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Viewing cable 06LAPAZ691, BUSINESSMEN EXPAND PUSH FOR FTA, STRUGGLE WITH

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Reference ID Created Released Classification Origin
06LAPAZ691 2006-03-14 19:29 2011-08-25 00:00 UNCLASSIFIED//FOR OFFICIAL USE ONLY Embassy La Paz
VZCZCXYZ0032
RR RUEHWEB

DE RUEHLP #0691/01 0731929
ZNR UUUUU ZZH
R 141929Z MAR 06
FM AMEMBASSY LA PAZ
TO RUEHC/SECSTATE WASHDC 8419
INFO RUEHAC/AMEMBASSY ASUNCION 5680
RUEHBO/AMEMBASSY BOGOTA 2947
RUEHBR/AMEMBASSY BRASILIA 6825
RUEHBU/AMEMBASSY BUENOS AIRES 4059
RUEHCV/AMEMBASSY CARACAS 1382
RUEHPE/AMEMBASSY LIMA 1298
RUEHME/AMEMBASSY MEXICO 1669
RUEHMN/AMEMBASSY MONTEVIDEO 3632
RUEHQT/AMEMBASSY QUITO 4022
RUEHSG/AMEMBASSY SANTIAGO 8545
RUCPDOC/DEPT OF COMMERCE WASHINGTON DC
RUEATRS/DEPT OF TREASURY WASHINGTON DC
RHEHNSC/NSC WASHINGTON DC
UNCLAS LA PAZ 000691 
 
SIPDIS 
 
SENSITIVE 
SIPDIS 
 
STATE FOR WHA/AND LPETRONI 
COMMERCE FOR JANGLIN 
TREASURY FOR SGOOCH 
STATE PASS TO USTR FOR BHARMAN 
 
E.O. 12958: N/A 
TAGS: ETRD EINV ECON PREL PGOV BL
SUBJECT: BUSINESSMEN EXPAND PUSH FOR FTA, STRUGGLE WITH 
ANTI-TRADE ORGANIZATIONS 
 
REF: LA PAZ 544 
 
1. (SBU) Summary: In recent meetings with GOB officials, 
business representatives have expanded their push for 
Bolivia's entry into the proposed Andean Free Trade Agreement 
(reftel), urging the Morales administration to pursue 
comprehensive trade negotiations rather than an extension of 
the Andean Trade Promotion and Drug Eradication Act.  They 
have told us President Morales seems open to their views and 
has asked for an explanation of the benefits of a broad 
agreement.  Exporters have responded to Morales' request and 
emphasized the difficulty of competing without trade 
preferences, but their arguments have been countered by 
prominent anti-trade organizations, which enjoy a close 
ideological affinity with many of the president's closest 
advisors.  End summary. 
 
2. (SBU) In a March 9 meeting with President Evo Morales, 
leading Bolivian businessmen expanded their push for 
Bolivia's entry into the proposed Andean Free Trade Agreement 
(reftel), urging the GOB to pursue comprehensive trade 
negotiations rather than an extension of the Andean Trade 
Promotion and Drug Eradication Act (ATPDEA), which expires 
December 31, 2006.  Marcos Iberkleid, President of Ametex, 
Bolivia's leading apparel manufacturer and largest private 
employer, told Morales that an ATPDEA extension was not in 
the country's best interest, as it would only maintain 
current levels of exports and export-related jobs rather than 
raise them, as a broad trade agreement would. 
 
3. (SBU) Iberkleid told Econoff that Morales admitted the 
argument was new to him.  Iberkleid and one of his 
counterparts, Exportadores Bolivianos President Eduardo 
Bracamonte, a leading exporter of gold jewelry, agreed that 
Morales seems open to the business community's views and is 
more pragmatic and less ideological than many of his 
advisors.  The president asked exporters to explain the 
benefits of a broad trade agreement, which Iberkleid and 
other businessmen did in a March 10 meeting with Minister of 
Planning Carlos Villegas and will do again in a March 15 
meeting with Villegas and other GOB officials, including 
Maria Luisa Ramos, the Ministry of Foreign Affairs' Vice 
Minister of Economic Relations and Foreign Trade.  Villegas 
reportedly told exporters to search for new markets, 
apparently unconvinced the United States is crucial to their 
businesses. 
 
4. (SBU) In conversations with GOB officials, exporters have 
emphasized the difficulty of competing without trade 
preferences.  Iberkleid has repeatedly said that many of his 
4,500 workers will lose their jobs if the company's apparel 
exports lose their edge to cheaper Chinese and Southeast 
Asian products, noting that certain articles could face 
import duties of up to 20 percent in the absence of 
preferential trade arrangements.  Bracamonte has threatened 
to dismiss his 2,800 employees, most of them in El Alto, and 
abandon Bolivia for Peru or Chile, where investment is less 
risky and supplies and labor are relatively cheap.  Another 
exporter, United Furniture Industries President George Satt, 
told Econoff he has begun looking for new clients, as the 
company's largest buyer, Home Depot, is wary of doing 
business if the firm's exports of patio furniture could lose 
ATPDEA benefits.  Like Bracamonte, Satt would encounter U.S. 
import duties of up to 6 percent, which would make his 
products uncompetitive. 
 
5. (SBU) Comment: Exporters' arguments in favor of an FTA 
have been countered by prominent anti-trade organizations, 
which enjoy a close ideological affinity with many of 
President Morales' closest advisors, among them Minister 
Villegas, Vice Minister Ramos, and Vice President Alvaro 
Garcia Linera.  Businessmen believe these three listen 
closely to Pablo Solon, head of the influential anti-trade 
 
Solon Foundation, who told Econoffs in a separate March 10 
meeting that he remained convinced a free trade agreement 
would undermine Bolivia's sovereignty and harm small 
producers.   In the face of such arguments, business 
representatives have become increasingly frustrated, 
recognizing that it will be difficult, but not impossible, to 
persuade the GOB to pursue comprehensive trade negotiations. 
An ATPDEA extension seems more attractive to Morales and his 
advisors, but USG officials' statements that an extension is 
unlikely appear to have fallen on deaf ears, leaving many 
businessmen lamenting Bolivia's economic and political 
uncertainty and doubting their push for an FTA will bear 
fruit.  In the end, Morales will be forced to make a 
difficult decision, one which will place his political 
ideology at odds with economic pragmatism.  End comment. 
GREENLEE