Bridges Weekly Trade News Digest • Volume 12 • Number 33 • 9th October 2008
US House, Senate Vote to Extend Andean Preferences
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The US Senate approved on 2 October an extension of existing trade preferences to Bolivia, Colombia, Ecuador and Peru, making only small changes to the bill that was passed by the House of Representatives four days earlier.
Under the Senate’s version of the update to the Andean Trade Promotion and Drug Eradication Act (ATPDEA), Colombia and Peru would be granted another year of easier access to the US market, while Bolivia and Ecuador would be given an additional six months, with the possibility of a further extension if certain conditions are met.
The extension periods in the Senate bill differed from the version approved by the House of Representatives on 28 September, which would grant a one-year extension to all involved.
The ATPDEA was forged in 1991 to jointly increase efforts on the war on drugs in the Andean Region and to provide preferential trading conditions for the countries involved.
Under the Senate bill, both Bolivia and Ecuador can get ATPDEA benefits for a second six-month extension if the US President finds that the countries are meeting the eligibility criteria set out in the ATPDEA.
Ecuador will most likely have little trouble obtaining the additional six months, but Bolivia faces some significant hurdles. Indeed, US President George W. Bush has not endorsed the six-month ATPDEA extension for Bolivia on the grounds that La Paz has not lived up to its commitments to fight drug trafficking. In Bush’s view, the fact that Bolivia has driven out officials from both the US Agency for International Development and the US Drug Enforcement Agency (DEA), coupled with a “marked” increase in coca plantations and illegal markets for coca, means that Bolivia has not worked hard enough to combat drug trafficking.
The possible suspension of the benefits garnered from the ATPDEA is a major concern for the Bolivian business sector, which could lose access to the sizeable US market. More than 500 Bolivian companies shipped exports worth an estimated US$ 412 million to the US in 2007.
But the Bolivian government maintains that only 17 percent of exports to the US would be affected by a suspension of ATPDEA, thanks to the US’ Generalised System of Preferences (GSP), which allows a wide range of products to enter the US duty free and which was also recently extended. Furthermore, the EU, whose representatives visited Bolivia last week, reportedly stands ready to absorb the demand for Bolivian products affected by the suspension of the ATPDEA.
Although the Bolivian Institute of Foreign Trade considers it imperative that Bolivia show a cooperative attitude in the fight against drug trafficking, the country’s president, Evo Morales, has publicly denied the DEA’s request for access to the entire territory of Bolivia. Morales said that any exclusion from the benefits of the ATPDEA is nothing more than the US government’s “revenge” for the expulsion of the US ambassador to Bolivia, Philip Goldberg, in mid-September. Moreover, the head of the Bolivian Special Force to Fight Drug Trafficking (FELCN), Colonel Rene Sanabria, claimed that FELCN has carried out 8,900 anti-drug operations this year, and that over 23 tons of cocaine have been seized - five more tons than were confiscated in 2007. Sanabria said that these numbers are higher than those of other Andean countries.
ICTSD reporting; “ATPDEA extension facilitates Peru-US FTA implementation, says chancellor,” ANDINA, 5 October, 2008; “Bush continúa el trámite para suspender la Atpdea,” LOS TIEMPOS, 2 October 2008; “Morales rechaza pedido de la DEA para sobrevolar territorio boliviano,” AGENCIA BOLIVIANA DE INFORMACIÓN, 2 October 2008; “Policía boliviana confisca 100 kilos de cocaína destinados a Chile,” EFE/LAFA, 2 October 2008; “Acuerdos con los EEUU deberían ser de largo plazo,” HOY, 1 October 2008; “Diputados de EE.UU. extienden vigencia del ATPDEA y SGP hasta 2009,” BOLPRESS, 29 September 2008; “EEUU: Cámara Baja extiende ATPDEA a Bolivia pese a pedido contrario de Bush,” AGENCIA BOLIVIANA DE INFORMACIÓN, 29 September 2008.
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