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Viewing cable 06LAPAZ299, AFTER BRIEF INTERRUPTION, USED CLOTHING IMPORTS

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Reference ID Created Released Classification Origin
06LAPAZ299 2006-02-07 14:35 2011-08-25 00:00 UNCLASSIFIED Embassy La Paz
VZCZCXYZ0026
RR RUEHWEB

DE RUEHLP #0299 0381435
ZNR UUUUU ZZH
R 071435Z FEB 06
FM AMEMBASSY LA PAZ
TO RUEHC/SECSTATE WASHDC 7976
INFO RUEHAC/AMEMBASSY ASUNCION 5582
RUEHBO/AMEMBASSY BOGOTA 2847
RUEHBR/AMEMBASSY BRASILIA 6717
RUEHBU/AMEMBASSY BUENOS AIRES 3931
RUEHCV/AMEMBASSY CARACAS 1291
RUEHPE/AMEMBASSY LIMA 1190
RUEHME/AMEMBASSY MEXICO 1648
RUEHMN/AMEMBASSY MONTEVIDEO 3549
RUEHQT/AMEMBASSY QUITO 3929
RUEHSG/AMEMBASSY SANTIAGO 8445
RUCPDOC/DEPT OF COMMERCE WASHINGTON DC
RUEATRS/DEPT OF TREASURY WASHINGTON DC
UNCLAS LA PAZ 000299 
 
SIPDIS 
 
SIPDIS 
 
STATE FOR WHA/AND LPETRONI 
COMMERCE FOR JANGLIN, MDYBCZAK, LMARTINICH, AND RSTETSON 
TREASURY FOR SGOOCH 
 
E.O. 12958: N/A 
TAGS: ETRD EINV ECON BL
SUBJECT: AFTER BRIEF INTERRUPTION, USED CLOTHING IMPORTS 
CONTINUE 
 
 
1. (U) Summary: Used clothing imports were temporarily 
interrupted January 31, when the supreme decree authorizing 
their entry expired.  The issue attracted the attention of 
local clothing manufacturers, who claimed cheap imports 
undercut their operations and called for a total ban, and of 
used clothing sellers, who urged the GOB to extend the 
decree.  In the end, the GOB decided not to decide, 
announcing late February 1 that used clothing imports would 
be allowed for another 180 days while the issue could be 
studied further.  Both sides legitimately argued that 
thousands of jobs were at risk, but neither recognized that 
Bolivian consumers benefit from the extraordinarily low 
prices of imported used clothing.  End summary. 
 
2. (U) Used clothing imports were interrupted at midnight 
January 31, when the supreme decree authorizing their entry 
expired.  In the run-up to the deadline, local apparel 
manufacturers and used clothing sellers marshaled forces to 
influence GOB action, with the former demanding the 
prohibition of used clothing imports and the latter urging 
the GOB to extend the original decree.  According to press 
reports, National Confederation of Micro and Small 
Enterprises President Ramiro Uchani and Committee against 
Used Clothing President Emilio Gutierrez called for a total 
ban, arguing that cheap used clothing imports had deprived 
local manufacturers and artisans of business and forced many 
to close shop, leaving thousands without work.  If used 
clothing imports continue, they said, many more of Bolivia's 
estimated 4,500 informal apparel workshops may have to shut 
their doors, with corresponding hardships for employees. 
Calls for an import ban were countered by Amadeo Tapia, 
Secretary General of the National Commission for the Defense 
 
SIPDIS 
of Used Clothing, who asserted that a total prohibition would 
eliminate the livelihood of the 15,000 people directly or 
indirectly involved in the used clothing trade.  Tapia 
threatened protests and blockades if the GOB banned imports. 
 
3. (U) President Morales assured both groups he would 
consider their demands, eventually siding with used clothing 
sellers and announcing late February 1 that he would issue a 
decree allowing the importation of used clothing for another 
180 days.  In the meantime, he promised to establish a 
committee (to include the new ministers of finance, health, 
economic development, and production and micro enterprise) to 
explore the issue and reach an agreed solution. 
 
4. (U) Comment: Both sides legitimately argued that thousands 
of jobs were at risk, but neither they nor GOB officials 
expressed any concern for Bolivia's mostly impoverished 
consumers, who benefit from the extraordinarily low prices of 
imported used clothing.  In El Alto's 16 de Julio market, for 
example, jeans sell for as little as $1.20, shirts for as 
little as $1, and children's clothing for as little as $0.60. 
 At these prices, small local manufacturers cannot compete, 
and many do stand to lose sales to cheaper imports.  But 
while some may benefit from the prohibition of used clothing 
imports, banning legal trade in these goods will do nothing 
to solve the problem of contraband, or illegal imports, which 
GOB officials estimate accounts for more than 90 percent of 
all imported used clothing. 
 
5. (U) Comment continued: For U.S. suppliers of used 
clothing, the GOB's decision to extend the decree is good 
news.  Bolivian National Institute of Statistics figures 
indicate that used clothing shipments originating in the 
United States account for 70 to 80 percent of total annual 
imports of $2 to $3 million, and many firms look to Bolivia 
as a key destination country, particularly since Peru, 
Argentina, Ecuador, and Paraguay have banned these imports. 
U.S. firms should be cautious, however, when considering 
future shipments, as the GOB's long-term policy is far from 
certain.  End comment. 
GREENLEE