UNCLAS LA PAZ 002494

SIPDIS

E.O. 12958: N/A
TAGS: ECON EINV ETRD EFIN BL
SUBJECT: BOLIVIA: EVO CALLS ATPDEA SUSPENSION "VENGEANCE"


1. Summary: Press reports highlighted the closure of two
more small businesses in the wake of the announcement of
President Bush's decision to suspend ATPDEA trade benefits
for Bolivia starting December 15. President Morales reacted
angrily, calling the suspension "political vengeance." Vice
President Garcia Linera described the benefits suspension as
part of an "abusive and aggressive attitude on the part of a
world power against a country." Morales announced that he
will re-negotiate on ATPDEA with the incoming Obama
administration, while industry experts downplayed the
Bolivian government's attempts at replacing the U.S. market.
End summary.

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Morales' Reaction: Vengeance is Theirs!
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2. Despite the White House statement that clearly explained
the reasons behind the decision to suspend ATPDEA benefits
for Bolivia, Morales continues to insist that Bolivia has met
its counternarcotics targets. In response to the suspension
announcement, Morales said, "Suspending Bolivian exports of
textiles to the United States, under a pretext that the
Bolivian government has not complied or has not helped in the
counternarcotics fight is completely false. What the U.S.
government and the U.S. president has done is apply a
political vengeance to frighten the Bolivian people."
Morales has repeatedly stated that Bolivia met its
counternarcotics targets better Peru and Colombia, countries
which were not decertified.

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Morales Hopes for Improved Relations Under Obama...
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3. Morales declared at a November 27 press conference that he
is predisposed to work with the Obama administration, and
that he intends to negotiate re-establishment of ambassadors
in both countries "on the condition that there is
respect....Beyond the wealth of a country, beyond the poverty
of a country, first is the dignity of the Bolivians."
Morales claimed that he had met with an unnamed U.S. Senator
in his last visit to Washington who told him that in June the
Obama administration "would re-instate ATPDEA." Morales
warned, however, that negotiations would have to wait until
president-elect Obama took office, because "no kind of
negotiation can take place because there is a stage of
transition."

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...While Morales' Appointee Doubts Chance of Change
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4. Not all public officials in Bolivia are so confident of a
change under a new U.S. administration, however. In a radio
interview, Cochabamba Prefect Rafael Puente (who was
appointed by President Morales) said that Bolivians should
not hope for greatly improved relations with the United
States under the Obama administration: "The only news for
Bolivia is that now a black man will be screwing us."

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Industry Still Focused on (Shrinking) Bottom Line
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5. Eduardo Paz, president of the Industry, Trade, Services
and Tourism Chamber of Santa Cruz (CAINCO) announced that
Morales' assurances of new markets in Venezuela and Iran
"cannot compare to the U.S. market" and complained that they
are suffering under Morales' "erratic foreign trade
policies". Paz described the first trade agreements under
the Bolivarian Alternative for the Americas (ALBA) as
amounting to roughly one tenth of trade that currently
benefits from ATPDEA tariff elimination.
LAMBERT