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