GOB URGES "CREATIVE" APPROACH TO BILATERAL TRADE

UNCLAS LA PAZ 002079

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 EINV ECON PREL PGOV BL
SUBJECT: GOB URGES "CREATIVE" APPROACH TO BILATERAL TRADE

REF: LA PAZ 2069


1. (SBU) Summary: GOB trade officials expressed satisfaction
August 1 with Vice President Garcia Linera's trip to
Washington (reftel),which provided an opportunity to lobby
for an extension of the Andean Trade Promotion and Drug
Eradication Act (ATPDEA). They noted the GOB's interest in
negotiating a long-term trade agreement but said it would be
"irresponsible" to start talks during Bolivia's Constituent
Assembly, since delegates would make decisions on key
trade-related issues. Both officials urged a "creative"
approach and in that vein promised to deliver a Bolivian
proposal within 10 days, noting that the failure to win an
ATPDEA extension or sign a comprehensive trade agreement
could harm the bilateral relationship. End summary.


2. (SBU) In an August 1 meeting with the DCM, Vice Minister
of Economic Relations and Foreign Trade Maria Luisa Ramos and
Trade Advisor Pablo Solon expressed satisfaction with Vice
President Garcia Linera's recent trip to Washington (reftel),
which provided an opportunity to urge U.S. executive and
legislative branch officials to extend the Andean Trade
Promotion and Drug Eradication Act (ATPDEA) beyond its
December 31 expiration. Ramos remarked that she and other
GOB officials knew it would be difficult to secure an
extension but said they were pleased that Bolivia was allowed
to make its case.


3. (SBU) In response to the DCM's inquiry about the GOB's
attitude toward a long-term trade agreement, both Ramos and
Solon noted the government's interest in negotiating a
comprehensive pact but said it would be "totally
irresponsible" to start talks during Bolivia's Constituent
Assembly, which will convene August 6 and may continue until
mid-2007. Solon said delegates would make decisions on key
trade-related issues, including performance requirements,
investor/state disputes, and intellectual property rights,
and said the GOB could not negotiate knowing that Constituent
Assembly decisions could materially affect the provisions of
a long-term pact. Solon acknowledged that Bolivia would join
EU association agreement negotiations with other Andean
Community members in January 2007, while the Constituent
Assembly is likely still in session, but emphasized that
discussions would continue for at least two years and would
end after Constituent Assembly delegates settled important
domestic debates.


4. (SBU) Both Ramos and Solon urged a "creative" approach to
two-way trade, noting that the failure to win an ATPDEA
extension or sign a comprehensive trade agreement could harm
the bilateral relationship. Solon said he believed certain
U.S. officials might be more flexible than others in working
out the details of a trade pact and expressed hope that
Bolivia and the United States could find common ground. He
mentioned that the GOB was developing an ATPDEA/trade
proposal and suggested Embassy and GOB officials meet
informally to discuss. Solon acknowledged, however, that it
might be impossible to reach agreement; in that case, he
said, the GOB would probably not "fight" for a pact, as
administration officials believed they could compensate
Bolivian exporters for the estimated $15 million tariffs they
would face if both ATPDEA and GSP trade preferences expired.
Solon estimated tariffs of $8 million if GSP but not ATPDEA
were renewed.


5. (SBU) Comment: Ramos and Solon seemed reluctant to abandon
hope for an ATPDEA extension. We will continue to urge the
GOB to look beyond an ATPDEA extension to a long-term trade
agreement, with the U.S.-Peru pact as a model, but unless a
"creative" solution is found, discussions may yield few
concrete results. End comment.
GREENLEE