BOLIVIA: 'The Americas must become a common neighborhood'
Karin Palmquist

Another round of negotiations for a trade agreement between the Andean countries - Columbia, Ecuador, Peru and Bolivia - and the United States is now concluding in Atlanta, Georgia. The Andean Trade Program (ATP) is part of the Andean Trade Program and Drug Eradication Act (ATPDEA) and retroactively renews and builds upon the recently expired Andean Trade Preferences Act (ATPA) to further open U.S. markets to products from the Andean countries.

DiplomaticTraffic.com sat down with Bolivia's ambassador to the United States, Jaime Aparicio, to hear what his country hopes to get out of the trade agreement.

"The president of Bolivia has been very clear with the Bolivian people on what the country needs to solve its pressing social problems," Ambassador Aparicio said. "We need to create growth, sustainable growth. One of the most important engines for growth and job creation is, of course, trade."

About 30 percent of Bolivia's exports to the United States were covered under ATPA, including products such as jewelry and wood. ATP will enable other sectors, most importantly Bolivian textile manufacturers, to reach the American market, that is it will allow quota-limited, duty-free imports of clothing made in Bolivia from regional fabric or other fabric dyed and finished in the United States.

"We have many free trade agreements already," the ambassador said. "We are part of ANDEAN [Andean Community of Nations], and we are also part of MERCOS [Southern Cone Common Market MERCOSUR]. We already have free trade agreements with Mexico and with the European Union. The negotiations started in Columbia one month ago and are continuing now in Atlanta [between United States, Columbia, Ecuador and Peru], with Bolivia as an observer. Soon the negotiations with Bolivia will start officially. Columbia, Ecuador and Peru are already officially negotiating with the United States."

Asked if there is a central effort to negotiate the agreement and when he believes the negotiations will conclude, the ambassador said: "There is a central negotiation, but some things need to be negotiated bilaterally. The bulk of the agreement is negotiated collectively, but then each individual country will have to negotiate some issues with the United States. These negotiations all run parallel. We believe a decision will come at the end of the year, before the elections."

So what are the issues Bolivia will need to negotiate bilaterally with the United States, parallel to the central negotiations?

"The Andean group countries are the most important market for Bolivian agricultural products. We're a big producer of soy and other products. We have to negotiate how this transition will take place. And there are products for which we really want market access.  But Bolivia's products are complimentary to the US market so I don't foresee that to be a problem. We make cotton, cereal, jewelry, green wood - we have one of the largest reserves in the world of green wood. It's all complimentary to the US market," the ambassador said.

Green wood is a term used for wood grown in a way that balances environmental, social and economic concerns to meet the needs of the present without compromising the future. For a forest to be considered 'green,' it needs to meet certain standards in areas such as logging practices, labor conditions and wildlife habitat.

Market accessibility is of course important to Bolivia, but more important is the stability and comfort a trade agreement would give potential investors.

"Investment is the name of the game," the ambassador said. "ATP exports are increasing, but there are no new investments. No one knows what is going to happen, and [subsequently] there are no new investments."

The ambassador anticipates much of the hoped-for investment will come in the area of gas. Bolivia has the second largest reserve of gas in Latin America, after Venezuela. But here there is another obstacle. Indigenous groups have opposed government plans to export Bolivian natural gas. Bolivian president Carlos Mesa won a crucial political endorsement for a July referendum aimed at deciding the future of the country's oil and gas industry. 

"According to the polls a large majority supports the export of gas. A small, but vocal, minority is opposing. People are likening it to the export of silver," the ambassador said and told us the story of the town of Potosí, at the heart of a sixteenth century silver rush.

In 1544, a man called Diego Huallpa found silver ore in Cerro Rico (Rich Hill) and the town of Potosí was founded at the foot of the hill. At its height the town had a population of 200,000, more than New York at the time. But the silver never benefited the town, or the country for that matter. Instead it was shipped en mass to Spain.

"Today Potosí is one of the poorest towns in Bolivia," the ambassador said. People are afraid the same thing will happen with the gas."

"Gas is going to benefit the people," the ambassador continued. "Bolivia has large reserves. A very small percentage of our reserves is enough to sustain us for the next hundred years. Bolivia is a small country. There are only eight million people in Bolivia."

To turn the popular opinion, the ambassador said, the government needs to show the "people how gas exports are going to benefit the country in a tangible way. People need to know where [revenues are] going to go - to improve the health system, the water system, the infrastructure. We need to learn from countries like Norway and Canada. They set up trust funds to administer the revenues."

Finding investors, and finding markets, will not be a problem.

"There are several investments pending the referendum. In the early 90s, between 1989 and 1994, Bolivia saw investments of $2.5 billion in its hydrocarbons industry. It enabled production to go from 3 trillion to 54 trillion cubic feet. We believe in a similar interest in the gas sector. If we have the markets we will have the investments," the ambassador said.

"California and Mexico have shown interest in Bolivian gas. California signed an agreement with Indonesia, so they will buy their gas from there, but Mexico has an increased demand for natural gas," the ambassador continued. "State petrol companies in Bolivia and Mexico are holding talks. The United States is trying to diversify its energy supply. It we go to Mexico then the gas line is already there. Bolivia is already selling to Brazil, but how that develops and any expansion depends on the economic situation in Latin America."

Reading media reports on Bolivia, one could be forgiven for thinking it is a country on the brink of a breakdown. Last year a bloody Indian uprising ousted President Gonzalo Sanchez de Lozada. Now Indian leaders say the new president, Carlos Mesa, has failed to live up to promises to help the poor, indigenous majority. The country has seen an escalation of violence, exemplified by the gruesome burning in mid-June of a mayor accused of corruption. But the picture of a country in disarray is far from the truth, the ambassador says.

"The president has approval ratings of 80 percent. In the high plateaus of Bolivia, where the largest concentration of indigenous people is, there are problems that need to be solved. Over the 20 years of democracy there have been many social reforms. Problem is there have been too many reforms at the same time. Decentralization has meant that local communities now hold the resources. This is new for them. There are three hundred municipalities and they decide for themselves. All these reforms came at the same moment.

"The reforms are one side. On the other side you have the worst economic crisis in history. With the economic crisis in Brazil and Argentina we saw huge markets disappear overnight. Of course that is going to have an effect. Then there was the eradication of cocoa leaves that we had. That was a miscomprehension of reality. It's wrong not to compensate people when the crop was eradicated. You must provide an alternative crop, a job, or compensation. On one hand you have this economic crisis, and on the other this political empowering - you simply can't satisfy all demands.

"We had big problems of upheavals. Thirty percent of our congress was new actors. There were all these new actors, but they had nothing to offer. There was a social explosion and the president resigned. The new president has to offer solutions to some very complicated problems."

On the international front, generally good relations with neighbors have been somewhat overshadowed by Bolivia's continued unhappiness over losing to Chile, in 1879, a sliver of land that gave access to the Pacific Ocean. "It's an obsession. For a relatively small population to lose part of its territory is terrible, but even worse is to lose its access to the sea. It's difficult to feel trapped. There is a dialogue, through the United Nation last year, and now through the OAS," the ambassador said.

Increased trade can only help social cohesion and international relations. Closing the interview with a few words on Bolivia's relations with the United States, the ambassador said:

"The United States has always been supportive of us politically and financially. At the summit in Monterrey, Mexico, President Bush was very supportive of Bolivia. [These days everybody has to] have a good neighbor. Problems can arise anywhere. Trade is the only way; cooperation will reduce [insecurity]. Only through trade, through lower tariffs, are poor people going to benefit. It's very important that the United States understands that the Americas must become a common neighborhood."