U.S. Pulls Bolivia's Trade Preferences

The U.S. government has formally suspended trade preferences for Bolivia under two Andean trade programs.

Yesterday, White House Spokesperson Dana Perino announced that the U.S. was removing Bolivia’s beneficiary status under the Andean Trade Pact and the Andean Trade Promotion and Drug Eradication Act.

A document signed by President Bush on Tuesday formalized the suspensions which are set to take effect on December 15.

The Andean trade programs permit certain tariff-free exports from Bolivia, Colombia, Ecuador and Peru in exchange for cooperation in U.S.-led anti-drug efforts.

The Bush Administration was determined to remove these preferences despite the fact that both the U.S. Senate and House of Representatives favored granting Bolivia a 6-month extension.

In September the Bush Administration de-certified Bolivia claiming that the country has not done enough to eradicate coca leaf, paving the way for eliminating Bolivia from the trade program.

The U.S. government said Bolivia is not cooperating in anti-drug efforts, citing President Morales' refusal to allow U.S. Drug Enforcement Administration planes to fly over the country and his public stance on coca.

These policy moves by the U.S. are widely viewed as a reaction to Morales, who has aimed to exercise greater sovereignty over his country’s domestic affairs.

Three weeks ago, Morales suspended the work of the DEA, accusing the agency of spying and conspiring against his government. The DEA has been given three months to leave Bolivian territory.

This event was on the heels of Morales expelling U.S. Ambassador to Bolivia Philip Goldberg, who was cited for his role in creating division in Bolivia by meeting with opposition leaders such as Santa Cruz governor, Ruben Costas.

A few months earlier, coca farmers in the Chapare region of Bolivia, expelled the United States Agency for International Development (USAID) from their territory, with complicit approval by the Morales administration.

By stemming U.S. influence in Bolivia, Morales is now the target of political retaliation by the U.S. When Goldberg left the country he said Morales was making a "grave mistake".

However these programs are important to Bolivia's economy - $150 million in trade and around 20,000 Bolivian jobs are on the line.

Bolivian Finance Minister Luis Arce and other Bolivian policymakers came to Washington in October to testify before the U.S. Trade Representative Office and show the progress Bolivia has made domestically in fighting illicit coca growing and drug trafficking.

Last week President Morales traveled to the U.S., visiting Washington DC for the first time where he delivered a speech at the Organization of American States. He met with members of Congress and lobbied on behalf of improved relations with the incoming Obama administration and renewing the ATPDEA.

But while speaking at the United Nations, Morales made it very clear that the the DEA will not be allowed to return to Bolivia while he is in office.

Perino said the trade benefits can be reinstated - at the president's discretion - if Bolivia demonstrates an improvement in performance under the requirements of both programs.

Meanwhile, President Morales is seeking trade opportunities with other countries. Last month Venezuela agreed to a buy $30 million in textiles from Bolivia.