', that is, the transfer of skills and techniques from the Chinese to our Jamaican workers. This methodology is not new as it was featured strongly in Sir. W. Arthur Lewis' model on the Industrialisation of the British West Indies, which was recommended to Jamaica 50 years ago.
ECONOMIC COLD WAR?
China's high level visit to Jamaica prompted certain sensitivities and we respond to them. With the US being the most powerful economy in the world, and Brazil as the third largest economy in the world, both at loggerheads over the establishment of the FTAA, on the one hand, and the emergence of China in the region, on the other hand, all three nations are supercharged for an economic cold war. China's timely visit to Jamaica is not coincidental, but it has certainly fuelled a potential economic cold war. However, with the strength of the WTO, a compromise is in the making and Jamaica is at the epicentre of this compromise. Jamaica is geographically placed within close proximity to the U.S., and as such, China will do anything to establish a facility in Jamaica for two reasons: firstly, to maximise its comparative advantage in the western hemisphere, and secondly, to become a member by default of the CSME and the FTAA.
Brazil on one hand would welcome China's presence in Jamaica, because they are at variance with the US over some political and economic issues. Brazil is also expressing distrust with the potential dominance of the US in the FTAA and certain bilateral trade agreements in Latin and South America. The U.S. on the other hand, is neither happy with Brazil's nonchalant attitude towards the FTAA nor China's physical presence in Jamaica. Unfortunately, the US cannot pressure China too much as they are aware of China's influence on the world economy, hence, any unnecessary disruption in the Chinese growth momentum, bearing in mind that the yuan is pegged to the US dollar, the consequences will have serious contagion effect on the world economy. We are all aware of the Asian financial crisis and its impact on the world economy. It is therefore likely that the U.S. will want to target the weakest link and that might be to pressure Jamaica to keep China out of the region. In this case, pressure may be a special consideration.
This is an interesting phase in Jamaica's development within the context of liberalisation, and our negotiators should be firm, knowledgeable and professional in their approach. The high level Chinese delegation that came to Jamaica must not be taken lightly. Indeed, China is not here to host a simple China/CARICOM trade show. They are going through necessary adjustments in their economy. They are under pressure by the finance ministers of the G-7 to remove the peg from the yuan to the US dollar and operate a flexible exchange rate regime. They are also being pressured to revalue the yuan by as much as 40 per cent. If this happens it will affect their long-term growth momentum.
China's move to Jamaica is highly calculated and strategic. China is relatively weak in trade in services and financial markets; indeed, they are currently experiencing a trade deficit in services. Any disruption in trade in goods will burst the Chinese bubbles. They have promised the G-7 another 10 years before they revisit the peg, they have kept their word in the past and so no one doubts their sincerity.
Now we do understand the complexities surrounding the high level delegation of the Chinese visit. In the midst of these three economic and political powers, Jamaica should use its leverage. We must remember that we need to increase production and productivity, in order to make jobs available for even those who have been deported and also to compensate for reduced revenues from our banana exports. It is to this end that the Jamaican negotiators should strengthen the coalition and negotiate in the interest of our Human Development.
That it can go for weeks and many firings and still operate at all are a clear advantage when the people using it probably don't understand much about it's inner workings. Also, even if they had the necessary cleaning materials, actually using them to clean the weapon wouldn't be very high on their priority list. Especially if they could sell them for drugs or more ammo.
He needs to go...soon.
Is it a mere coincidence that they mirror our every move? Do they think they can get away with being the naughty child who has just been caught with his hand in the cookie jar? Why the socialists here at home ignore the threat? Do they have something to gain?
Your insinuation that just because I'm new means I'm sort of disruptor, when in fact I'm an ardent anti-communist, is insulting.
I am happy to see that this stance of the US is being made public. There has been a growing problem in this area of the world that we have (apparently from the news attention) been relatively neglecting. It is good to see this is actually getting some attention.
Ignore the insulters, and welcome!