Venezuela-Colombia trade sputters amid regional row

SAN ANTONIO, Venezuela, March 5 (Reuters) - Trade between Colombia and Venezuela was limited to bare necessities on Wednesday, with Venezuela only allowing in perishable goods as tensions remained high in the Andean region’s worst diplomatic crisis in years.

Venezuela on Wednesday sent tanks to the Colombian border to protest a Colombian military raid that killed a rebel commander in Ecuadorean territory, sparking the outrage of Venezuelan President Hugo Chavez who says the move could lead to war.

Analysts say continued border restrictions could worsen Venezuela’s nagging shortages of basic groceries and add to inflation that is already the highest on the continent.

Officials at the border said they were only allowing goods such as milk and chicken to enter Venezuela through the checkpoints of San Antonio and Paraguachon, while blocking cargoes of goods such as textiles and machinery.

But truckers and transport businesses said the government had provided very few details about the partial closure and what motivated it, while top government officials continued gave mixed signals about the issue.

“We have not received any instructions to close the border,” Defense Minister Gustavo Rangel said in a press conference, contradicting Agriculture Minister Elias Jaua’s Tuesday comments that the government had shut the frontier.

Cavecol, a Caracas-based organization that promotes bilateral trade, urged the two nations to resolve the crisis and to consider the effect of trade restrictions on 1.2 million residents who live off cross-border commerce.

“Here we make a living from the border. I do not know what are we going to do if they close it,” said an exasperated Yelis Parra, 45, a mother of four who runs a restaurant in San Antonio.

Colombian trade with Ecuador remains normal despite strained diplomatic relations between the two countries, Colombia’s finance ministry said on Wednesday.

Venezuela has struggled to maintain supplies of staple foods in recent months, a problem business leaders attribute to Chavez’s strict price controls but government leaders say is a product of hoarding by unscrupulous merchants.

Chavez has promised to resolve the shortages by cracking down on food sold above regulated prices.

Venezuela’s oil-driven GDP soared 8.4 percent in 2007 but inflation reached 22.5 with the most notable increases coming in food prices. (Additional reporting by Manuel Hernandez, Writing by Brian Ellsworth. Editing by Richard Satran)