MORALES OFFERS OBAMA DIALOGUE, OR SETS TRAP?

C O N F I D E N T I A L LA PAZ 000004

SIPDIS

E.O. 12958: DECL: 01/02/2019
TAGS: PGOV PREL PINR BL ECON EFIN
SUBJECT: MORALES OFFERS OBAMA DIALOGUE, OR SETS TRAP?

REF: LA PAZ 2391

Classified By: A/EcoPol Chief Brian Quigley for reasons 1.4 (b, d)


1. (C) Summary: In a relatively restrained New Year's Day
address, Bolivian President Evo Morales offered to dialogue
with President-elect Barack Obama regarding suspension of
Andean Trade Promotion and Drug Eradication Act benefits
instead of pursuing a complaint with the World Trade
Organization. Morales saluted the 50th anniversary of the
Cuban revolution, but did not use the speech to highlight his
recent proposal to readmit Cuba into the Organization of
American States. Post notes that official statements by the
Government of Bolivia since Obama's election victory are
consistent with a strategy of setting expectations
unrealistically high, so if demands are not met Morales can
claim he tried dialogue and was rejected by "the evil
empire." End summary.


2. (U) In his New Year's Day address, President Evo Morales
struck a relatively less bellicose tone toward the United
States, offering to dialogue with President-elect Barack
Obama on economic issues, including suspension of Andean
Trade Promotion and Drug Eradication Act (ATPDEA) benefits.
Until recently, the Morales administration had resolved to
bring the suspension of ATPDEA benefits to the World Trade
Organization (WTO). Morales stated again in his speech his
belief that the U.S. "is complying with neither its own
internal rules nor with international standards," but said he
had asked the Foreign Ministry to suspend its complaint to
the WTO (septel).


3. (U) Morales also stated, "But I learned something. When
there are problems with the government, the U.S. tries to cut
our credit, any cooperation; or in the market many countries
appear to accept these themes questioned by the U.S.
government. In 2006 some ministers were concerned about the
Millennium Challenge Account, and I told them in the Cabinet:
there will not be any Millennium Account. There is a
Millennium Challenge Account for those who support, promote,
and strengthen a capitalist system and we have another model.
Here we are competing to seek equality between all
Bolivians."


4. (U) Morales used the bulk of the speech to salute the 50th
anniversary of the Cuban revolution, and called again for the
end of the U.S. blockade. However, he did not use the speech
to highlight his recent proposal to create a new version of
the Organization of American States (OAS) with Cuba as a
member and without the U.S. (Note: Cuba was expelled from
the OAS in 1961. End note.)

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Comment
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5. (C) Reasons for Morales' backtracking on the WTO complaint
are unclear. While Morales says he is offering Obama a
chance to discuss the issue before making a formal complaint,
there is also the possibility that Morales' advisors have
alerted him to the fact that bilateral agreements such as
ATPDEA are not regulated by the WTO. Morales may be looking
for a graceful exit from what could otherwise be a
humiliating international clarification from the WTO.


6. (C) While Morales may genuinely believe there exists a
kind of kinship between himself and President-elect Obama, as
he has stated in the past (reftel),Post is concerned Morales
continues to set expectations unrealistically high on
purpose. If Morales' demands are not met by the Obama
administration, he can claim he tried dialogue and was
rejected by "the evil empire." Still, in this case, the jury
is out on whether Morales is simply taking a breather from
bashing the U.S. as strenuously as usual, is looking for a
way out of his own ATPDEA proposal mess, or if he truly
expects the Obama administration to look favorably on the
Morales revolution.
LAMBERT