BOLIVIA: REACTIONS TO ATPDEA ANNOUNCEMENT

C O N F I D E N T I A L LA PAZ 002111 SIPDIS E.O. 12958: DECL: 09/26/2018 TAGS: PGOV PREL ECON ETRD ASEC BL SUBJECT: BOLIVIA: REACTIONS TO ATPDEA ANNOUNCEMENT Classified By: EcoPol Chief Mike Hammer for reasons 1.4 b,d ¶1. (C) Summary: Initial Bolivian reaction to the decision to suspend ATPDEA privileges has been muted but somber. A number of our contacts are faced with severe financial repercussions from the decision, but most people we have talked to understand that this was brought about by the Bolivian government's actions. Charge informed Vice Foreign Minister Hugo Fernandez of the decision just prior to the public announcement; Fernandez later told the Charge that he had passed the news on to Foreign Minister Choquehuanca and the president's office and that "the reaction was not happy." Choquehuanca later held a press conference where he described the decision as "vengeance" and "an aggression against Bolivian democracy." ¶2. (C) Summary continued: To the domestic audience, Bolivian officials have consistently downplayed the importance of ATPDEA. Small Business Minister Susana Rivero has announced on multiple occasions that the government will "guarantee" markets for Bolivian production. President Morales himself has mentioned Iran as a possible replacement for the U.S. market. How President Evo Morales will spin the decision now, especially if he needs a domestic distraction from failing negotiations with the opposition, remains to be seen. El Alto, a city of almost a million people that sits on the altiplano above La Paz and is one of Morales' greatest sources of support, will be most affected by this decision. When Morales needs a protest at the U.S. Embassy, he usually looks to El Alto for participants: the ATPDEA decision could prompt demonstrations--potentially violent--at the Chancery or at USAID. End Summary. - - - - - - - - - - - - - - - - - - - - - - - - - - Meetings in Conjunction with Decision Announcement - - - - - - - - - - - - - - - - - - - - - - - - - - ¶3. (C) In conjunction with the official announcement of the ATPDEA decision and in an attempt to buffer a potentially negative reaction from some groups, Charge, EcoPol, and Public Affairs met with various stakeholders. Meetings included: Charge's courtesy call to the Vice Foreign Minister; Charge's off-the-record interview with Padre Eduardo Perez, leading radio journalist and director of national radio network FIDES; ECOPOL office call with Hugo Granchant, Treasurer of the Confederation of Private Business; an off-the-record coffee with media opinion leaders; PolOff meeting with Regional Workers Union representative Roman Valdez; EcoPol office call with Jose Luis Contreras, President of the American Chamber of Commerce; and a number of off-the-record meetings with journalists and editors. USAID Director will brief key union members immediately after the official announcement. In addition, Public Affairs produced an in-house radio interview with the EcoPol Counselor to be released after the official announcement: it will be translated into Aymara and distributed to all radio stations in El Alto. EcoPol Counselor will also have an on-the-record interview after the announcement with El Alteno, the only newspaper dedicated to El Alto. - - - - - - - - - - Government Reaction - - - - - - - - - - ¶4. (C) After Vice Foreign Minister Hugo Fernandez spoke with Charge before the official announcement, he told Charge he had passed the news to Foreign Minister Choquehuanca and the president's office. Later, Foreign Minister Choquehuanca gave a press briefing, in which he described this decision as "a new aggression against Bolivian democracy." He listed among previous "aggressions" the counter-narcotics decertification decision, which he described as a "unilateral, political measure." He added that the government also believes that the ATPDEA decision is a form of "vengeance". Commenting that Bolivia does not want to depend on only one country for trade, he added that the government will work to open markets in Japan, China, India, Brazil, and Vietnam. - - - - - - - - - El Alto Reaction - - - - - - - - - ¶5. (C) In a meeting with Regional Workers Union (COR) Executive Member Roman Valdez, Valdez told PolOff that El Alto residents have "zero" understanding of what ATPDEA does for them; some owners of factories understand it, but workers only vaguely link it with their paychecks. Valdez opined that the government will blame the USG for suspending preferences, but added that the government has done a poor job of positioning this issue as a potential rallying-point for the masses. Valdez feels that the government's assurances that it will step in to fill the economic gap are not reassuring people and many business leaders are concerned that any government attempt will be ineffective, inadequate, and prone to corruption and cronyism. ¶6. (C) Note: In a prior meeting, El Alto Mayor Fanor Nava claimed one issue in El Alto in which facts trump anti-U.S. mythology is ATPDEA. Nava said that factory owners have done a good job explaining the importance of U.S. preferences to their employees with a simple message: no ATPDEA, no jobs. Nava predicted that Altenos would initially blame Morales for any loss of ATPDEA benefits. However, he suggested Morales' team would quickly and effectively deflect blame onto the USG. Ultimately, Nava said the Morales and the USG will both receive Alteno's wrath, which "will be very considerable." End note. ¶7. (C) PolOff spoke with Efrain Argani, Chairman of the El Alto City Council (Plan Progresso),said that Altenos are worried about this decision. Argani claimed that even people who take money to march on the Embassy do so reluctantly because there is a subtle understanding that this may hurt them with ATPDEA. "But they have to live here, and so they go anyway." He said pressure in form of threats, bribes, and fines make them obey government orders to act against our Mission. The reaction will be more impassioned, however, if ATPDEA is suspended. Argani suggested that 100,000 Altenos are affected directly or indirectly by ATPDEA: "These people will march in a big way." He added that they were unlikely to march (at least initially) on either the government or the Embassy, but rather marches and protests would be confined to El Alto, pressuring both sides to "do whatever they have to do to fix this." In fact, when we informed Mayor Nava, his immediate reaction was to say that he'd "start working to fix it," perhaps not fully understanding the scope of the decision. ¶8. (C) Argani suggested that the Embassy couch post-announcement explanations in terms of ways to change the decision, i.e. that Bolivian government can improve relations with the USG. He added that Altenos understood on a basic level that the government was "breaking relations with the United States as part of a political campaign" and will not appreciate their livelihoods being collateral damage. Argani warned, however, that although he would try to calm the backlash, anti-USG sentiment is "hot" in El Alto. ¶9. (C) Some Alteno analysts have told us recently that Morales' supporters in El Alto have come to accept the potential loss of ATPDEA benefits as a necessary sacrifice for the cause, i.e. Morales' vision of "change." There is, however, concern regarding how the deteriorating bilateral relationship will affect USAID's assistance programs in El Alto. It is not clear how much sacrifice people are willing to make for an amorphous vision of the future that does not put bread on the table. - - - - - - - - - - - Entrepreneur Reaction - - - - - - - - - - - ¶10. (C) Charge met with Marcos Iberkleid, owner of one of the largest textile companies in La Paz and a major beneficiary of ATPDEA benefits. Iberkleid noted that the recent turmoil in Bolivia had already adversely affected his company when canceled American Airline flights hindered his distribution plans. In 2001, over 90 percent of his customer base was in the United States; he has brought this number down to 75 percent, but the ATPDEA suspension will still have a serious impact on his company. Iberkleid accepted the news resignedly and then lamented the state of his country: "This is not the same country as two years ago. Twenty five years of democracy down the drain. We cannot stop Evo. Life in Bolivia will become unbearable. We have failed." ¶11. (C) Iberkleid asserted that "the government doesn't care about ATPDEA" and added that "the workers themselves understand it is the government's actions that are causing this situation. The workers took out ads in last Sunday's papers demanding that the government moderate its tone and make efforts to secure ATPDEA benefits." However, he predicted that the government would organized protests aimed at the Embassy in reaction to the decision. ¶12. (C) Entrepreneur and designer Beatrice Canedo told PolOff that the suspension of ATPDEA will put her out of business. Her clothing design company employs 50 people directly and what happens to her business will affect 4000 to 5000 other people indirectly, she estimates. She had moved her company to Bolivia because of the ATPDEA trade preferences, but says that business leaders understand the USG decision: "You don't have to convince us; we are with you." Through tears, she added angrily, "Evo is destroying us." - - - - - - - - - - - - - - - - - - - - Business Association Members' Reactions - - - - - - - - - - - - - - - - - - - - ¶13. (C) Eduardo Bracamonte, President of the Bolivian Export Chamber, told EconOff that he believes that overall the Bolivian government does not care about ATPDEA and he cannot get people in the government to engage on this issue. He warned, however, that we should expect a violent reaction from the government. "Evo may very well send his goons, who don't even have jobs much less anything to do with ATPDEA to march on the embassy." He added, "I have had chats with my workers in El Alto about ATPDEA and the importance of the benefits. While some understand it, they don't make the link to Evo's actions and ATPDEA The blind loyalty to Evo because of ethnic identification is amazing and cannot be broken." He opined that he and other business owners will be hurt, but in the end they can always take their know-how and move to another country, while the workers are the ones who will feel the real pain. ¶14. (C) Hugo Granchant, Treasurer of the Confederation of Private Businessmen of Bolivia, told us that "This is no surprise given the Bolivian governments actions and Evo's speech at the United Nations." He added that, "this government has declared any private capitalist enterprise an enemy." Granchant feels there will be a strong anti-USG reaction from the Bolivian government, but he believes that workers will now start to make connections between the decision on ATPDEA and President Morales' actions against the USG and narcotics-control. ¶15. (C) Jose Luis Contreras, President of the American Chamber of Commerce in Bolivia, suggested that "the government will play the victim and accuse the United States of not wanting an indigenous in power and of attacking poor people." Contreras feels that this tactic will appeal to Morales' base and make him stronger with his core support group. Contreras told EconOff that "the government will have to offer something to the companies and workers to soften the impact of losing ATPDEA He concluded that, ""Evo has declared himself an enemy of capitalism, which means any private businessman in Bolivia is his enemy." - - - - Comment - - - - ¶16. (C) Post attempted a wide-reaching roll-out in conjunction with the announcement of the decision to suspend ATPDEA in order to present the USG's explanation of why this decision was taken. Most of our contacts understand the reasoning behind the decision and do not blame the USG, however many warned us that President Morales will attempt to use this decision against us with his usual blend of anti-American rhetoric and demonstrations of his followers. Many people will be directly affected by this decision, at a time when the Bolivian economy is suffering other ill effects of Movement Toward Socialism (MAS) policies. In addition, President Morales traditionally uses anti-American rhetoric to distract his followers from domestic problems, such as the current stalemate in talks with the opposition. Morales' reaction to this development--in conjunction with Bolivia's "black October" (the anniversary of deaths under the Goni Sanchez de Lozada administration)--is bound to prompt further rhetorical attacks and protests. URS