1. Negotiations
2. US-Andean countries

Bolivian Government guidelines for a fair trade and cooperation treaty with the US

12 September 2006

GUIDELINES FOR A FAIR TRADE AND
COOPERATION FOR PRODUCTIVE DEVELOPMENT AGREEMENT
BETWEEN THE UNITED STATES AND BOLIVIA

1. The principles we propose for this Fair Trade and Cooperation for Productive Development Agreement are based on postulates shared by both countries:

• a. Respect for the sovereignty of the parts, which implies recognizing that democracy is when free people make the choices that are best for them, their families and their countries;

• b. Strengthening of democratic processes and social inclusion to guarantee the universal freedoms that are the foundation of all genuine democracies;

• c. Economic exchange to ensure poverty reduction and the improved livelihoods of people in all nations involved that overcomes the deep asymmetries between the countries;

• d. Ensuring a healthy environment for our families’ futures and the social development that promotes peace and security within and among nations.

2. The principle objective of this Agreement is to enhance the wellbeing of our countries’ citizens and the environmental and social infrastructure on which they rely.

3. The linking and complementarity of trade rules and mechanisms for cooperation for productive development is fundamental to counteract in some measure the enormous asymmetry that exists between our countries - the GNP of the US is 1,200 time larger than the GNP of Bolivia - and to ensure that both countries benefit from the Agreement. In this framework, it will be necessary to establish a funding mechanism for concessional credits and/or grants to strengthen Bolivia’s productive base and market systems so that Bolivian producers could be able to take practical advantage of new U.S. market access the Agreement would provide.

4. For the Agreement to meet the principles and objectives mentioned it is necessary to underscore certain elements of Bolivian reality to be taken into consideration:

• a. The history of Bolivia is the history of an impoverished country that for centuries has been an exporter of raw materials (silver, rubber, tin, gas). The Fair Trade and Cooperation for Productive Development Agreement must promote the diversification and industrialization of Bolivia’s rich natural resources so as to promote Bolivian value-added exports. As the history over the past decades of all successful developing countries has demonstrated, this is an indispensable prerequisite for achieving sustainable economic development and real poverty reduction.

• b. The norms for the promotion and protection of foreign investment should not only guarantee recovering investments and a reasonable profit, but also preserve the property right of the Bolivian state over its natural resources and secure effective revenues for the country to allow for the promotion of development of the productive base and to guarantee essential services such as education and healthcare that are the basis for development and security.

• c. Bolivia is a county with an indigenous majority that practices community and family farming that cannot be subjected to the rules of free trade, ignoring their condition as millenarian peoples and cultures. In this framework, the Agreement must promote the ecological and indigenous farming that - while it may not be competitive internationally - is valued and supported for its contribution to the protection of the environment, healthy food systems and cultural diversity.

• d. Bolivia is in a process of recovering the regulatory capacity of the state in the public, private and social spheres that promotes stability and sustainable growth. In this context, a Fair Trade and Cooperation for Productive Development Agreement must respect and contribute to the process of strengthening the capacity to ensure efficient and balanced regulation of economic, social, cultural and environmental activities.

• e. To compensate for the profound existing asymmetries it is necessary to design trade rules based on special and differential treatment that take into consideration Bolivia’s economic reality. These rules should include:

• • • Coverage and a calendar that is more flexible and favorable for Bolivia;
  • • The continuation of non-reciprocal trade opening that have contributed to trade between Bolivia and the US;
  • • Flexibility for Bolivia in relation to various norms in the areas of investment, services, intellectual property and government purchases that are decisive for poverty reduction.

5. In the same manner that the United States insists that there are matters that are not subject to negotiation in a bilateral agreement, or that require special treatment, such as agriculture subsidies, national security, and others, Bolivia will assert in its trade negotiations its sovereign rights to:

• a. Guarantee access to affordable generic medicines and access to medical treatments, entailing exclusion from agreements patent-related rights that undermine Bolivia’s ability to implement fully the 2001 Doha agreements, and preserving at a minimum the flexibilities contained in the Trade Related Aspects of Intellectual Property Rights (TRIPS) and implementing the Doha Declaration on Public Health and TRIPS.

• b. Protect from theft, expropriation or monopolization Bolivia’s wealth of traditional knowledge and rich biodiversity, through measures such as the exclusion from patentability plants, animals and living materials;

• c. Maintain and broaden mechanisms for building domestic markets and national production capacity, such as the Compro Boliviano;

• d. Promote foreign investment that guarantees transparency and appropriate technology transfer; utilization of local raw materials and inputs; hiring of national labor and respect for domestic environmental and labor policy;

• e. Guarantee transparent, accessible, efficient and effective mechanisms for resolving investment disputes in the framework of the jurisdictions established by the Bolivian Constitution and national laws and, as was agreed in the U.S.-Australia FTA, restrict application of the investor-state mechanisms;

• f. Ensure universal access by Bolivian’s to essential services, including strengthening the regulatory capacity and provision of essential services by the public sector.

• g. Protect cultural goods and services in the framework of the UNESCO “Convention on the Protection and Promotion of the Diversity of Cultural Expressions” of October 2005.

6. This Fair Trade and Cooperation for Productive Development Agreement must take into consideration the timing and democratic processes internal to each of the parts, including the U.S. electoral process and congressional trade agreement consideration mechanisms and the Bolivian Constituent Assembly process, now underway, that will reform our political system to secure democratic inclusion of all sectors in Bolivia. In this context it is necessary to set sufficiently flexible and open negotiating frameworks in accordance the aforementioned processes and internal democratic mechanisms.

7. Respect for the above principles demonstrates why an Agreement of this nature cannot be achieved through a process that is based on signing onto an FTA signed by neighboring countries. Thus, both countries must be sufficiently open and creative to find a format for the Agreement and a process of negotiation that satisfies the realities and necessities of the Parties.

8. To achieve a frank, open, constructive, immediate and serious negotiation, without any pressures, Bolivia proposes initiating, as soon as possible, discussions at the highest level to implement a creative process towards Fair Trade and Cooperation for Productive Development Agreement.