VZCZCXYZ0031
RR RUEHWEB

DE RUEHLP #2622/01 2711849
ZNR UUUUU ZZH
R 281849Z SEP 06
FM AMEMBASSY LA PAZ
TO RUEHC/SECSTATE WASHDC 0717
INFO RUEHAC/AMEMBASSY ASUNCION 6133
RUEHBO/AMEMBASSY BOGOTA 3450
RUEHBR/AMEMBASSY BRASILIA 7308
RUEHBU/AMEMBASSY BUENOS AIRES 4570
RUEHCV/AMEMBASSY CARACAS 1827
RUEHPE/AMEMBASSY LIMA 1867
RUEHME/AMEMBASSY MEXICO 1796
RUEHMN/AMEMBASSY MONTEVIDEO 4041
RUEHQT/AMEMBASSY QUITO 4463
RUEHSG/AMEMBASSY SANTIAGO 9037
RUCPDOC/DEPT OF COMMERCE WASHINGTON DC

UNCLAS LA PAZ 002622 
 
SIPDIS 
 
SIPDIS 
 
STATE FOR EB/TPP/ABT TLERSTEN AND WHA/AND LPETRONI 
COMMERCE FOR ITA/OTEXA MDANDREA AND JANGLIN 
STATE PASS TO USTR FOR AHEYLIGER 
 
E.O. 12958: N/A 
TAGS: ETRD ECON KTEX BL
SUBJECT: TEXTILES AND APPAREL: CONTINUED RELIANCE ON ATPDEA 
PREFERENCES 
 
REF: STATE 138090 
 
¶1. (U) Summary: While the expiration of global textile and 
apparel quotas may have adversely affected small Bolivian 
producers, large manufacturers' exports will likely remain 
strong, at least as long as they benefit from Andean Trade 
Promotion and Drug Eradication Act (ATPDEA) preferences.  If 
these disappear, say exporters, Bolivian producers will find 
themselves unable to compete with cheaper products from China 
and other Asian nations.  That said, with greater political 
and economic certainty, flexible labor laws, and access to 
financing, industry representatives believe Bolivian textile 
and apparel manufacturers can compete even in a tough global 
environment.  End summary. 
 
¶2. (U) Anecdotal evidence suggests that the expiration of 
global textile and apparel quotas and related increases in 
relatively inexpensive imports has pushed some Bolivian firms 
out of business, particularly those operating in the informal 
sector and producing primarily for domestic markets.  Many 
small businesses have found their products undercut not only 
by cheaper imports from China and other Asian countries, but 
also by rapidly increasing used clothing imports (allowed 
until April 2007).  For many family-owned enterprises, the 
latter seems to be a greater threat. 
 
¶3. (U) Large manufacturers say their exports will likely 
remain strong, at least as long as they benefit from Andean 
Trade Promotion and Drug Eradication Act (ATPDEA) 
preferences, which provide a 17-22 percent price advantage 
over competitors subject to U.S. textile and apparel tariffs. 
 Bolivia's largest apparel manufacturer, Ametex, exports 
approximately 750,000 units of clothing to U.S. markets every 
month, all of them under ATPDEA trade preferences.  Another 
firm, Mitsuba, exports on a much smaller scale (approximately 
9,000 units of clothing per month) but also relies heavily on 
existing trade benefits.  In the absence of duty-free access 
to U.S. markets, say company representatives, firms would 
find it difficult, if not impossible, to compete. 
 
¶4. (U) According to Ametex President Marcos Iberkleid, the 
potential expiration of ATPDEA trade preferences is of far 
greater concern than the end last year of global textile and 
apparel quotas or increased competition from China and other 
Asian nations.  The firm's export volume is up 19 percent, 
thanks largely to product diversification, new markets, and 
greater flexibility in responding to clients' needs, but the 
firm has lost at least one major U.S. client to uncertainty 
over continued ATPDEA benefits.  Mitsuba executive Henry 
Casana worries that his exports may also be affected - a 
particularly grave concern for a firm that sends 95 percent 
of its products to the United States. 
 
¶5. (U) In a general sense, increased global competition has 
forced some manufacturers to lower prices and improve 
efficiency.  Iberkleid reports that he has consolidated 
manufacturing facilities and streamlined operations, 
dismissing some mid- and senior-level employees and making 
significant operational changes.  In the short-term, ATPDEA 
trade preferences may be sufficient to allow Bolivian textile 
and apparel manufacturers to remain competitive, but 
Iberkleid and others say they prefer a long-term trade 
agreement and accompanying stability.  With this, and with 
greater political and economic certainty, flexible labor 
laws, and access to financing, industry representatives 
believe Bolivian textile and apparel manufacturers can 
compete even in a tough global environment. 
 
¶6. (U) Bolivian textile and apparel exports accounted for 
approximately 2 percent ($51.6 million) of total exports of 
$2.7 billion in 2005; textile and apparel exports to the 
United States totaled an estimated $34 million.  Textile and 
apparel imports accounted for approximately 2 percent ($50.2 
million) of total imports of $2.4 billion in 2005. 
Industrial/manufacturing exports totaled $932 million in 
¶2005.  Textile and apparel employment figures are 
unavailable, but industry executives estimate that between 
 
 
10,000 and 20,000 people are involved in the sector in some 
capacity. 
URS