Bridges Weekly Trade News Digest • Volume 12 • Number 41 • 3rd December 2008
Bush Suspends Preferential Treatment To Bolivia, Citing Insufficient Action Against Drugs
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US President George W. Bush last week moved to suspend preferential trade access for Bolivian exports, a step the Latin American country has decried as “political vengeance.”
According to the White House announcement on 26 November, Bolivia’s benefits under the Andean Trade Preference Act (ATPA) and the Andean Trade Promotion and Drug Eradication Act (ATPDEA) will be suspended as of 15 December. Under these agreements, goods from Bolivia, Colombia, Ecuador and Peru have been granted largely duty-free entry to the US, in exchange for their cooperation with US efforts to fight drug cultivation in the region. The trade preferences seek to weaken incentives to grow narcotic crops, by encouraging the production and export of legal goods to the US.
”The suspension … is the result of Bolivia’s failure to cooperate with the United States on counternarcotics efforts,” White House Press Secretary Dana Perino explained.
Perino did not rule out a reversal of Bush’s recent decision. “If Bolivia were to improve its performance under the ATPA and ATPDEA programs’ criteria, the President would have the discretion to issue a proclamation to redesignate Bolivia as a beneficiary country,” she said.
Bolivian President Evo Morales slammed Washington’s move at a press conference last week as a political decision. His leftist administration ordered US Ambassador Philip Goldberg and the US Drug Enforcement Administration out of the country in mid-September on charges of conspiring against the government. And earlier, local coca farmers had pushed out officials from the US Agency for International Development, declaring their programmes ineffective.
US officials denied involvement in Bolivia’s domestic politics. Nonetheless, Bolivian representative Gustavo Guzman was expelled from Washington in a standard tit-for-tat response.
Morales also denied claims that his country has failed to cooperate in anti-narcotics efforts. According to UN statistics, in 2007 Bolivia’s performance on drug seizures and reducing coca cultivation was better than that of Colombia and Peru. Moreover, UN reports suggest that the raw material used to make cocaine is grown on significantly less land in Bolivia than in the other two Andean nations: Colombia was estimated to have 250,000 acres under coca cultivation in 2007, compared to 124,000 acres in Peru 124,000 and 69,200 acres in Bolivia.
Like Peru, Bolivia permits coca cultivation for legal traditional uses. And Morales, who entered the public arena as the chief of the coca growers’ union, was elected upon his promise to end the forced eradication of coca. He maintains that forced eradication, though favoured by Washington, only leads to violent confrontations. Instead, his government has focused on cocaine seizures and promoted new industrial applications for the leaf, following the official state policy: “Coca, si. Cocaine, no.”
Indeed, Morales announced in November that during the first 10 months of 2008, Bolivia sequestered 25.5 tonnes of cocaine - 7.5 tonnes more than were confiscated in 2007.
US concerns were made clear in September legislation which extended ATPDEA preferences for Bolivia and Ecuador for only six months, and conditional upon review by the next administration (see BRIDGES Weekly, 9 October 2008, http://ictsd.net/i/news/bridgesweekly/30882/). But Ecuador is forecast to have little trouble meeting the eligibility criteria for further extensions of the agreement, and the other ATPDEA participants, Colombia and Peru, were granted another a year of easy US market access.
It is estimated that 50,000 factory jobs and around US$ 380 million in exports under preferential agreements are endangered by the suspensions, according to Reuters. Undoubtedly, Morales will now look to President-elect Barack Obama’s administration, which takes power in January, for an opportunity to renegotiate the trade preference arrangement.
ICTSD reporting; “Bush suspends trade accord with Bolivia in anti-drug dispute,” BLOOMBERG, 27 November 2008; “Bolivia calls US trade move ‘political vengeance’,” REUTERS, 27 November 2008; “US suspends Bolivian trade deal over drug war,” THE ASSOCIATED PRESS, 27 November 2008; “Bolivian president slams US for ceasing trade benefits,” REUTERS, 28 November 2008. “Morales believes Bolivia’s trade benefits with US will be restored under Obama,” LATIN AMERICAN HERALD TRIBUNE, 28 November 2008.
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