The news was greeted with great joy by some quarters, and has been hailed by some financial commentators as evidence of popular support for free trade.

The export industries involved said that a free trade treaty urgently needed to be signed to replace the Andean Trade Preferences and Drug Enforcement Act (ATPDEA) which runs out in December 2006. Bolivia is currently only an observer in negotiations that are expected to conclude before the end of this year.

Free trade or jobs

However a closer look at most of the comments of different marchers shows that the real desire was to secure jobs. As Rodolfo Ramos, a worker for Ametex stated, "The aim of this march is to defend our work and create more jobs. Neither the Government, nor the political parties do anything to negotiate external markets."

The question of whether a Tratado de Libre Comercio (TLC in Spanish; Andean Free Trade Agreement or AFTA in English) with the US is the best way of securing jobs, and whether its benefits outweigh its costs were largely ignored by the mainstream press.

TLC: more harm than good

Pablo Solón, from the Bolivian Movement Against TLC and ALCA expressed support for jobs and expanding Bolivia's export markets, but said that it was misdirected to to call for a TLC which overall would cause great damage to Bolivia.

He urged textile workers in Bolivia to put their weight behind expanding the US's General System of Preferences. This is a list of products that the US currently allows in duty-free from less-developed countries. Unlike the proposed TLC, GSP does not require the country involved to make its own trade or political and economic concessions in return.

Trade preferential agreements: a comparison

According to official figures, 46% of Bolivia's total exports (worth $118 million) in 2004 came under ATPDEA.  The exporters that principally benefit from ATPDEA are those that produce manufactured goods ($62 million), clothes and accessories ($34.9 million), vegetable oil ($6.3 million). Under ATPDEA, the country can export up to 6,000 products free of tariffs but Bolivia has only used about 15% of the list. Ten products represent 90% of the total list of products sold to the US.

The rest of Bolivia's annual exports are made up of $16.6 million dollars of goods sold under GSP and $122.5 million dollars sold without any preferential trade treatment including manufactured goods.

Most exports not dependent on ATPDEA

These figures show that Bolivia's exports are largely not dependent on ATPDEA preferences. The principal industry that would lose without a preferential trade treaty to replace it would be clothes and textile industry because other manufactured goods could be exported under SGP. This is obviously why the march was organised by textile and clothing firms, Universaltex, Matex and Batt, all subsidiaries of the principal exporter of clothes to the US

However, as Pablo Solón pointed out, if the Government's aim is to secure jobs in this export sector (which at most employs 5,000 people), it would make more sense for it to negotiate the expansion of SGP.

Exporting to the US isn't the answer to solving poverty

Moreover, campaigners pointed out that a focus on creating jobs should not just look to the US. In total, the US market only represents 14% of Bolivia's total international trade. Free trade with the US over the last ten years hasn't led to either a diversification or industrialisation of Bolivia's export base. The products that Bolivia manages to export to the US continue to be largely primary resources with hydrocarbons and minerals representing 45% of all exports. To ensure long-term sustainable jobs, Bolivia needs to look to exporting more industrialised products to a wider range of countries as well as building up its internal market.

Real costs of TLC

However, the real danger with the TLC with the US are the costs that it would have for Bolivia - in particular in areas of agriculture, provision of basic services, patenting of indigenous knowledge, and loss of sovereignty. 

In terms of agriculture, the US position in current negotiations has included demands to open up markets of maize, rice, sugar and milk to US exports which will remain subsidised. A flood of cheap imports will inevitably undercut and impoverish local Andean campesinos.

There are also serious threats to Bolivia's sovereignty from a free trade treaty with the US. The US NGO, Public Citizen recently warned representatives negotiating TLC that it would extend investors' rights further than had been agreed in the North American Free trade Treaty (NAFTA). This would hold a serious threat to the sovereignty and self-determination of each State.

"The representatives of the Andean countries who are negotiating AFTA need to realise that there are serious and growing dangers in these treaties for democratic government and national sovereignty. Local and state policies, even legal court decisions, are threatened by the offers to extend protections to investors", warned David Edeli, an analyst for Public Citizen.

The undermining of Bolivian sovereignty is not an unplanned consequence of free trade agreements with the US. Free trade is closely aligned with the political and strategic objectives of the US, in particularly their commitment to expand US hegemony in Latin America. These objectives are made clear by the US Trade Act of 2002: "The national security of the United States depends on its economic security...Trade will create new opportunities for the United States and preserve the unparalleled strength of the United States in economic, political, and military affairs. The United States, secured by expanding trade and economic opportunities, will meet the challenges of the twenty-first century."

After the US failed to secure the Free Trade Agreement of the Americas (which would have established a free trade area from Alaska to Tierra del Fuego), they have shifted their focus to building up a gradual chain of regional free trade agreements. CAFTA was narrowly passed with the Central American States in July; the US has signed free trade agreements with Chile; the Andean Free Trade Treaty is the next stop. FTAA is being delivered by stealth and only popular resistance can stop it.

See also: Ten reasons to oppose TLC