THE DECISION by the Bush administration to suspend trade preferences that benefit Bolivia has left workers here worried about the potential for widespread layoffs at a time when the nation is struggling to cope with the international financial crisis.
US officials said 20,000 to 30,000 Bolivians might lose their jobs as a result of the suspension of preferences, which are important for such exports as textiles and jewellery. "This decision is discriminatory and political," said Emilio Pinto Marin, vice-minister of the budget department. "It's going to affect our productivity."
US president George Bush said last Thursday that he signed the law suspending Bolivia's trade privileges because the country had "failed to co-operate with the United States on important efforts to fight drug trafficking".
But many officials here see it as the latest step in an escalating feud between the two countries.
In recent months, co-operation between US and Bolivian anti-drug authorities has deteriorated.
In September, Bolivian president Evo Morales expelled US ambassador Philip Goldberg over accusations that Mr Goldberg was conspiring with Bolivia's political opposition. Mr Goldberg denied the charges, and the US responded by dismissing Bolivia's ambassador to Washington.
This is the first time Bolivia has been excluded from the Andean Trade Preference Act, enacted in 1991, which affords some South American countries lower tariffs on certain exports to the US.
By the end of September, Bolivia had exported $385 million (€289 million) worth of products this year to the US, its fourth-largest export market after Brazil, South Korea and Argentina. Bolivian officials estimated about $70 million worth of exports could be affected by the US decision.
The decision to suspend trade preferences was driven by several developments that indicated Bolivia was not effectively combating the drug trade, according to Christopher McMullen, a US deputy assistant secretary of state who specialises in South America.
At Bolivia's urging, the US government this year removed workers from the US Agency for International Development and the Drug Enforcement Administration from coca-producing regions of the country, and Bolivian officials have co-operated less with the narcotics affairs section of the US embassy in La Paz.
The amount of coca grown in the country increased by about 5 per cent in 2007 over the previous year, according to UN statistics, although that was far below the 27 per cent jump in Colombia.
"It was regrettable that we had to suspend Bolivia," Mr McMullen said. "This is going to be a major blow, I think, for Bolivia in terms of losing these jobs."
Mr McMullen added that the US wanted to remain engaged with Bolivia and was willing to re-evaluate its position if it sees more co-operation, illegal-coca eradication and drug interdiction.
"Hopefully, by next June, they will be co-operating enough on combating drugs," he said.
Bolivian officials defend their coca policy, which allows farmers in certain areas to legally grow a third of an acre of the crop for traditional uses such as chewing the leaves and brewing teas.
The days when farmers engaged in bloody struggles against US-backed eradication teams are over, as coca has lost its stigma. Under Mr Morales, cocaine seizures have risen each year; almost 20 tons has been confiscated this year, according to government statistics.- ( LA Times-Washington Post service)