Partners to Rivals: The Interruption to Trade in the Colombian – Venezuelan Border

Samuel Malkún Montoya (s.malkun@uniandes.edu.co)
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Samuel Malkún Montoya: Universidad de los Andes

No 21297, Documentos CEDE from Universidad de los Andes, Facultad de Economía, CEDE

Abstract: In just over ten years trade between Colombia and Venezuela vanished due to diplomatic tensions between both nations and the economic crisis in Venezuela. This study examines the impact of political disruptions, particularly stemming from Colombia's Defense Cooperation Agreement with the United States in 2009, on Colombian exports to Venezuela. Employing a gravity model incorporating time-varying and country-pair fixed effects, this research forecasts trade flows and compares them to the observed export data. While predicted exports mirror the observed data during most of the series, since 2010 both trends have deviated significantly. Between 2010 and 2015 losses amounted to $6bn, as only 65% of predicted trade took place. In contrast, Colombian exports to other partners in the region maintained an upward trajectory.

Keywords: economic diplomacy; trade (search for similar items in EconPapers)
JEL-codes: F17 F51 (search for similar items in EconPapers)
Pages: 44 pages
Date: 2025-01-15
New Economics Papers: this item is included in nep-dev and nep-int
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Persistent link: https://EconPapers.repec.org/RePEc:col:000089:021297

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