(Bloomberg) -- When Gustavo Petro takes office on August 7th as the first leftist president of Colombia, he’s expected -- as soon as the next day -- to open his country’s volatile border with Venezuela, South America’s longest running socialist state.

Luigi Pisella, head of Conindustria, Venezuela’s largest industry association, and Adan Celis, vice president of Venezuela’s largest business association, Fedecamaras, both say the reopening is set for August 8. 

And while business groups on both sides want it and forecast $1.2 billion in trade by year’s end, the challenges may be greater than they realize: illegal armed groups that control trafficking, bridges and roads crumbling from years of disuse, and an utter lack of clarity around taxation and permits.

“The opening will occur in the midst of profitable illicit business operations that will not be easy to dismantle,” said Felix Arellano, professor of international relations at Central University in Venezuela. “There might be efforts that complicate the opening, so the process of normalizing the border will be slow.” 

Petro and Venezuelan President Nicolas Maduro, who first officially spoke on June 22, held a second conversation in recent weeks to discuss the reopening, according to a person familiar with it. 

Earlier this month, their representatives met with merchants and business chamber heads inside Venezuela near the border. The business leaders pushed for a full opening on Aug. 8, according to people familiar with the talks. They estimate that, after the long impasse, the value of trade reactivation could more than triple in coming months.

Problems are already evident. The original plan was to hold an opening ceremony on the Tienditas international bridge. Then it became clear that armed groups there pose a risk to the officials, according to the people. The many years of a closed border led to a surge in contraband over informal routes controlled by organized crime.  

A press official for Petro declined to comment. Maduro’s office didn’t reply.  

The border was closed in 2009 by Maduro’s predecessor, Hugo Chavez, to protest Colombia’s growing free-trade relations with the US. That didn’t last but frictions continued. In 2015, pedestrians were permitted but vehicles blocked when Maduro expelled Colombians in reaction to an attack on Venezuelan soldiers  fighting smuggling in the midst of nationwide shortages.

In 2019, Colombian President Ivan Duque, a conservative, recognized Venezuelan opposition leader Juan Guaido as head of state, leading Maduro to break diplomatic relations entirely. Consulates and embassies were closed. Restrictions were tightened during the pandemic. About a year ago, Maduro and Duque eased some of them under pressure from businesses and communities on both sides.

Distortions and shortages caused by Venezuela’s socialist economy have often created a lucrative smuggling trade. A formal opening and expectations of economic growth at the fastest pace in 15 years under Maduro’s new market-friendly policies could boost Colombia’s exports to its neighbor, which totaled just $331 million of goods this year, down from $6.1 billion in 2008. 

“The possibility to formally export our products to Venezuela again is very, very good news for us,” said Olimpo Penuela of the Clock Footwear factory in Cucuta. A decade ago, it would ship the entirety of its merchandise to Venezuela. Now, 30% goes there but through informal routes that require bribes to criminal groups and security officials. The remaining 70% is sold in Colombia. 

Before the pandemic, the shoe-making industry in the Colombian border region of Santander, of which Cucuta is capital, generated $20 million a year, said Penuela, whose 30-person factory makes everything from sneakers to platform sandals.

Leonardo Mendez, 76, who belongs to an organization representing Colombian truck drivers, says the opening will have a knock-on effect. “The mechanic, the person selling spare-parts, the driver, the hotel where he stays -- it’s a long chain of people who benefit,” Mendez said from Cucuta. 

Yet many of the requirements for trucks to cross safely -- such as customs paperwork to avoid checkpoint stops -- remain a mystery, he said. Another of the main obstacles is the infrastructure, including the quality of the bridges after years of disuse and the main roads on the Venezuelan side, Mendez said.

Several illegal armed groups operate along stretches of the 1,400-mile (2,250-kilometer) border, and often fight for control of trafficking routes. A Colombian rebel group known as the ELN has close ties with Maduro’s government and operates as many as 150 informal crossings, Colombian Senator Ariel Avila estimates. 

Avila, who wrote the book “The Hot Border Between Colombia and Venezuela,” said the illegal trade in drugs, gold and people brings in so much money now that the opening of state-run borders won’t have that big an impact on areas currently run by criminal gangs. 

In addition, some Venezuelans are afraid that Colombian imports will force them to compete against cheaper goods than they’re able to produce, particularly since Maduro has largely done away with import taxes to fend off bouts of scarcity. In other words, the opening could end the short respite local producers have experienced after a seven-year recession that killed off most national production. 

On the other hand, some Venezuelan business owners say they are keen to once again export metals, textiles and chemicals to Colombia. 

Venezuela’s economy is expected to grow 8.3% this year, from 1.9% in 2021, according to a Bloomberg survey. Sectors of the population with at least partial access to foreign currency have recovered consumption levels, particularly in large cities, strengthening a perception that a general recovery is taking place, according to local analysis firm Anova.

Wladimir Tovar is head of customs and border issues at the transportation association of the Venezuelan border state of Tachira. He said by telephone that Venezuelan entrepreneurs must rethink their trade strategies, especially those dealing in footwear, metal mechanics and industrial parts. “60% of Colombian and Venezuelan businesses that stopped crossing due to the closing of the border are calling back to restart operations, and that’s a good sign,” he added.

“There won’t be a quantum leap in trade to the high mark of the 2000s, but it surely is going to triple because new sectors are going to be incorporated,” he added. 

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