After removing his country from the Andean Community trade pact earlier this week, Venezuelan president Hugo Chavez took another step today to weaken America's position in regional trade. He and Bolivian president Evo Morales met in Cuba with Fidel Castro, where they signed the "Bolivarian Alternative for the Americas Agreement" (known by its Spanish acronym ALBA) .
The agreement, which is an extension of a previous pact between Venezuela and Cuba, is designed to counter U.S. attempts to drive pan-American trade throughout Latin America and the Caribbean. Unlike the heavily-criticized CAFTA plan, the tri-lateral agreement between Venezuela, Cuba, and Bolivia will allow small producers to benefit from what's expected to be heavy trade between the three nations.
This is bad news for the Andean pact nations, as well as the United States. By shutting out other regional trade partners, the new deal will increase trade between the three nations to new highs, and force other countries to reconsider their trade alliances with the United States. While it is highly unlikely that other countries will defect from their trade responsibilities, ALBA will make the lives of their leaders suitably uncomfortable. With oil prices continually rising without any sign of respite in the near future, and Venezuela's stated commitment to providing Latin America with cheap oil provided they follow Chavez's leftist lead, politicians will have to carefully consider how far they're willing to transgress Chavez's political wishes.