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Morales not opposed to US trade deal

Associated Press, January 20, 2006

Morales not opposed to US trade deal


LA PAZ, Bolivia (AP) - Backing away from his tough campaign talk against U.S.-sponsored trade initiatives, Bolivian President-elect Evo Morales said Friday he no longer rules out a free-trade deal with the United States and three other Andean nations. But he did not say he supported such a deal, either.

The leftist coca grower who will be inaugurated Sunday said in an interview with The Associated Press that he is now open to the idea of a joining a pact he strongly opposed as recently as last November.

"I understand that governing is doing good business for your people," he said, speaking in a barely furnished room hastily set up for interviews in Morales’ small apartment in a blue collar neighborhood.

Morales said Bolivia could consider negotiating to be included in the proposed bloc, which would slash trade barriers between Colombia, Ecuador and Peru and the United States.

But Morales said Bolivia could be better served by joining the Mercosur trade bloc made up of Argentina, Brazil, Paraguay and Uruguay or by seeking stronger trade ties with the European Union.

"All these are areas that could resolve social problems" in Bolivia, one of South America’s poorest countries, said Morales, who wore the trademark Bolivian sweater, or chompa, he made famous on a recent tour of Europe and Asia.

Morales, who has often criticized the United States and who once promised to be "Washington’s nightmare," said recent talks with U.S. Ambassador David Greenlee focused on improving relations between the two countries and maintaining the war on drugs.

"He told us it’s time to flip the page to have good relations," Morales said.

The U.S.-led war on drugs inadvertently helped bring Morales to power. The battle against coca eradication that he led helped mobilize Indian organizations already angered by poverty and political domination by a rich elite, feeding a broader political movement.

The comments seemed to be evidence that Morales, an admirer of Fidel Castro and his communist regime, is softening his stance against the free-market policies he denounced during his campaign.

But analysts say it could take months to determine how Morales will govern.

In Washington, State Department spokesman Sean McCormack expressed hope that cooperation on fighting narcotics trafficking and other issues will continue.

Based on what direction Morales takes, "we’ll make an assessment of what kind of relationship the United States and Bolivia will have," he said.

Earlier Friday, Morales’ economic adviser Carlos Villegas said the new administration is ready to negotiate with foreign oil companies over the future of Bolivia’s vast natural gas reserves.

Villegas told a news conference the new administration will also try to boost economic growth — which has averaged 3.5 percent annually for two decades in Bolivia — in a bid to create jobs in one of the region’s poorest countries.

"We’re going to put in place policies for a real recovery," Villegas said.

Bolivia has the second-largest natural gas reserves on the continent after Venezuela, and foreign companies have been responsible for production since the industry was privatized in the 1990s.

Morales vowed to nationalize the gas during his campaign, but Villegas said the new government will respect property rights of international petroleum companies.

Villegas also said two of the biggest oil players in Bolivia — the Spanish-Argentine Repsol YPF S.A. and France’s Total S.A. — have indicated a willingness to re-negotiate their contracts to extract and ship gas. Morales wants them to pay more for the privilege.

Morales’ administration will form committees to negotiate with the petroleum companies, Villegas said. Brazil’s Petroleo Brasileiro S.A. has already said it will accept lower profits to keep operating in Bolivia.

Foreign companies have invested US$3.5 billion (€2.9 billion) in Bolivian gas production since the mid-1990s, but new investment has been largely frozen since last year because of political uncertainty.

Most of Bolivia’s natural gas is shipped through pipelines to Argentina and Brazil. Villegas said the new administration wants to add Europe and Asia as export destinations.

In the interview, Morales said he is willing to study the possibility of joining a proposed US$20 billion pipeline that would link the country to Argentina, Brazil, Paraguay and Uruguay. The pipeline was proposed by Venezuelan leader Hugo Chavez as a way to solve South American energy needs and wean it from U.S. economic influence.

 source: AP