President Evo Morales on Wednesday accused Barack Obama of lying by pledging to change America's historically heavy-handed relationship with Latin America and then halting $25 million in annual trade benefits for Bolivia.
The U.S. on Tuesday said it is ending the import duty waivers because world's No. 3 cocaine-producing country is not doing enough to reduce "unconstrained" cultivation of coca.
Morales said the move contradicts Obama's promise at the Summit of the Americas in April to be a peer rather than an overseer of countries in the region. "President Obama lied to Latin America when he told us in Trinidad and Tobago that there are not senior and junior partners," he told reporters.
The former coca-growers' union leader, who expelled U.S. drug agents from his country last year, said the U.S. trade representative used "pure lies and insults" to justify its decision.
The trade office said there has been "explicit acceptance and encouragement of coca production at the highest levels of the Bolivian government."
Bolivia, which considers coca a sacred crop that has many traditional uses other than cocaine, says the U.S. move will cost the impoverished country about 20,000 jobs, particularly in textiles and leather. The country has had only limited success in developing alternatives to U.S. markets, said the of the Bolivian Foreign Trade Institute, Gary Rodriguez, told The Associated Press that Bolivia has had limited success in trying to compensate for the anticipated loss of U.S. markets and that he expected Tuesday's announcement to lead to layoffs.
"Neither Venezuela, Iran, Argentina or even Brazil have so far worked as alternative markets," he said.
Venezuela had promised to buy $13 million in goods over the past year but the La Paz exporter's association, CAME, said Venezuela lacks the U.S. dollars to pay for them.
The U.S. is extending tariff exemptions for Ecuador for another six months as part of the Andean Trade Preference Act, but Ecuador, Peru and Colombia will see those duty-free privileges expire at year's end. The region's cocaine-producing and transit countries have been allowed to export thousands of products to the United States duty-free since 1991 in hopes that income from legal exports will help wean peasants off selling coca, but that hasn't happened.
The U.S. government estimates Bolivia's potential cocaine yield at 195 metric tons, and Morales himself said Wednesday that coca cultivation is up in Bolivia - by 6 percent last year by U.N. survey. But he said his government is making a good-faith control effort.
U.S. drug agents say landlocked Bolivia exports most of its cocaine to Europe through Brazil and Argentina. The trade office said the DEA previously had 57 employees in four Bolivian cities. Now those agents are spread elsewhere across the region, leaving what U.S. law enforcement officials call a black hole in Bolivia.