BOLIVIA REACTS ENTHUSIASTICALLY TO ATPDEA EXTENSION

UNCLAS LA PAZ 003370

SIPDIS

SENSITIVE
SIPDIS

STATE FOR WHA/AND LPETRONI
COMMERCE FOR JANGLIN
TREASURY FOR SGOOCH

E.O. 12958: N/A
TAGS: ETRD EINV ECON PREL PGOV BL
SUBJECT: BOLIVIA REACTS ENTHUSIASTICALLY TO ATPDEA EXTENSION

REF: A. LA PAZ 3356

B. LA PAZ 1466

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SUMMARY
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1. (SBU) Bolivian government and business representatives
reacted enthusiastically to news of the extension of the
Andean Trade Promotion and Drug Eradication Act. President
Morales and other GOB officials expressed satisfaction and
promised to send a team to Washington in January to begin
negotiating a long-term trade agreement, and exporters
declared the extension a "relief" and a sign of American
goodwill. Speaking at a press event December 11, the
Ambassador declared the USG ready to negotiate a trade
agreement but said the initiative lay with the GOB; the
Ambassador also said the USG would be watching Bolivian
democracy "closely" and noted that it would influence any
future trade talks. Vice President Garcia Linera told the
Ambassador December 12 that the GOB considers the negotiation
of a comprehensive trade arrangement an appropriate next
step; ref A reports on the meeting in more detail. End
summary.

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GOB OFFICIALS EXPRESS SATISFACTION
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2. (U) GOB officials reacted enthusiastically to news of the
extension of the Andean Trade Promotion and Drug Eradication
Act (ATPDEA). At the December 8-9 South American Summit in
Cochabamba, President Morales claimed credit, declaring
himself the first Andean leader to push for an extension and
asserting that he was alone in encouraging the Act's renewal
when he raised the issue in a May letter to President Bush
(ref B). He added that his government had secured an
extension without spending millions on lobbyists, in contrast
to previous administrations. Minister of Planning Hernando
Larrazabal expressed satisfaction with the extension and
promised to send a team to Washington in January to begin
negotiating a long-term trade agreement; his counterpart,
Minister of Finance Luis Arce, claimed that the GOB had
helped secure the extension by sending two ministers to
Washington to lobby on Bolivia's behalf.

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EXPORTERS AND AMBASSADOR DELIVER REMARKS
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3. (U) At a December 11 press event highlighting the
extension of ATPDEA benefits, National Chamber of Exporters
President Eduardo Bracamonte prefaced the Ambassador's
remarks by declaring the extension a "relief" and suggesting
it was a sign of American goodwill. Bracamonte expressed
gratitude for the extension and noted that thousands of
Bolivian laborers would now be able to keep their jobs; he
recognized, however, that the extension was only temporary
and urged the GOB to consider negotiating a comprehensive
trade arrangement. Employees' representatives echoed
Bracamonte's comments, calling on the GOB to act to protect
their jobs and ensure long-term access to U.S. markets.


4. (U) Speaking immediately afterward, before a crowd of 270
employees of a La Paz apparel manufacturer exporting goods to
Polo Ralph Lauren and other U.S. firms, the Ambassador
declared the USG ready to negotiate a trade agreement but
said the initiative lay with the GOB. He noted that GOB
officials had done little to secure a long-term economic
agreement and urged them to decide whether they wanted
Bolivia "to be more than just a strategic partner, but also a
friend." The Ambassador said the USG would be watching
Bolivian democracy "closely" and noted that negative change
could influence any future trade talks, particularly if
events seemed to contradict democratic values.

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VP SAYS THE GOB WANTS TO NEGOTIATE
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5. (SBU) Vice President Alvaro Garcia Linera told the
Ambassador December 12 that the GOB considers the negotiation
of a comprehensive trade arrangement an appropriate next
step. He thanked the U.S. Congress for extending ATPDEA
trade preferences and expressed appreciation for executive
branch support, specifically mentioning Secretary Rice's
letter urging a one-year extension for all four Andean
countries. Garcia Linera recognized the short-term nature of
the extension and said the GOB wanted to negotiate a trade
agreement (albeit one whose name does not include the word
"free"). He mentioned that the GOB would like to begin
discussions relatively soon and recommended that the USG pay
special attention to the five or six issues highlighted in
the GOB's mid-September trade paper; these include
patentability, government procurement rules, and
international arbitration for investment disputes. Ref A
reports on the meeting in more detail.

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COMMENT
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6. (SBU) GOB officials appear to understand that an
additional six-month extension of ATPDEA trade preferences is
possible only if a trade promotion agreement has been
negotiated and ratified. Pressure from exporters and
laborers, along with the GOB's own desire to avoid the ire
generated by the loss of thousands of jobs, will inevitably
lead the Morales administration to press for a long-term
trade arrangement. If the GOB is serious about pursuing
negotiations and begins to demonstrate its practical side, we
will have to develop an appropriate response.
GOLDBERG