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.

Ambassadorial Moves

Last September, in the midst of violence by opposition groups in the Bolivian departments of Santa Cruz and Pando, President Evo Morales accused U.S. Ambassador Phillip Goldberg of having a clandestine hand in that violence and ordered him out of the country.

That set off a chain reaction of diplomatic tit-for-tats. The Bush administration kicked out Bolivia's ambassador to Washington, Gustavo Guzman, then "decertified" the Morales government's anti-coca program and based on that cut Bolivia from the ATPDEA trade preference program. Unable to resist a good diplomatic mud-wrestling match with Washington, Venezuelan President Hugo Chavez pushed himself into the game and kicked out the U.S. ambassador to his country as well, leading to the Bush administration's ouster of Venezuela's ambassador to the U.S.

By the time it was over. this diplomatic version of "screw you, no screw you", left behind four embassies operating on auto-pilot, a path or torched diplomatic relations, and with the elimination of the trade preferences, thousands of Bolivian workers with their jobs on the line.

Well, this week, as part of the ongoing game of making nice between the Obama administration and the Chavez government, the two countries announced that they are returning their respective ambassadors to Caracas and Washington. U.S. Ambassador Patrick Duddy and Venezuelan Ambassador Bernardo Alvarez are dusting off their suitcases and getting ready to return to their former diplomatic outposts. This follows Obama's and Chavez's "all smiles" visit in April at the Summit of the Americas in Tobago.

So what about the diplomatic rift that started it all, between the Washington and La Paz?

Interestingly, even as Chavez, the supposed "bad boy" among the South American left presidents is rebuilding bridges, Morales' moves with the U.S. are still sour. At Tobago, while Chavez was handing Obama a book to read, Morales was demanding that the U.S. President declare that his fingerprints weren't on the alleged assassination conspiracy linked to four men killed by government troops in Santa Cruz.

So, will U.S. and Bolivian ambassadors be returning to their posts anytime soon? Certainly, the same ambassadors won't be, as in the case of Venezuela.

Former Ambassador Goldberg probably wouldn't choose to return to La Paz for all the saltenas in Cochabamba, given the constant state of combat between he and Morales. This week Mr. Goldberg was handed his new U.S. diplomatic assignment, leading the U.S. team in charge of implementing sanctions against the government of North Korea over its recent atomic tests. That probably fits Mr. Goldberg better anyway, who in Bolivia seemed much more at ease chastising foreign leaders than forming good relations with them, a task that Morales never made especially easy.

Former Ambassador Guzman, who I visited with a couple of months after his return to La Paz, probably wouldn't head back to Washington for all the Starbucks coffee in Dupont Circle. He and his family, including a new baby, seemed quite happy to be back home in Bolivia once more.

This past week Secretary of State Clinton sent an emissary to talk with Morales, following up on a high level U.S. diplomatic mission here not long before. Clearly the Obama administration would like to get its Bolivian relations in order. Where Morales is on this is anyone's guess.

But if an announcement between La Paz and Washington is forthcoming, akin to the one this week between Washington and Caracas, both countries will have to go through the process of nominating and approving a new pair of ambassadors.

In Washington that process will likely go smoothly, with few in the Senate likely to challenge whomever President Obama selects (I am betting on a Latino or Latina). In La Paz the case may be different. The opposition in the Senate already denied, last year, President Morales' appointment of Pablo Solon as Ambassador to the UN (he now essentially serves in that post, but under a different title). That was pure politics, given the fact that Solon is probably the most able representative Bolivia could have in the U.S.

So watch in the next week or two for signs that Bolivia and the U.S. are ready to follow suit with Venezuela and refill the ambassador positions in their respective capitals. And then watch for it to get weird, as U.S./Bolivia relations just seem to have a tendency to do.

Bolivia and Peru in War of Words Over Indigenous Deaths

Dear Readers:

Due to my absence for work in Eastern Europe earlier this month we are still catching up on recent news here on the Blog. Included in that is the recent blow-up between the governments of Bolivia and Peru, stemming from the violent clash on June 5th between government officers and indigenous people in Bagua.

Below is a post on these events from Aldo Orellana and Kris Hannigan-Luther.

Jim Shultz

Bolivia and Peru in War of Words over Indigenous Deaths

Written and translated by Aldo Orellana and Kris Hannigan-Luther.

Trade Agreements and protests have been in the news again and the tensions between the governments of Bolivia and Peru have heightened.

While varying reports have come out of the events in the Peruvian Amazon over the past few weeks and months, all sides seem to agree that what is at the base of the actions is the implementation of the U.S. - Peru Free Trade Agreement.

The task of the Peruvian government is the opening up of national laws to encourage foreign investment and to meet the requirements of the Free Trade Agreement. As such, the government has issued decrees that would open the Amazon to petroleum exploration, mining, logging mono-cropping and hydroelectric dams.

Indigenous groups in opposition to these decrees claim that they are unconstitutional and began non-violent protests in April, blockading roads, railways and rivers. Peru’s President, Alan Garcia, issued a state of emergency in the areas affected by the protests on May 9th.

On June 5th a deadly clash occurred between the indigenous protesters and the state police in the northern department of Bagua. Initial reports claimed that around 20 civilians and police officers were killed, but subsequent reports put the figure much higher- at 35 people killed, including indigenous people and police officers, and hundreds injured. Read an article from The New York Times here for an account of the clash on June 5th. Upside Down World posted an article on the violent clash. Read it here.

Human Rights Watch has crafted a letter to Peru’s Attorney General. Read the full text here. According to the letter, Human Rights Watch has learned that some witnesses allege law enforcement agents threw bodies of several protesters into the river.

Amazon Watch has written a letter to Peru’s President. Read the full text and action alert here.

The Andean Coordinating Body for Indigenous Organizations (CAOI), which includes indigenous organizations from Bolivia, Ecuador, Peru, Colombia, Chile and Argentina, describes the situation as follows: "Once again they are trying to impose death over life, massacre over dialogue. This is the dictatorial response after 56 days of peaceful indigenous struggle and supposed dialogue and negotiation, which ended with bullets as always, the same bullets of more than 500 years of oppression."

A member of our staff participated in the IV Continental Summit of Indigenous Peoples in Puno, Peru in late May where representatives of Peru's Amazonian Indigenous were present. Leaders at the summit called for international solidarity to safeguard the Amazon.

Our staff member heard powerful testimony from an indigenous woman from the Amazon, whose son enlisted in military service because of his family’s poverty. The son’s unit was later sent to attack his own community. While crying, this woman explained that they are sending their own children away because of an economic need, but then the government is teaching them to kill their own people.

So what does this have to do with the relationship between Bolivia and Peru?

Peru’s ambassador to Bolivia, Fernando Rojas, has classified the state of relations between the two countries as “worrying,” after denying Evo Morales’ assessment that what happened in Peru June 5th was genocide.

As reported by Los Tiempos, Bolivian President, Morales, said, "What happened in Peru, I am convinced, is the genocide of TLC (Free Trade Agreements), of privatization, the delivery of the Amazonian forests of South America to the transnationals."

Last Monday, a Bolivian government official from the MAS party, Gustavo Torrico, publicly compared Peru’s President to a Bolivian ex-President, Gonzalo Sanchez de Lozada. Claiming that both Presidents were attempting to impose a neoliberal economic model and that both Presidents were responsible for massacres. Read the report in the press in Spanish here.

Rojas returned to Lima yesterday for consultations with the Peruvian government. This act demonstrates a strong rejection of Bolivian statements following the violent clash in the Amazon June 5th.

Following this clash and the subsequent media attention, the Peruvian government has temporarily suspended the decrees. See New York Times June 10th article here and a press release from Amazon Watch here.

However, the indigenous communities claim that this suspension of the decrees will not be sufficient to end their opposition. Instead, they are demanding that the decrees be completely repealed.

World Leaders and Civil Society Groups Meet on Global Financial Crisis

Readers:

This week fourteen heads of state and a host of other national leaders will join together at the United Nations in New York for a summit meeting on the global financial crisis. In association with those meetings a series of 'side meetings' and public forums will be taking place, in which citizens and civil society organizations from around the world will also be talking about the financial crisis and what needs to be done to defend the interests and well-being of average people.

Below is a Blog by Kris Hannigan-Luther of the Democracy Center about those events, including one that the Democracy Center is co-hosting this evening.

Jim Shultz

World Leaders and Civil Society Groups Meet on Global Financial Crisis

Written by Kris Hannigan-Luther

Watch for news coming out of New York this week on the United Nations Conference on the World Financial and Economic Crisis and its Impacts on Development. During this three-day summit of world leaders the aim is “ to identify emergency and long-term responses to mitigate the impact of the crisis, especially on vulnerable populations, and initiate a needed dialogue on the transformation of the international financial architecture, taking into account the needs and concerns of all Member States, “ according to the U.N. website.

In and around the New York headquarters of the U.N., a broad-based coalition of international, national, and local civil society organizations and networks, is organizing the “Peoples´ Voices on the Crisis” side events in order to showcase the real human and environmental impacts of the crisis, as well as to provide a space for civil society activists to discuss how to build a global movement to ensure that these potential solutions to the crisis are built upon the principles of respect for human rights and the promotion of environmental sustainability.

The Democracy Center will be participating with our U.S. partner, Institute for Policy Studies, to bring attention to the related issue of trade agreements' foreign investor rights. Our team here at the Center has invested many hours over the past several months on this issue of excessive “investor protections” in bilateral trade agreements and investment treaties.

If you live in the New York area, join us for a panel discussion at 7:30 at the Brecht Forum. The title of the panel discussion is “Towards a People-Centered Economy: Alternative responses to the Crisis.“ The panelists include: Sarah Anderson from Institute for Policy Studies and Pedro Paez, Ex-Minister of Economic Coordination, Ecuador and member of Commission of Experts of the President of the UN General Assembly on Reforms of the International Monetary and Financial System.

During the summit, Fundación Solon, the Institute for Policy Studies(IPS) and the Democracy Center are hosting a strategy meeting to discuss how to advance the global campaign to close the International Center for Settlement of Investment Disputes (ICSID), and challenge unjust investment agreements.

We have recently learned that both President Correa (Ecuador) and President Morales (Bolivia) have confirmed their attendance and participation in a Thursday evening side event focusing on the secretive trade court tribunal, the International Centre for the Settlement of Investment Disputes (ICSID). With the participation of these Heads of State, we are confident that together we can challenge these unjust investor protections. Stay tuned for updates from this week’s summit and information on how you can get involved!

Watch for more information here on our upcoming launch of a new clearing house website to encourage participation and coordination between groups in the Global South and the Global North working to challenge the structure of excessive “investor protections.”