BOLIVIA FORMALLY REQUESTS ATPDEA AND GSP EXTENSIONS

UNCLAS LA PAZ 001466

SIPDIS

SENSITIVE
SIPDIS

STATE FOR WHA/AND LPETRONI
STATE PASS TO USTR FOR BHARMAN
COMMERCE FOR JANGLIN
TREASURY FOR SGOOCH

E.O. 12958: N/A
TAGS: ETRD ECON PREL PGOV USTR BL
SUBJECT: BOLIVIA FORMALLY REQUESTS ATPDEA AND GSP EXTENSIONS

REF: LA PAZ 1418


1. (SBU) Summary: President Morales' newly-appointed advisor
for international trade, Pablo Solon, called on the
Ambassador May 31 to deliver a copy of a letter formally
requesting extensions of the Andean Trade Promotion and Drug
Eradication Act (ATPDEA) and the Generalized System of
Preferences (GSP). The original, signed by Morales and
addressed to President Bush, will be delivered via the
Bolivian embassy in Washington. The Ambassador said the USG
would seriously consider the letter but noted (again) that
securing an ATPDEA extension appeared unlikely and urged
Solon to earnestly explore alternatives. The Ambassador also
noted surprise at the letter's opening line, which mentioned
that the letter was presented in the "spirit of developing
relations of friendship and collaboration between our
countries," and pointedly asked how Morales could talk of
friendship just days after repeatedly insulting the United
States during the visit of Venezuelan President Hugo Chavez
and accusing the USG of attempting to assassinate him. The
GOB appears to be waking up to the need to engage the USG on
trade issues, though they continue to demonstrate
considerable ignorance about both how to pursue such a
dialogue with us and the U.S. political realities on trade.
End summary.


2. (U) In a May 31 meeting with the Ambassador, President
Morales' newly-appointed advisor for international trade,
Pablo Solon, delivered a copy of a letter formally requesting
extensions of the Andean Trade Promotion and Drug Eradication
Act (ATPDEA) and the Generalized System of Preferences (GSP)
trade benefits for Bolivia. The letter also reiterated
Bolivian concerns about the potential loss of Colombian soy
markets, noting that the opening of these markets to U.S. soy
exports under the recently signed Colombia-U.S. Free Trade
Agreement would make it difficult for Bolivian producers to
compete with less expensive U.S. exports. The original
letter, signed by Morales and addressed to President Bush,
will be delivered via the Bolivian embassy in Washington
within the next few days. (A copy of the letter was faxed to
WHA/AND--see paragraph 8 for an informal translation.)


3. (SBU) The Ambassador noted his surprise at the letter's
opening line, which mentioned that the letter was presented
in the "spirit of developing relations of friendship and
collaboration between our countries," and pointedly asked how
Morales could talk of friendship just days after repeatedly
insulting the United States during the MAS party's kick-off
for its Constituent Assembly campaign (reftel). The
Ambassador objected to Morales' regular attacks on USG
officials and policies and said Morales' comments, together
with GOB officials' frequently contradictory statements, made
it difficult to determine the administration's true
intentions and establish a relationship based on trust and
mutual understanding.


4. (SBU) Solon responded by saying Morales was aware of U.S.
concerns and recognized that GOB officials' conflicting
declarations confused many observers. He said, however, that
despite Morales' insults and attacks, the president valued
existing trade relationships and sincerely wanted a positive
relationship with the United States. According to Solon,
Morales believed ATPDEA and GSP extensions would provide a
"pause" during which Bolivia and the United States could
agree on a foundation for future trade arrangements. Solon
highlighted Morales' good intentions by calling attention to
the letter's statement that the GOB's medium-term objective
was to negotiate a trade agreement that would "take into
account the immense inequality" in the two countries'
economies and benefit "the most poor, small producers,
farmers' organizations, and also (Bolivia's) businessmen."


5. (SBU) The Ambassador said the USG would seriously consider
the letter but noted (again) that securing an ATPDEA
extension appeared unlikely. He said his own conversations
with USG officials suggested Congress was not disposed to
renew the Act's trade preferences - in direct contrast to
what Bolivian Minister of Planning Carlos Villegas reported
after a recent trip to Washington - and urged Solon to
earnestly consider alternatives. The Ambassador also said
(again) that neither party would re-open the Colombia-U.S.
Free Trade Agreement to preserve Bolivian access to Colombian
soy markets.


6. (SBU) President Morales June 1 met with private sector
representatives and told them about his recent letter to
President Bush requesting an extension of ATPDEA trade
benefits. This letter, he explained, followed upon similar
requests made to President Bush in their February 1 phone
conversation and to Secretary Rice during their March 10
meeting. Morales then went to El Alto to tour several
factories exporting textiles and other products to the United
States. Vice Minister of Foreign Affairs for Economic
Relations Maria Luisa Ramos is quoted saying that "Bolivia is
open to making commercial agreements (with the U.S.),but we
have not yet defined dates, modalities, or anything as yet."
Leading daily "La Razon" quotes an un-named GOB official as
stating that any commercial agreement with the U.S. would
exclude agriculture and intellectual property rights.


7. (SBU) Comment: The GOB appears to be waking up to the
need to engage the USG on trade issues, though they continue
to demonstrate considerable ignorance about both how to
pursue such a dialogue with us and the U.S. political
realities on trade. Solon tried to defend and explain
Morales' policies, but sought to avoid a detailed discussion
of Morales' attacks against the USG, the most recent being
his accusation that the United States is trying to
assassinate him. Solon seemed unable or unwilling to
understand why such attacks would cause the USG to doubt
Morales' wish for "developing relations of friendship and
collaboration." End comment.


8. (SBU) Following is an informal translation of the letter
from President Morales to President Bush:

La Paz, Bolivia
May 30, 2006

Dear Mr. President:

In the spirit of developing relations of friendship and
collaboration between our countries, I address you to
reiterate Bolivia,s petition for the extension of U.S.
tariff preferences within the framework of ATPDEA and the
Generalized System of Preferences (GSP). As I expressed
verbally on February 1 and reiterated in my letter of March
10, the extension of tariff preferences is fundamental in
guaranteeing continued exports to your country, thus
preserving the jobs of people involved in this significant
economic activity. For the United States, the extension and
enhancement of tariff preferences for Bolivia has practically
no impact, since they represent no more than 0.07 percent of
total U.S. imports. On the contrary, for our country, this
represents a possibility for manufacturers to reach one of
their most important markets and to reduce the migration of
Bolivians abroad due to lack of jobs.

Further, we want to reiterate that we hope for understanding
from your country regarding the preservation of markets for
Bolivian soybeans in Colombia, which may be adversely
affected by the Free Trade Agreement negotiated by this
Andean country and the United States. Currently, 40 percent
of our soybean exports are destined to Colombia, and it will
be very difficult to access this market if we have to compete
under equal conditions with the massive soybean production of
the United States.
For a country with an indigenous majority, which for the
first time in 180 years has an indigenous president, it is
crucial to maintain and deepen economic stability, which will
allow us to make broad change within a democratic regime.
The Constituent Assembly, which we have convened in agreement
with all political and social actors, will be the place to
deepen our democracy by eliminating the exclusions of the
past.

Our government is a government with an indigenous and native
identity of its own. We have undergone more than 500 years
of exclusion, but we do not seek anyone,s exclusion or
expulsion. What we want is to live harmoniously and
complementarily among ourselves, with our neighbors, and with
nature. Our commitment to a "zero cocaine" policy is being
developed through the streamlining of coca cultivation,
carried out in coordination with agricultural producers
themselves.

With the United States, as well as with all countries in the
world, we seek a spirit of peace and solidarity, which we
expect will be strengthened by the gesture of extending
tariff preferences and preserving markets for Bolivian
soybeans in Colombia.

Our medium-term objective is to be able to negotiate a trade
agreement with your country that takes into account the
immense inequality that exists between our economies in order
to benefit the most poor, small producers, farmers,
organizations, and also our businessmen. In order to address
this task, on the one hand we need to open a process of
dialogue and mutual understanding regarding the realities and
visions of our countries, and on the other hand, to
successfully complete the process of re-founding Bolivia by
means of the Constituent Assembly.

Hoping that our trade relations continue undisturbed, I wish
to reiterate my invitation for you to join us on August 6,
for the occasion of the historic event of the inauguration of
the Constituent Assembly in Bolivia.

With this particular motive, I avail myself of this
opportunity to express to Your Excellency the assurance of my
highest and most distinguished consideration.

Evo Morales Ayma
Constitutional President of the Republic

His Excellency
George W. Bush
President of the United States of America
Washington, D.C.
GREENLEE