Today, a Bolivian delegation made up of prominent government officials and business leaders is in Washington. They will testify in a public hearing hosted by the United States Trade Representative (USTR) about the economic benefits of the Andean Trade Preferences and Drug Elimination Act (ATPDEA), an arrangement that gives several Bolivian products preferential access to the U.S. market. The Bush administration suspended Bolivia's ATPDEA trade preferences in late September, dealing a potential blow to the country's economy.

The Bolivian delegates are making the case for the U.S. program's importance for alternative development in coca-growing regions, and job creation nationwide. They are also seeking to defend the Bolivian government's counternarcotics program, which the Bush administration, in a September "de-certification" decision, determined does not meet its standard for full cooperation toward anti-drug goals.

The delegation is led by Bolivian Treasury Minister Luis Arce and Vice Minister of Social Defense and Controlled Substances Felipe Cáceres (whose position is similar to that of the U.S. drug czar), and includes the president of the La Paz Chamber of Exporters, Guillermo Poumont, the president of the Confederation of Private Business in Bolivia, Gabriel Babdoub and other business owners who export their products to the United States. Also, the hearing will include video testimony, compiled by the Cochabamba, Bolivia-based Democracy Center, of three Bolivian workers who will be adversely affected by the decision to suspend Bolivia's trade preferences with the United States.

According to the General Manager of the La Paz Chamber of Exporters, Fernando López, "it is important that we clearly demonstrate that Bolivia is carrying out good work in terms of counternarcotics" in addition to showing how ATPDEA is important for the Bolivian economy.

Background:

At the end of September, President Bush announced his plans to suspend Bolivia's trade preferences under the Andean Trade Promotion and Drug Eradication Act due to Bolivia's failure to cooperate fully with the United States's counternarcotics programs, despite Congress' vote to extend ATPDEA preferences to Bolivia for six months. As required by law, the USTR must post the president's announcement in the Federal Register, hold a public hearing on the topic, and accept public comments until the end of the month (a .pdf of the announcement can be found here).

At the end of the month, the Bush Administration and the USTR will take into account the testimonies at the public hearing and formal comments submitted by outside parties, and a final decision will be made as to whether President Bush will maintain his decision to suspend trade preferences to Bolivia or if they will revert to the decision agreed upon by Congress to extend Bolivia's ATPDEA preferences for six months.

As discussed on this blog before, the suspension of trade preferences under ATPDEA will have a detrimental effect on the Bolivian economy. Approximately 25,000 (U.S. government estimate) to 50,000 (Bolivian government estimate) Bolivian jobs rely on trade with the United States made possible by ATPDEA - a significant percentage of the formal-economy workforce in a country whose entire population is under 10 million. Much of this employment is in the sprawling working-class city of El Alto, on the margins of La Paz, where the country's textile industry is based. The government is also concerned that the loss of these jobs could cause an increase in out-migration to other countries such as Argentina, Brazil and Spain.

In response to the pending suspension of ATPDEA, Bolivian President Evo Morales has said "We don't have to be afraid of an economic blockade by the United States against the Bolivian people." Instead he has announced that Venezuelan President Hugo Chávez has offered to replace and even surpass the income that ATPDEA generates for Bolivia and that the Iranian Government is interested in buying the products that will no longer be for eligible to enter the United States duty-free.

Bolivian Chancellor David Choquehaunca has claimed that Bush's announcement is not the "final word" and classified his decision as "entirely political" - a result of Bolivia's September expulsion of the U.S. ambassador, rather than a consequence of anti-drug strategy. However, we will have to wait to see whether Chancellor Choquehaunca's words turn out to be true, whether President Bush is going to stick to his initial decision and suspend Bolivia's trade preferences under ATPDEA as of January 1, 2009, and if so, whether President Bush's successor continues the suspension next year.