AFTER BRIEF INTERRUPTION, USED CLOTHING IMPORTS CONTINUE

Código Fecha Clasificación Origen
06LAPAZ299 7 February 2006 No clasificado Embassy La Paz

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RR RUEHWEB

DE RUEHLP #0299 0381435
ZNR UUUUU ZZH
R 071435Z FEB 06
FM AMEMBASSY LA PAZ
TO RUEHC/SECSTATE WASHDC 7976
INFO RUEHAC/AMEMBASSY ASUNCION 5582
RUEHBO/AMEMBASSY BOGOTA 2847
RUEHBR/AMEMBASSY BRASILIA 6717
RUEHBU/AMEMBASSY BUENOS AIRES 3931
RUEHCV/AMEMBASSY CARACAS 1291
RUEHPE/AMEMBASSY LIMA 1190
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RUEHMN/AMEMBASSY MONTEVIDEO 3549
RUEHQT/AMEMBASSY QUITO 3929
RUEHSG/AMEMBASSY SANTIAGO 8445
RUCPDOC/DEPT OF COMMERCE WASHINGTON DC
RUEATRS/DEPT OF TREASURY WASHINGTON DC

UNCLAS LA PAZ 000299

SIPDIS

SIPDIS

STATE FOR WHA/AND LPETRONI
COMMERCE FOR JANGLIN, MDYBCZAK, LMARTINICH, AND RSTETSON
TREASURY FOR SGOOCH

E.O. 12958: N/A
TAGS: ETRD, EINV, ECON, BL
SUBJECT: AFTER BRIEF INTERRUPTION, USED CLOTHING IMPORTS
CONTINUE

1. (U) Summary: Used clothing imports were temporarily
interrupted January 31, when the supreme decree authorizing
their entry expired. The issue attracted the attention of
local clothing manufacturers, who claimed cheap imports
undercut their operations and called for a total ban, and of
used clothing sellers, who urged the GOB to extend the
decree. In the end, the GOB decided not to decide,
announcing late February 1 that used clothing imports would
be allowed for another 180 days while the issue could be
studied further. Both sides legitimately argued that
thousands of jobs were at risk, but neither recognized that
Bolivian consumers benefit from the extraordinarily low
prices of imported used clothing. End summary.

2. (U) Used clothing imports were interrupted at midnight
January 31, when the supreme decree authorizing their entry
expired. In the run-up to the deadline, local apparel
manufacturers and used clothing sellers marshaled forces to
influence GOB action, with the former demanding the
prohibition of used clothing imports and the latter urging
the GOB to extend the original decree. According to press
reports, National Confederation of Micro and Small
Enterprises President Ramiro Uchani and Committee against
Used Clothing President Emilio Gutierrez called for a total
ban, arguing that cheap used clothing imports had deprived
local manufacturers and artisans of business and forced many
to close shop, leaving thousands without work. If used
clothing imports continue, they said, many more of Bolivia’s
estimated 4,500 informal apparel workshops may have to shut
their doors, with corresponding hardships for employees.
Calls for an import ban were countered by Amadeo Tapia,
Secretary General of the National Commission for the Defense

SIPDIS
of Used Clothing, who asserted that a total prohibition would
eliminate the livelihood of the 15,000 people directly or
indirectly involved in the used clothing trade. Tapia
threatened protests and blockades if the GOB banned imports.

3. (U) President Morales assured both groups he would
consider their demands, eventually siding with used clothing
sellers and announcing late February 1 that he would issue a
decree allowing the importation of used clothing for another
180 days. In the meantime, he promised to establish a
committee (to include the new ministers of finance, health,
economic development, and production and micro enterprise) to
explore the issue and reach an agreed solution.

4. (U) Comment: Both sides legitimately argued that thousands
of jobs were at risk, but neither they nor GOB officials
expressed any concern for Bolivia’s mostly impoverished
consumers, who benefit from the extraordinarily low prices of
imported used clothing. In El Alto’s 16 de Julio market, for
example, jeans sell for as little as $1.20, shirts for as
little as $1, and children’s clothing for as little as $0.60.
At these prices, small local manufacturers cannot compete,
and many do stand to lose sales to cheaper imports. But
while some may benefit from the prohibition of used clothing
imports, banning legal trade in these goods will do nothing
to solve the problem of contraband, or illegal imports, which
GOB officials estimate accounts for more than 90 percent of
all imported used clothing.

5. (U) Comment continued: For U.S. suppliers of used
clothing, the GOB’s decision to extend the decree is good
news. Bolivian National Institute of Statistics figures
indicate that used clothing shipments originating in the
United States account for 70 to 80 percent of total annual
imports of $2 to $3 million, and many firms look to Bolivia
as a key destination country, particularly since Peru,
Argentina, Ecuador, and Paraguay have banned these imports.
U.S. firms should be cautious, however, when considering
future shipments, as the GOB’s long-term policy is far from
certain. End comment.
GREENLEE