Since the election of President Evo Morales in December 2005, relations between the United States and Bolivia have steadily deteriorated. Morales has embraced a political model that thrives on conflict, confrontation, and bullying. His policies have raised the specter of large-scale turmoil. Much like Venezuelan President Hugo Chávez, he uses anti-Americanism as a political tool and spins wild conspiracy theories about the United States. In September, Morales expelled the U.S. ambassador to Bolivia, whom he accused of stoking Bolivian separatism. Shortly thereafter, the United States pulled its Peace Corps volunteers from Bolivia, citing the growing political violence. In November, Morales demanded that the U.S. Drug Enforcement Administration (DEA) cease its operations in Bolivia. The DEA completed its exit from Bolivia in late January.
Before leaving office, President George W. Bush responded to Bolivia's lack of cooperation with anti-drug efforts by suspending its privileged trade status under the Andean Trade Preference Act (ATPA) and Andean Trade Promotion and Drug Eradication Act (ATPDEA). Both the ATPA and ATPDEA require that beneficiary countries provide a certain level of assistance to U.S. counternarcotics activities. The Bush administration was justified in suspending Bolivia's trade benefits, although its decision will have a considerable economic impact on the South American country and has been used by Morales for domestic propaganda purposes. Now the Obama administration must decide whether and when to restore those trade benefits.
In 2007, according to the U.S. International Trade Commission, U.S. imports from the ATPA countries represented only 1.1 percent of total U.S. imports, and imports
from Bolivia accounted for just 1.2 percent of imports under the ATPA. Meanwhile, U.S. exports to the ATPA countries represented a mere 1.4 percent of all U.S. exports, and exports to Bolivia accounted for less than 2 percent of exports under the ATPA. But from Bolivia's perspective, "The United States is a main trading partner and one of Bolivia's largest foreign investment sources."
In other words, ATPA trade preferences mean much more to Bolivia than they do to the United States. Before those trade preferences are restored, the Obama administration should insist that the Morales government agree to a minimum amount of anti-drug cooperation. I generally do not favor trade sanctions, but this is a special case. The terms of the ATPA and ATPDEA are quite clear. Bolivia should not be given a free pass. It is the world's third-largest coca producer, and is a key front in the war on drugs.
Under Morales, who is now embroiled in a major corruption scandal, political polarization and ethnic tensions in Bolivia have increased substantially. The country suffers from extremely high levels of poverty and inequality, and is divided sharply along racial and geographic lines. Economic disparities, cultural resentments, and repeated attacks on democracy by the Morales government have turned Bolivia into a bubbling cauldron of instability.
A landlocked country in the heart of South America, Bolivia has long been a fractured society. Indeed, it is really two societies, one consisting of poor indigenous Bolivians, who are concentrated in the western highland departments, the other made up of mixed-race mestizos and whites, who dominate the eastern lowland departments. Eastern Bolivia is the more prosperous region and serves as the country's economic engine, even though most Bolivians live in the west. A majority of the population is indigenous. Morales is the first Indian ever elected president.
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