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Viewing cable 06LAPAZ1130, BOLIVIA: ON THE CUTTING EDGE OF TRADE?

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Reference ID Created Released Classification Origin
06LAPAZ1130 2006-04-26 16:40 2011-08-25 00:00 UNCLASSIFIED//FOR OFFICIAL USE ONLY Embassy La Paz
VZCZCXYZ0001
RR RUEHWEB

DE RUEHLP #1130/01 1161640
ZNR UUUUU ZZH
R 261640Z APR 06
FM AMEMBASSY LA PAZ
TO RUEHC/SECSTATE WASHDC 8987
INFO RUEHAC/AMEMBASSY ASUNCION 5793
RUEHBO/AMEMBASSY BOGOTA 3083
RUEHBR/AMEMBASSY BRASILIA 6946
RUEHBU/AMEMBASSY BUENOS AIRES 4189
RUEHCV/AMEMBASSY CARACAS 1489
RUEHPE/AMEMBASSY LIMA 1453
RUEHME/AMEMBASSY MEXICO 1689
RUEHMN/AMEMBASSY MONTEVIDEO 3742
RUEHQT/AMEMBASSY QUITO 4129
RUEHSG/AMEMBASSY SANTIAGO 8674
RUCPDOC/DEPT OF COMMERCE WASHINGTON DC
RUEATRS/DEPT OF TREASURY WASHINGTON DC
UNCLAS LA PAZ 001130 
 
SIPDIS 
 
SENSITIVE 
SIPDIS 
 
STATE FOR WHA/AND LPETRONI 
STATE PASS TO USTR FOR BHARMAN 
COMMERCE FOR JANGLIN 
TREASURY FOR SGOOCH 
 
E.O. 12958: N/A 
TAGS: ETRD EINV ECON PREL PGOV BL
SUBJECT: BOLIVIA: ON THE CUTTING EDGE OF TRADE? 
 
REF: LA PAZ 1100 
 
1. (SBU) Summary: The Ministry of Foreign Affairs' vice 
minister of economic relations and foreign trade appears to 
believe Bolivia is gaining influence in the formation of 
regional and international trade policy.  She claims 
President Morales is assuming a leadership role in the Andean 
Community, reconsidering Bolivia's relationship with 
MERCOSUR, and designing alternative models of international 
trade, largely through his proposed Peoples' Trade Agreement 
(reftel).  The vice minister assured Econoffs that Bolivia 
has no plans to close its markets to foreign goods or 
investors, but recent policy statements call into question 
its openness to international trade.  End summary. 
 
Morales: the Andean Community's New Leader? 
------------------------------------------- 
 
2. (SBU) In an April 24 meeting with Econoffs, the Ministry 
of Foreign Affairs' Vice Minister of Economic Relations and 
Foreign Trade Maria Luisa Ramos suggested Bolivia is gaining 
influence in the formation of regional and international 
trade policy, particularly in the Andean Community.  She 
noted that President Evo Morales is gradually assuming a 
leadership role - one many of his Andean counterparts 
supposedly "expected" him to assume - and will encourage 
member countries to seek to resolve problems internally 
before consulting outsiders.  Ramos discounted Morales' April 
19 assertion, echoing Venezuelan President Hugo Chavez, that 
the Andean Community is "dead" and said Bolivia would remain 
a member of the organization, arguing that Morales has a 
vested interest in ensuring its survival and in protecting 
export markets and related jobs.  She said Morales wrote to 
his Andean Community counterparts to request an urgent 
meeting, holding this up as evidence of the Bolivian 
president's central role in decision making. 
 
3. (SBU) Colombia's ambassador to Bolivia told Ambassador 
Greenlee April 25, however, that neither Colombian President 
Alvaro Uribe nor Peruvian President Alejandro Toledo would 
agree to an Andean Community meeting whose agenda was 
determined by Venezuela and Bolivia.  News reports indicate 
that both presidents have expressed anger at their 
counterparts' accusations that they undermined the Andean 
Community by signing free trade agreements with the United 
States.  Presidents Uribe and Toledo have also said they will 
not respond to Chavez' announcement that Venezuela will 
consider remaining in the Andean Community only if Colombia 
and Peru reconsider their trade pacts. 
 
MERCOSUR: to Join or not to Join? 
--------------------------------- 
 
4. (SBU) Vice Minister Ramos recognized Bolivia's weak links 
to MERCOSUR, noting that exports consist mostly of raw 
materials and that Bolivia has long had a negative trade 
balance with the Southern Cone commercial bloc.  She said, 
however, that President Morales is reconsidering Bolivia's 
relationship with MERCOSUR and has asked GOB officials to 
research member countries' imports to see if Bolivian 
manufacturers can make and supply certain goods.  Ramos told 
us she hoped Bolivia's sales of value-added goods and 
agricultural products to MERCOSUR members would increase. 
 
5. (SBU) Ramos' eagerness to take advantage of regional 
commercial opportunities does not coincide with what we have 
heard from Brazilian government representatives.  Brazilian 
Embassy official Octavio Cortes told Econoffs April 20 that 
Brazil had twice offered MERCOSUR membership to Bolivia, only 
to be told that Morales would "analyze" the proposal.  Brazil 
also offered in January to send a delegation to Bolivia to 
discuss opportunities for mutual cooperation, but the 
Brazilian Embassy received no response until early April. 
Ramos made no mention of the delegation's visit or the offer 
to join MERCOSUR, which suggests Bolivia has at best an 
ambivalent attitude toward the organization. 
 
Bolivia: Paving a New Path to Development? 
------------------------------------------ 
 
6. (SBU) Ramos assured us that President Morales' proposed 
Peoples' Trade Agreement (reftel) was official GOB policy, 
although it was still "being consulted" among government 
officials and with the Bolivian public.  Ramos insisted 
Bolivia would chart its own path to economic development, 
declaring that Bolivia is not following others' 
recommendations and pointedly denying that Morales relies on 
Chavez for guidance.  Bolivia is open to international trade, 
Ramos said, but since the policies of the past 20 years have 
failed to produce the economic gains many expected, 
government officials have no choice but to develop new 
formulas for growth.  The search for alternatives apparently 
applies not only to the United States, but also to other 
trading partners, as news reports indicated April 26 that 
Bolivia, Venezuela, and Cuba would sign a Peoples' Trade 
Agreement to strengthen the countries' commercial ties. 
 
Comment 
------- 
 
7. (SBU) The vice minister assured us that Bolivia has no 
plans to close its markets to foreign goods or investors, but 
recent policy statements call into question its openness to 
international trade.  Morales' description of the Peoples' 
Trade Agreement stated that any bilateral pact should limit 
market liberalization and the rights of foreign investors and 
protect small producers, clearly indicating a desire to 
raise, not lower, trade barriers.  While Ramos did not 
dismiss the possibility of future trade negotiations, she 
seemed skeptical of U.S. motives and our willingness to 
engage in genuine debate.  This skepticism, together with 
Bolivians' inflated view of their role in the regional and 
global economy, will make common ground increasingly hard to 
find. 
GREENLEE