VZCZCXRO3666
PP RUEHLMC
DE RUEHLP #0734/01 0761949
ZNY CCCCC ZZH
P 171949Z MAR 06
FM AMEMBASSY LA PAZ
TO RUEHC/SECSTATE WASHDC PRIORITY 8469
INFO RUEHAC/AMEMBASSY ASUNCION 5694
RUEHBO/AMEMBASSY BOGOTA 2961
RUEHBR/AMEMBASSY BRASILIA 6843
RUEHBU/AMEMBASSY BUENOS AIRES 4073
RUEHCV/AMEMBASSY CARACAS 1394
RUEHPE/AMEMBASSY LIMA 1312
RUEHMN/AMEMBASSY MONTEVIDEO 3644
RUEHQT/AMEMBASSY QUITO 4036
RUEHSG/AMEMBASSY SANTIAGO 8555
RUEHLMC/MILLENNIUM CHALLENGE CORP
RUEATRS/DEPT OF TREASURY WASHINGTON DC
RHEHNSC/NSC WASHINGTON DC

C O N F I D E N T I A L SECTION 01 OF 03 LA PAZ 000734 
 
SIPDIS 
 
SIPDIS 
 
STATE FOR WHA A/S T.SHANNON AND PDAS C.SHAPIRO 
STATE ALSO FOR WHA/AND P.FRENCH AND L.PETRONI 
NSC FOR D.FISK 
 
E.O. 12958: DECL: 03/16/2016 
TAGS: PGOV PREL ECON ETRD PINR SNAR BL
SUBJECT: MORALES SEARCHING FOR WAY FORWARD ON TRADE 
 
Classified By: AMBASSADOR DAVID N. GREENLEE, FOR REASONS 1.4(b) and (d) 
. 
 
¶1.  (C) Summary:  Over lunch March 16 President Morales and 
Vice President Garcia Linera told the Ambassador that the GOB 
was distressed about the loss of the Colombian soy market for 
Bolivian producers and they wished to press this concern in 
Washington.  The Ambassador explained that the Colombia-U.S. 
FTA was closed but that a visit to Washington to discuss GOB 
interests and a broader agenda would be welcomed.  Morales 
explained that his rejection of an FTA and proposal for a 
"People's Trade Agreement" was an effort to open a fresh 
dialogue on trade issues with Bolivia's social sectors.  The 
atmosphere of the meeting was constructive and Embassy 
believes that a Garcia Linera-led visit to Washington, with 
or without the Colombians, could be productive.  End Summary. 
 
 
-------------------------------- 
PRESERVING BOLIVIA'S SOY MARKETS 
-------------------------------- 
 
¶2.  (U) The Ambassador hosted President Evo Morales and Vice 
President Alvaro Garcia Linera for a 90-minute lunch at the 
Ambassador's residence March 16.  The DCM and ECOPOL chief 
also attended.  Before entering the residence, the Ambassador 
and Morales told a large press contingent that the meeting 
was a follow-up to previous exchanges and in the spirit of 
deepending our dialogue. 
 
¶3.  (C) Morales opened by inviting Vice President Garcia 
Linera to provide a readout on the March 14 visit to Bolivia 
by Colombian President Alvaro Uribe.  Garcia Linera focused 
on Bolivia's interest in maintaining the integrity of the 
Andean Community (CAN) and honoring existing commitments.  He 
understood that market access for certain soy oils would be 
preserved for five to ten years, but expressed concern that 
Colombian businessmen could quickly establish their own soy 
processing facilities, thus supplanting Bolivian supply. 
Morales noted with a certain amount of frustration that Uribe 
only came to Bolivia to confirm that the Colombia-U.S. FTA 
was closed and would not be re-opened, but did appreciate 
Uribe's offer to provide special credits to Colombian 
importers to buy Bolivian soy.  Garcia Linera said the GOB 
did not have high expectations prior to the Uribe visit, and 
that critical media coverage paled in the context of 
"President Morales' enormous success during his trip to 
Chile."  Both Garcia Linera and Morales linked conservation 
of Bolivia's soy markets in Colombia to the preservation of 
Bolivian democracy.  The GOB, they said, remained insistent 
on sending a delegation to Washington, led by the Vice 
President, to make a direct appeal and "demonstrate that we 
are doing everything we can to protect our markets." 
 
¶4.  (C) The Ambassador confirmed that there was no room for 
re-opening negotiations on soy and that the Colombian-U.S. 
FTA was closed.  The U.S. Congress and the U.S. private 
sector had already been notified of the terms of the 
agreement and backtracking on these commitments was not an 
option.  The Ambassador reminded Morales that CAFTA passed 
the U.S. Congress by a very narrow margin and that providing 
expanded trade opportunities for domestic agricultural 
interests was important.  The Ambassador welcomed the 
proposal for a visit by GOB officials to Washington, while 
cautioning that expectations should be carefully managed and 
coordination with USG officials was essential to assure 
productive results. 
 
¶5.  (C) After explaining that the Colombia-U.S. FTA would 
likely take at least a year before entering into force 
(information which seemed new both to the President and Vice 
President), the Ambassador noted that the potential loss of 
jobs in the soy sector would certainly occur during Morales' 
administration, and that failure to engage on the trade issue 
would likely result in an additional sizable loss of Bolivian 
jobs.  (Note: Morales nodded decisively on this point.  End 
Note.)  The Ambassador directed the conversation to Morales' 
 
LA PAZ 00000734  002 OF 003 
 
 
statement the day before that he would never sign an FTA with 
the U.S., but that he was interested in pursuing a "People's 
Trade Agreement."  Morales explained that he  was most 
concerned about protecting Bolivia's small producers and 
micro-entrepreneurs who could be overwhelmed by free trade. 
In proposing a "People's Trade Agreement" Morales said he 
wanted to be able to discuss such commercial issues in a new 
way.  With evident pride, Morales added, "Did you notice how 
none of the social sectors reacted negatively to my idea?" 
 
¶6.  (C) Morales noted the problem of cheap Argentine rice 
being smuggled over the border and disrupting Bolivia's 
domestic rice market.  He recounted in this context his 
personal experience years ago of selling rice by the bag in 
the Chapare and that he had opted for coca because of such 
unfair competition.  When the Ambassador asked if Morales 
objected to the word "free" with respect to an FTA, Morales 
nodded enthusiastically, commenting that if trade is free, 
then the small guy is overwhelmed.  "Trade should be just and 
fair."  When the Ambassador responded that U.S. was not wed 
to the word "free" in its commercial agreements, Morales 
seemed both relieved and encouraged. 
 
---- 
COCA 
---- 
 
¶7.  (C) The Ambassador told Morales that we were increasingly 
concerned about the slow pace of coca eradication and that 
the current rate of only 15 hectares a day was not 
sufficient.  Morales said that he was working with the coca 
leaders to improve performance in voluntary eradication. 
Both agreed that cooperation on interdiction issues was 
positive.  The Ambassador advised Morales of a possible visit 
to Bolivia by INL A/S Anne Patterson in late-April and that 
it would be important to be able to show concrete progress by 
that time. 
 
------------------------ 
SECURITY ISSUES AND IRAN 
------------------------ 
 
¶8.  (C)  The Ambassador expressed concern about the declining 
level of cooperation on anti-terrorism issues and regretted 
statements by GOB ministers (specifically, Minister of the 
Presidency Juan Ramon de la Quintana), that such cooperation 
was tantamount to blackmail.  He also noted reports from 
various ministry contacts that they should avoid 
relationships with U.S. Embassy officials -- "yet we see the 
infiltration of Cubans and Venezuelans, your friends, 
throughout the Bolivian Government."  He warned Morales to be 
wary of the "friends of these friends, notably Iran." Morales 
replied that Bolivia was doing nothing with Iran.  He 
commented that there had been the possibility of his visiting 
Iran as President-elect, but for a variety of reasons he did 
not do so.  He added that there was some discussion about the 
Iranian President possibly travelling through the area, but 
the trip was never confirmed.  The Ambassador again urged him 
to be careful about being perceived to be on the other side 
of the anit-terrorism divide. 
 
----------------------------- 
PREPARING TO VISIT WASHINGTON 
----------------------------- 
 
¶9.  (C)  The Ambassador and Morales agreed that Garcia Linera 
should work directly with the Embassy to prepare a Washington 
visit which would involve meetings with senior level 
officials at the State Department and USTR.  Morales said he 
would shortly name someone to head the GOB's MCC efforts.  In 
preparation for the delegation's visit, Morales accepted our 
suggestion of a series of Digital Video Conferences with the 
MCC and USTR to improve Bolivian understanding of how these 
entities work.  Garcia Linera showed particular interest in 
the mechanisms in trade agreements to protect small 
producers.  As if suddenly enlightened, he said, "Then we can 
negotiate about these sensitive issues and address them 
 
LA PAZ 00000734  003 OF 003 
 
 
effectively." 
 
¶10.  (C) The Embassy will work with relevant Washington 
agencies to prepare for the visit, likely next month, of the 
Bolivian Vice President and Foreign Minister.  Garcia Linera 
said that he would be responsible for coordinating with his 
Colombian counterpart. 
 
------------ 
ATMOSPHERICS 
------------ 
 
¶11.  (U)  Morales and Garcia Linera were noticeably more 
relaxed this round, either because of the informal lunch 
setting or perhaps their increasing familiarity with the 
Ambassador and Embassy officials.  Morales, for the first 
time, took notes in our presence.  Viewed from across the 
table, these consisted of words or phrases, such as "IRAN" 
(all in caps) or "CAFTA, January 2004" (end date of 
negotiations).  Morales showed great interest in certain 
topics, such as jobs, but grew less interested when the Vice 
President asked more detailed questions about trade.  Morales 
would engage intensely for a moment and then seem to tune 
out, several times fidgeting with an artificial fruit 
centerpiece on the table.  The rapport between Morales and 
Garcia Linera seemed better than in earlier meetings. 
 
------- 
COMMENT 
------- 
 
¶12.  (C)  The Embassy strongly supports the proposal of a 
Garcia Linera-led visit to Washington, as it is clear that 
the Bolivians need considerable education on the workings of 
the U.S. Government.  For example, Morales said publicly that 
he wants to negotiate the soy issue directly with the 
Secretary of State, apparently unaware of the role of USTR in 
 
SIPDIS 
the trade area.  Morales struck us again as a political 
pragmatist, almost desperately looking for a way out of his 
current impasse on soy and trade issues generally. 
 
¶13.  (C)  Later in the day, Morales publicly spun the 
luncheon meeting for political advantage.  He said he had 
obtained from the Ambassador a full year's grace for 
soy-grain access to the Colombian market (i.e., the likely 
time of ratification) and that the Ambassador was "beginning 
to understand" the "People's" trade-agreement concept. 
GREENLEE