Thursday, July 02, 2009

President Obama Ends U.S. Trade Preferences for Bolivia

Since he took office five months ago, President Barack Obama has had to show his political cards on one issue after another. How interventionist would he be dealing with the collapsing financial system? How far toward state-run care would he go on health reform? Where would he stand on gay marriage? What kind of candidate would he put on the Supreme Court? How soon would he pull troops out of Iraq and how many would he put into Afghanistan?

On the political back burner, behind these high profile questions was another one: How will President Obama play the complicated cards of the U.S. relationship with Latin America – in what ways would he be different than President Bush and in what ways would he be the same?

This week two issues have forced President Obama to show some of his cards on Latin America. The first is his response to the military coup in Honduras. The second is his announcement last Tuesday that he is ending U.S. trade preferences for Bolivia. Both reveal something of the new President's political math as he deals in earnest with his neighbors to the south.

The Honduran coup was probably not a tough call for the administration. It doesn't take much political courage to oppose the first military coup in Central America in a quarter century (though some have charged that the administration's initial condemnation of the coup could have been stronger). Nevertheless, it was a welcome break from the days of April 2002 when the Bush administration gave comfort and support to the short-lived coup against Venezuelan President Hugo Chavez.

Bolivia – Following in Bush’s Footsteps

On Bolivia, however, President Obama took a very different stance this week – putting himself squarely in alignment with the policies of the President Bush.

Last September, when the governments of Bolivia and the U.S. were playing an escalating game of diplomatic tit-for-tat, beginning with President Evo Morales' expulsion of the U.S. Ambassador, President Bush overruled Congress and suspended U.S. trade preferences with Bolivia. The move put at least 20,000 Bolivian jobs at risk.

The Bush administration's official basis for the suspension was that it had “decertified” Bolivia's anti-narcotics efforts, charging that Bolivia had failed to fulfill its commitments to fight illegal drug trade in the country. By U.S. law, those ATPDEA trade preferences are tied to Bolivia's anti-narcotics efforts. But coming as it did square in the midst of diplomatic battle, and contrary to a bipartisan vote in Congress to continue those preferences for Bolivia, it seemed clear that the Bush administration’s move had a lot more to do with politics than drugs.

Since January those watching the issue – especially thousands of workers in textile factories in Bolivia's impoverished highlands – have been waiting hopefully to see whether President Obama would reverse the Bush policy. On Tuesday the President announced that he would not. In fact he made the suspension of the trade preferences permanent.

"No duty-free treatment or other preferential treatment…shall remain in effect with respect to Bolivia after June 30, 2009," reads the ruling from the Office of the U.S. Trade Representative.

So what was behind President Obama's decision on Bolivia?

Administration representatives and defenders will argue that it was a straight up ruling that Bolivia's anti-narcotics efforts do not meet the standards required to continue the trade preferences. The Trade Representative's Office writes in its findings, "The current challenges include explicit acceptance and encouragement of coca production at the highest levels of the Bolivian government," and it argued that a large portion of that growing crop is headed for cocaine production, not herbal tea. That finding was also buttressed by a new United Nations report this month claiming that cocaine production in Bolivia has increased by 9% over the past year.

Analysts with more expertise than I have, on all sides of the issue, can debate the statistics and the evidence about Bolivian coca's ultimate destination. But anyone living in Cochabamba can tell you that the hills on the outskirts of this valley are populated by a growing number of clandestine operations devoted to turning coca into cocaine. When the Obama administration argues that its decision is simply a strict reading of the facts and the law, it has a case.

However, other observers more skeptical of Washington’s moves will attribute the decision to other considerations.

Some may suggest that, in its dealings with the combative Morales, the Obama team decided that Bolivia might make a nice line in the sand – a signal that, while it intends to be more friendly toward some of the governments the Bush administration loathed, Obama's Washington still has its limits. President Morales has not done himself many diplomatic favors in his dealings with the new administration. This includes his breaking up the warm handholding at the April Summit of the Americas with a demand that President Obama publicly declare himself free of involvement in an alleged assassination conspiracy against Morales.

Others with even more sinister suspicions may claim that Washington is subtly trying to weaken Morales politically in advance of December’s Presidential election. The end of the trade preferences pits two parts of Morales’ political base against one another – coca growers who benefit from increased cultivation and workers in the factories who may now lose their jobs because of that increased growing.

I myself am not big on conspiracy theories.

What is not in question, however, is that the announcement from Washington on Tuesday signals an end to whatever shaky honeymoon existed between Obama and Morales. Bolivia's President wasted no time in pouncing on his counterpart in the north. “President Obama lied to Latin America when he told us in Trinidad and Tobago that there are not senior and junior partners,” he declared in La Paz. He added, “Even if the appearance of the government in the United States has changed, the politics of the Empire haven’t.”

We can probably expect rhetorical attacks aimed at President Obama to become a part of Mr. Morales' speeches on the stump as he heads into December's elections for President, as attacks aimed at President Bush have been before.

In fact, one result of the political machinations between the Obama administration and Latin American leaders in recent months is that President Morales seems to have replaced President Chavez as the South American ‘bad boy’ in terms of relations with the U.S. While Chavez is gifting books to President Obama and exchanging ambassadors once again, Morales seems more and more isolated as Mr. Obama's chief critic in the region.

But What About the People?

All this is about the politics and the political calculations involved in these matters, the stuff on which political analysts and political followers tend to dwell. But what about the people affected by all this? Where do they fit in to the political calculations in Washington and La Paz?

One other thing that is certain as a result of the Obama administration’s Bolivia decision is that thousands of workers here are now likely to lose their jobs. This brings me back to the fundamental question we asked in September when President Bush first suspended the trade preferences, the same question we put forward in the video of worker testimony (click on the frame above) that we showed in Washington in October when the Trade Representative held its hearing on this issue:

Why is it in the interest of the United States to put these people out of work?

The answer is, it isn’t.

Just today, President Obama spoke of his concern for the rising number of unemployed in the U.S. Too many families, he noted, worry about "whether they will be next" to lose their jobs. Being thrown into unemployment in Bolivia, where economic opportunity is scarce, is no better. But nowhere does that show up in the Obama administration's Bolivian calculation.

Another thing that it is certain about the impact of President Obama's decision is that it won't do anything to combat the production of cocaine in Bolivia. If anything, it will make things worse. Putting tens of thousands of people out of work is only likely to push more of them into some kind of involvement with the illegal drug trade. That is a fact that should not have been hard for analysts in the administration to understand.

So What Will Obama Do that is Different than Bush?

President Obama has made clear this week at least one way in which he is content to copy the policies of President Bush. Now the question is whether, on the issues of illegal drugs and trade, he is willing to demonstrate some of that creativity he promised to do things differently than Mr. Bush.

Here are two ways he can do just that.

First, the Obama administration could recognize the basic fact that helping create honest work in Bolivia is simply good policy for both Bolivia and the U.S. It should find a way to quickly restore the trade preferences without any link to drug policy. That is how it should have been from the start and doing so now would demonstrate genuine political courage and intelligence. Those preferences are about the thousands of workers impacted and the thousands more they support. Their future should not be dependent on coca production they have nothing to do with or whether their President tosses public insults at Washington.

Second, if the Obama administration is serious about wanting to help reduce cocaine production in Bolivia, it should move past policies that don't work and start adopting new ones that have a chance.

That begins by not insisting on making the U.S. a central player in Bolivia's anti-narcotics program. Washington's "Drug War" has a horrific history here, including giving Bolivian prosecutors special U.S. salary as an incentive to put thousands of innocents in jail. The U.S. will never be trusted here on drug policy. A serious U.S. strategy to combat illicit Bolivian coca would encourage more involvement by Argentina and Brazil, two governments that have far more cordial relations with Morales and whose people are the real target for the cocaine produced here, not the U.S.

A genuine approach would also make the logical distinction between the coca leaf, which is not an illicit drug, and cocaine, which is. Supporting the legal export and sale of products such as coca tea – served and recommended by the U.S. Embassy in La Paz – won't soak up all the leaves headed for processing into cocaine, but it will make a difference and create honest employment.

Both these directions would mark a radical departure from the myopic policies the U.S. has pushed here for more than two decades, but they make sense.

What's left now is to see is whether President Obama has a few cards left in his hand that he hasn't played, ones other than those he just picked up when President Bush left them behind on the table last January.


Anonymous Anonymous said...

but why the heck should the u.s. Subsidize a regime such as morales'? The Bolivian president is so stupid that be believes that the splurion for his country problems is socialism... Didn't he learn about the twentieth century?! The best that Obama can do for the benefit of the people of Latin America is to give a cold shoulder to the rulers that use hate against the united states as political currency or that adopt policies that everyone knows are flawed and have failed in every single country where they were adopted before.

11:22 PM  
Anonymous Anonymous said...

Okay, I see your logic (above):

A. The people of Bolivia suffer from having a bad President.

B. To get him to be better, we will make the people of Bolivia suffer more by eliminating their jobs.

Does that about capture it?

11:38 PM  
Anonymous Anonymous said...

Anonymous 11:38,

You're close. You've almost got the math there for a steady-state functioning democracy.

However, you left out the critical feedback step (C) which says that the people can decide that they don't want to suffer. They can take responsibility for their futures and choose to elect a different leader. They can base that choice on whatever they think is the best future policy for their country.


This does, of course, assume that elections are fair processes conducted within an established, understood legal framework.

Without military coups.
Without blockades or civil strikes.

Unfortunately, in Bolivia, the current government has all but dismantled the legal bindings of the country. The increase in narcotics income flows into the hands of social movements and the military.

I'm pretty sure you'll see the government flow some of that white money goodness toward the unemployed in El Alto (due to the loss of ATPDEA). Not a sustainable solution... but it is one that will ensure Evo more base support ahead of the election.

Still, I agree with the original comment - this regime and its ineptitude are problems that belong to Bolivia.

12:16 AM  
Anonymous Anonymous said...

OK, let's start with ATPDEA. President Obama canceling the preferences is not "following the Bush administration's policies", it's following THE LAW. By every measure, Bolivia is sliding into a narcoabyss. But, in America, the government tends to follow THE LAW. And the law stated that if cooperation stops, trade preferences stop (more or less - call that paraphrasing).

As far as Bolivians losing their jobs...I agree. Sad. But, if their President, who was elected with more than 50% of the vote, wants to do something about it, sign a TLC with the US that has nothing to do with counternarcotics. Fine. But it's tough to do that when you're running around calling capitalism "the devil". Which brings up an interesting point - why does a self-proclaimed socialist who seems to hate the US care about trade preferences through ATPDEA? Sounds like doble discurso to me.

12:21 AM  
Anonymous Anonymous said...

Subsidize? Who? Whom?
Wall street, Crysler, GMC, Halliberton?
25 million dollars to buy bolivian products, is not even 0.00001 % of the trillions wasted by the corrupted in usa. Win the hearts and minds of the people in Bolivia, how? as damm Obama's advisers hired and paid by Goni Sanchez de Loazada are doing?
what is next? a coup? this is like a game, who cares if people looses jobs, afterall how many unemployed are in the streets of USA? so why would they care about the bolivian ones? Keep sending illegal bolivians to Virginia, just like the Honduras, Nicas, Mexicans, did, afterall why take 25 Millions if one million cochabambinos can send more than 600 millions from Virginia and California?
Screw Clinton, Obama and their stupid ill conceived decisions about Latin America. Keep migrating to USA, in a few years, english will the second language. Why bother with ATPTEA ? send planes full of coca producers and cocaine production will decrease, in Bolivia. I heard heroine in Afganistan is cheaper and subdized so what a heck.

12:25 AM  
Blogger Norman said...

"One other thing that is certain as a result of the Obama administration’s Bolivia decision is that thousands of workers here are now likely to lose their jobs."

As a result of the Obama decision??? Jim, you've been on a roll making sensible arguments for the last several posts. Where does this come from? This is clearly as a result of the morales administrations decisions whose policies have beyond a shadow of a doubt led to a substantial increase in cocaine production since the day he took office. You want a solution without the US? Fine; if morales cares about the lost jobs, then he should make some recognizable effort to stem the flow of drugs. How can someone so intimately involved in the process not know how to do this? Why has his progress here been so abysmal? It almost seems as if he doesn't want to stop the this illicit trade in drugs! Jim, morales has NO intention whatsoever of reducing cocaine production. Do you honestly believe that the reigning president of the coca growers union has no idea where his product is going or which "drug lords" are buying it? Laughable!

1:29 PM  
Anonymous Anonymous said...

It is truly sad that Bolivian workers will lose jobs over this; however, I tend to agree with the fact that these lost jobs are not the fault of the Obama Administration, but that of the Morales Administration. The ATPDEA is essentially a simple agreement in which there are certain responsibilities and expectations of each party. Bolivia's responsibility is to fight against cocaine production. In exchange for that, the US is expected to give them access to a market in which to sell their goods.

If either party does not comply with their duties, it is logical that the agreement will cease to function, otherwise their would be no sense in having an agreement. When the Morales Administration first came to power, they started immediately promoting the production of Coca. I recall there would be little "ferias" in the streets boasting coca products; toothpaste and shampoo amoung others. This quickly faded as the reality set in that nobody wants to wash their hair or brush their teeth with coca. But what happened to all those extra plantations? I think that's obvious... and the production of cocaine rose steadily.

The US then suspended the ATPDEA, which was logical, and it is also legitimate to say that it was a back lash against Morales from the Bush Administration. In the words of Chris Rock; I may not agree with the Bush Administration, but I can understand; you can only get punched in the face so many times before hitting back.

It was also logical that Morales would retaliate; because the US suspended the ATPDEA, he decides to kick the DEA out of the country. After all, why should Bolivia comply with US drug policies if the US is not holding up their part of the deal? Apparently, the Morales Administration has the same logic as the Obama Administration, but because Morales always likes to be seen as the victim, he bitches and whines about it and says stupid things without using his brain, that only make the problem worse. Do you think Morales would let the DEA back into the country just to be nice?... um, no... nor should he... unless of course he thinks the ATPDEA is important to the citizens of Bolivia, which he apparently doesn't. Jim tends to hold the US in a higher regard, saying they should be the bigger "man" and take the first step towards better relations; giving in so to speak. I tend to agree with this, but I don't think their moral responsibility is any greater than that of Morales'.

Additionally, it needs to be said that most of the workers who will find themselves unemployed are from El Alto, a Morales stronghold; it is safe to say that most of these workers voted for Morales. The reason that Morales gained as much support as he did is because of anti-US rhetoric and additionally a stupid comment made by the US embassy several years ago, telling people not to vote for him, when really not many people had planned to.

So to say that the people that voted for him really had no idea that he would implement such policies would be rediculous... c'mon, he is and always was openly anti-US, and additionally he was and still is leader of the cocaleros. Anyone who couldn't see this coming is a little naive.

2:53 PM  
Blogger El Grindio said...

What is the impact of losing the tariff exemptions?

The trade was only $25 million, with those goods comprising the bottom-feeder garments.

The loss of that market segment has been mitigated substantially by opening up Venezuela's market, $12 million at last count. The balance can be made up and surpassed by taking advantage of the subsidies Morales is offering. Those subsidies make up for the costs of the tariff.

Bolivia should look to China and implement some their strategies (eg currency manipulation, export subsidies etc) if they really think Bolivians cannot be trained to compete on any other level than by being the cheapest source.

As to drug trafficking, Peru, Colombia and Afghanistan are the real pariahs. Recent busts show Morales can be more effective than the DEA, those shadow drug traffickers (see Iran Contra and relevant literature) and coup-enablers.

What this is all about is hegemony and Obama's firm commitment to preserving the US as the hegemon for the benefit of his corporate constituency. "Change, you can believe in" was just a political slogan that resonated with voters, upon collapse of the financial markets that decimated so many of our assets.

Peter Townsend said it best: "See the new boss, same as the old boss"(from "Tommy", a rock opera by the Who).

4:34 PM  
Blogger Norman said...

"Recent busts show Morales can be more effective than the DEA..."
Once again laughable. Of course he can make big drug busts. I predicted that he would do just that over three years ago! As to the real pariahs... give him time. He's just getting started.

8:46 PM  
Anonymous Anonymous said...

Happily, Obama has snubbed Morales. The Bolivian dictator that has done away with fair elections, term limits, free speech, due process of law, and foreign investment has not earned special treatment from the USA. He must answer to the people that elected him. But before he is finished, he will have divided Bolivia into two countries.

11:32 PM  
Blogger said...

Un saludo y espero puedan publicar este lo siguiente: la web portal de Bolivia con noticias, televisión en vivo, radios, actualidad, historia, etc. Web de arte de Bolivia con artesanías, pintura, literatura, música, artistas, etc. web de anuncios clasificados web sobre autos, carreras y deportes en ruedas web de contenido adulto formado web con contenido para gente de criterio formado web de la construcción, arquitectura, diseño, ingeniería, inmobiliario web de museo de arte sacro, religioso, cristiano web de Bolivia con información del país, ofertas, noticias, etc.

11:52 PM  
Anonymous Anonymous said...

Dictator? Done away with free speech? Just read all the elitist lies of all the newspapers, listen to the news of Bolivision, ATB, etc, etc, Due process? I am most surprised that the corrupted Costas, Manfred, Goni, are not in jail yet. Bolivia will be one, once all the croats, neonzis, and right wing extremists and terrorist of Santa Cruz are placed where they belong. In jail, concentration camps, or back in their countries of origen. Two bolivias? We always had two, the mayority of poor exploited natives, and the newcomers from overseas, as well as the cholos wanabes.
One Bolivia with Evo.

12:01 AM  
Anonymous Anonymous said...

The "golpista fracasado", Prefect Ruben Costas of Santa Cruz, who recently made a favorable comment about the coup d’état in Honduras is probably scheming a new move against Morales. ‘News reports’ about the spike in coca production in Bolivia is usually the first attack wave of the destabilizing forces that operate in Bolivia.

Regarding ATPEA, too bad the current administration continues to follow the advice of the failed democracy builders who write the US’s policy for Latin America.

Thankfully, the current Honduran crisis has put a spotlight on the so called “defenders of democracy” e.g. Roger Noriega, former US ambassador to the Organization of American States who said the following about the OAS’s condemnation of the Honduran putsch:

“Well, I think that the OAS should answer for its failures in Ecuador, in Bolivia, in Nicaragua, in Venezuela, and in Honduras before it makes judgments about what the Honduran people are doing to save their own democratic institutions.”

I wonder if the good Ambassador also sanctions the media blackout and mass arrests currently taking place in Honduras.


12:12 AM  
Anonymous Anonymous said...

I agree that the origin of the decision is law, facts and bureacracy. So probably, there is a second chance, for Morales and advisers to show their skills and effort in renegotiating another treaty. However, whether he succeds or not is not really going to make a big difference in the December elections. If anything, reinstating the trade preferences could help Obama improve his image, so that further antagonism from Morales government is no longer justified.

9:05 PM  
Blogger Norman said...

What incentive has morales given Obama to want to improve relations with Bolivia? It would not help improve his image because morales would just search out another way to insult the US. morales had the opportunity to improve his image when Obama entered office. He chose to continue an antagonistic route when even Chavez was making overtures. Again, this is not about Obama (or Bush, Clinton, or Teddy Roosevelt). It's about morales.

12:37 AM  
Anonymous Anonymous said...

Antagonistic is not equal to be controlled, dominated, subservant, as all bolivian presidents have been in detriment to the people of Bolivia. Morales the problem? Was Martin Luther King antagonistc?

12:11 PM  
Blogger Frank_IBC said...

El Gridiota wrote: "Peter Townsend said it best: 'See the new boss, same as the old boss'(from 'Tommy', a rock opera by the Who)."

Jajaja, burro... that's from the song "Won't Get Fooled Again", which is in neither the album nor the film "Tommy", but in the album "Who's Next".

11:49 PM  
Anonymous Anonymous said...

Frank_IBC: It's 14 year old El Grindio trying to sound intelligent and grown up.

6:32 AM  
Anonymous Anonymous said...

Morales sucks

6:46 PM  
Blogger Clint said...

I think there's more to the Honduran situation than meets the eye, as far as the U.S. role goes.

The general in charge of the coup is a graduate of the School of the Americas, as was the head of the Air Force (in charge of physically removing the president to Costa Rica).

Reporting in the NYT says that high-level officials were in contact with coup planners up until the actual date.

Further, the U.S. has failed to officially label the event a "coup," which means that they are not legally obligated to freeze all aid to the new, illegitimate government.

I wrote more about the U.S. connection to the coup here:

1:05 PM  

Post a Comment

Links to this post:

Create a Link

<< Home