WORLD TRADE
ORGANIZATIONWT/TPR/M/57
15 September 1999
(99-3827)
Trade Policy Review Body
19 and 21 July 1999
TRADE POLICY REVIEW
BOLIVIA
Minutes of Meeting
Chairperson:  H.E. Mr. Jean-Marie Noirfalisse (Belgium)
Page
I. INTRODUCTORY REMARKS BY THE CHAIRPERSON 3
II. OPENING STATEMENT BY THE REPRESENTATIVE OF BOLIVIA 4III. STATEMENT BY THE FIRST DISCUSSANT 7IV. STATEMENT BY THE SECOND DISCUSSANT 9V. STATEMENTS BY MEMBERS OF THE TRADE POLICY REVIEW BODY 11VI. REPLIES BY THE REPRESENTATIVE OF BOLIVIA AND
ADDITIONAL COMMENTS 15
VII. CONCLUDING REMARKS BY THE CHAIRPERSON 21ANNEX I GENERAL REPLIES BY THE DELEGATION OF BOLIVIA 23ANNEX II RESPONSES BY BOLIVIA TO SPECIFIC QUESTIONS 35WT/TPR/M/57
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I. INTRODUCTORY REMARKS BY THE CHAIRPERSON
1. The second Trade Policy Review of Bolivia was held on 19 and 21 July 1999.
2. The Chairperson welcomed Vice-Minister Ana María Solares, head of the delegation of
Bolivia, Vice-Minister Adhemar Guzmán, and Ambassador Silvia Avila Seifert, as well as the rest of
the delegation from La Paz and from the Mission in Geneva.
3. The Chairperson recalled the purpose of the TPR Mechanism and the main elements of the
procedures for the meeting.  The report by the Government of Bolivia was contained in document
WT/TPR/G/57 and that of the WTO Secretariat in document WT/TPR/S/57.
4. The Chairperson welcomed the two discussants, H.E. Mr. Jorge Voto-Bernales (Peru) and
Mr. Thórdur I. Gudmundsson (Iceland), and emphasized that, as usual, both discussants would be
speaking in their personal capacities and not as repr esentatives of their governments.  In accordance
with the established procedures, the discussants had made available, in advance, outlines of the mainissues they intend to raise.  These were contained in document WT/TPR/D/37.
5. As of the start of the meeting, the delegations of  Hong Kong, China;  Japan;  the EU;  and the
United States, had raised, in writing, points they wished to address during the meeting.  These points
had been transmitted to the delegation of Bolivia.  General replies presented during the meeting are
contained in Annex I, responses to specific questions are contained in Annex II.WT/TPR/M/57
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II. OPENING STATEMENT BY THE REPRESENTATIVE OF BOLIVIA
6. Bolivia's statement was made by Vice-Minister Ana María Solares, head of delegation,
Vice-Minister Adhemar Guzmán and Mr. Bernardo Requena.
7. The representative of Bolivia was convinced of the importance of the TPRM as a vehicle to
generate and foster transparency in the application of trade policies and multilateral commitments.
Bolivia reaffirmed its commitment to a transparent,  predictable, and equitable multilateral trading
system by its participation in the mechanism.
8. Since the previous Review in 1993, the economic model of Bolivia had basically not changed,
it had been strengthened and was being perfected.  The representative noted, as a main achievement,
the economic stability reached through a solid and rigorous implementation of macroeconomic
policies.  Economic stability was a necessary prerequisite for the promotion of growth and economic
development.
9. Among the structural reforms, the representative highlighted several political, economic and
institutional changes:  the consolidation and improvement of the political system, which was being
transformed from a representative to a more participative one;  the consolidation and deepening of
economic liberalization;  and the modernization of the State which was abandoning its productive
activities and concentrating on its normative and service provider functions.
10. The high responsibility with which the Bolivian authorities had conducted their economic
policies was also reflected, inter alia , in the control of inflation, the reduction of fiscal deficit, the
increase of international reserves, and the expansion of foreign direct investment.
11. However, such results were far from meeting the growing requirements of the Bolivian
people;  the increase of 2.5% in income had not been sufficient to alleviate poverty, which affected70% of the population.
12. The Bolivian Government had set up a plan for economic and social development, based on
the four pillars of opportunity, equity, dignity, and institutionalization, which would be referred to in
more detail later.
13. With regard to Bolivia's foreign relations, great importance was given to regional integration
processes, which were seen as an efficient means of strengthening Bolivian trade liberalization
policies and promoting economic development.  Bolivia was convinced that such processes should not
be considered as exclusive of the multilateral trading system but, rather, complementary.
14. Bolivia's geographical location determined its participation in the integration processes in
South America, whether economic, physical, or of another nature.  Bolivia's strategic location,
together with its natural resources were crucial in determining Bolivia's position as the integrative
nucleus of the South American region not only in economic and commercial areas but also in thepolitical, social, and cultural areas.
15. As a result, Bolivia would continue progressively to form a centre for distributing energy, and
telecommunication and transport services throughout the continent.
16. The reforms that had been carried out and the economic policy in force, as well as the policies
and plans Bolivia intended to put into action, were fully compatible with the WTO.  One of Bolivia'spriorities was to fully implement its commitments in the WTO.
17. However, full implementation of those commitments involved political, social, and economic
costs.  Bolivia had to make enormous efforts.  For example, the authorities had to deal with anWT/TPR/M/57
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important informal economy, which was a natural consequence of the poverty of the population, they
had to make institutional reforms, formulate and harmonize standards, and fill gaps in the education of
their human resources.  However, Bolivia's efforts to make its practices compatible with commitments
within the WTO, received no corresponding return th rough participation in multilateral trade, which
was marginal and moreover not fully favourable to Bolivia's interests.  Despite the fact that Bolivianexports were limited and not very diversified, they faced major difficulties of access to many markets.
18. The representative presented slides featuring the structural reforms implemented in four
successive stages over the past 14 years.  In the first stage, macroeconomic stability was achieved
through the implementation of consistent monetary and fiscal policies.  Then labour, goods and
services, and capital markets were liberalized.  The third stage consisted in the redefinition of the role
of the public sector, which concentrated its activities in normative and social areas, in a move away
from productive activities.  In the last stage of these structural reforms, public administration wasdecentralized and a regulatory framework was set up to protect economic agents in the recently
privatized service sectors characterized by a situation of natural monopoly.  As a complement to the
process of economic changes, democracy had been consolidated, as reflected by the 17 years of
democratic government.
19. The management policies resulted from the election process but also from a national dialogue
with the different sectors in Bolivia - workers, opposition parties, the Church, and various government
agencies - to set up the government plan.  The fiscal deficit remained under control despite several
adverse developments, such as "El Niño", the international crisis, and the high cost of reforms.
Bolivia had an adequate monetary programme, carried out with the IMF, and was pursuing goals of
growth.  Government expenditures were mainly directed to social areas.  The representative pointedout the successful policy for reconversion of foreign debt, and in particular the debt relief of
US$700 million obtained through the HIPC initiative.
20. In 1985 the growth rate was negative, while in 1998 Bolivia achieved a growth rate of close
to 5%.  Over the same period, inflation was reduced from over 8,000% to less than 5%.  The
representative of Bolivia also highlighted other macroeconomic indicators:  the increase ofinternational reserves, to seven months of imports in 1998;  the level of deposits, which stood at more
than US$3,000 million in 1998;  considerable decrease in investment risk, from 10.6% in 1987 to
2.5% in 1998;  and the rise in total investment and savings, from 7.2% of GDP in 1985 to 19%
in 1998.  Bolivia's economic growth in 1998 was more  than twice the average growth rate in Latin
America, and inflation was less than half the average for Latin American countries.
21. With respect to social areas, progress had been made but there was still a great deal to be
done.  In 1976 poverty affected 85% of the population;  while the situation had improved, in 1998poverty still affected 70% of the population.
22. Bolivia was seeking to invert the figures for gr owth and inflation, to reach a growth rate of
7% and an inflation rate of 4% by year 2002.  The government programme was based on four pillars:
the opportunity pillar, which sought greater growth rates with higher income and more employment;
the equity pillar, aimed at policies for the most vulnerable sectors, in order to reduce poverty;  underthe dignity pillar, Bolivia had rid itself of the stigma of cocaine production - the authorities were
aiming for a country without drugs by the year 2002;  and the institutional pillar, which was
fundamental to ensure greater growth, through more efficiency and justice in Bolivian institutions.
23. Bolivia was not going to achieve these results alone, the authorities needed the support of its
civil society, the entrepreneurs, and the international community.  Without this latter support Boliviacould not achieve these goals.
24. Before 1985, Bolivia was known primarily as an Andean country that produced minerals and
oils, mainly for markets in Europe, with market s for other goods in South America.  From 1985,WT/TPR/M/57
Page 6
Bolivia began a radical change of those features and of its international image.  Bolivian exports
became more diversified;  production of exportable goods now included agricultural products, oil,
textiles, wood, processed wood, gold jewellery, and various food products, as well as the production
and marketing of oils and hydrocarbons and natural gas.  While the structure of exports was moving
towards goods incorporating more value added, progress had fallen short of expectations and of whatBolivia could achieve.
25. Since the previous Review, agricultural exports had increased substantially.  The rules
governing exports were based on tax neutrality.  Bolivia had proposed the setting up of a solid
strategic alliance with the private sector;  one example of this was the creation of the Ministry of
External Trade and Investment, which had linked public and private bodies such as the National
Export Council (CONEX),  the National Council of Free Trade Zones (CONZOF), the Single Office
System for Exports (SIVEX), the Promotion Center  of Bolivia (C-PROBOL), and the Administration
of Port Services (ASP-B).
26. The representative of Bolivia, noted that there were no major import restrictions, and that the
import regime was open and transparent. Imports of capital goods and inputs were very important
(78% of total imports).  There were several factors that promoted investment in Bolivia, such as non-
discriminatory treatment of foreigners, the diversity of natural resources, the development of theservices sector, the improvement of infrastructure, the presence of relatively skilled manpower, and
the strategic links to neighbouring countries.WT/TPR/M/57
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III. STATEMENT BY THE FIRST DISCUSSANT
27. The first discussant (Ambassador Jorge Voto-Bernales), stated that the documentation
prepared by the Secretariat and the Report by the Bolivian Government illustrated the efforts made by
Bolivia in two convergent directions in relation to the agreements concluded within the WTO
framework.
28. Firstly, there was the progress and the results achieved within the context of the policies of
structural adjustment and reform of the Bolivian economy.  Since the mid 1980s, Bolivia had been
applying structural adjustment and reform progra mmes that had substantially modified the basic
structure of its economy and the nature of its fiscal, monetary, foreign exchange, and trade policies.
Discipline, and the success of these policies, had enabled the Bolivian economy to switch from an
essentially protectionist structure, with a strong element of state ownership and intervention, to a
modern, essentially unregulated economy open to the international markets, in which the role of theState had been radically redefined.  These policies had made it possible to obtain a series of positive
results in terms of the basic macroeconomic indicators, the following, in particular, deserving
mention:
− Between 1993 and 1998 GDP grew at an average rate of 4.6%.
− Cumulative inflation was brought down below 5%.
− By 1997 the share of merchandise trade to GDP had risen to 43%.
− In 1998, the overall fiscal deficit, which in 1993 had been around 6% of GDP, fell to 4%.
− The trend in investment, encouraged by the new macroeconomic framework and legal
reforms, was also favourable.  In 1993 it amounted to 8% of GDP, rising to 13% in 1997 and
reaching 17% in 1998.
− In the last five years, the balance of foreign-held medium- and long-term public debt had
shown a downward trend.  In 1993 it was equivalent to 66% of GDP, but by 1998 the figurehad fallen to 51%.  The situation of the external sector and the availability of resources for
anti-poverty programmes improved after the application of the programme for heavily
indebted poor countries, under which Bolivia received about US$760 million in official debt
relief.  The IMF had pointed out that this was possible because the country had established asound record of macroeconomic results and policy reform and was the first country in Latin
America to receive debt relief within the framework of the initiative (and the second among
all the beneficiaries).
− Bolivia had been very effective in developing agricultural exports, which, as the Secretariat
report made clear, had displaced the mining sector as the domestic economy's leading export
sector.
29. This performance by the agricultural sector was certainly relevant, especially given the
system of neutral incentives for which the Government had opted.  He asked for an assessment by the
Bolivian authorities of the exceptional trend in the production and exportation of agricultural
products, especially soya, within the context of the elimination of traditional aid for the agricultural
sector.  He asked whether this was a result of the macroeconomic reforms, of intensive investment in
the sector, of the stimulus provided by the liberalization of export markets, or of all these factors.
30. Clearly, there had been successes in Bolivia in relation to the management of macroeconomic
variables and these successes showed signs of stability.  However, there was concern about their
sustainability in the medium and long term.  The World Bank was worried about the prospects for the
economy as it continued to be based on the production of raw materials.
31. The good macroeconomic results had been largely due to the effectiveness with which the
first-generation reforms had been applied, especially those relating to the unification of the exchange
rate, the elimination of restrictions on imports and the free movement of capital, the granting ofWT/TPR/M/57
Page 8
foreign investment guarantees, the rationalization and simplification of the tax and tariff systems, the
elimination of official prices, the liberalization of interest rates, and privatization policies.
32. The macroeconomic successes had been appreciated by the world financial and economic
community.  However, doubts remained with regard to their sustainability and the medium-term
future.  According to the World Bank, Bolivia still faced a difficult outlook in the medium term.  The
economy depended on exports of a few basic products to markets whose development was uncertain,
and the diversification of the export base would take some time.  Moreover, the weakness of the
physical and social infrastructure and the limitations of the human resource base would make itdifficult for Bolivia to maintain high rates of growth.  Bolivia's medium-term strategy was to expedite
the growth of GDP from its recent levels of 4% per annum, maintain price stability, and alleviate
poverty.  An important question was whether sustained growth of 4% per annum was consistent with
the current availability of external and internal financing, given Bolivia's low domestic savings rate
and the precariousness of its terms of trade.  In view of the success of the capitalization programme interms of foreign direct investment commitments, these levels of private investment were achievable.
Furthermore, domestic savings were expected to increase, encouraged by a greater fiscal effort,
confidence in the maintenance of appropriate macroeconomic policies, and the introduction of thenew pension system.
33. As far as trade policy was concerned, Bolivia had made and was making a very positive
contribution to the world open trading system and to the goal of progressive trade liberalization.  Its
trade regime ensured, at the very least, MFN treatment for all WTO Member countries.  And its tariff,
uniform and ad valorem  for all imports, was a real incentive for the exports of its WTO partners,
averaging, with only a few exceptions, 10%.  As regards domestic taxes, value-added tax was applied
at an average level of 15%.  Bolivia's real tariffs were much lower than those resulting from the
binding of its Schedule in the WTO.  But this, rather than a "blind spot", was the expression of a
desire to open up its markets, and whether it wa s formalized within the mechanisms of the WTO
would depend on due consideration of the advantages accorded and the benefits received under theinternational trading system.  In this connection he asked how, within its trade liberalization policy,
the Government reconciled its WTO commitments with those within the Andean Community and in
various bilateral agreements;  and for the Bolivian Government's assessment of the advantages
received and concessions granted in the context of the application of the Uruguay Round Agreements.
34. Bolivia had also achieved concrete success in narcotics control;  the indicators showed that
the illegal cultivation areas had been reduced substantially.  He asked whether these successes were
the result of crop substitution strategies or of an interdiction policy suitably applied.
35. The World Bank and the IMF had noted that the consolidation of the first-generation reforms
had given Bolivia room for second-generation reforms.  Among other things, these involved the
reform of the State, the anti-poverty campaign, and the independence of the judiciary.  In recentweeks, Bolivia had agreed with the World Bank a comprehensive anti-poverty plan, which
harmonized Bolivia's domestic anti-poverty campaig n with the framework approach of the World
Bank.  He enquired about the objectives of this plan and how it was to be financed.
36. To sum up, the discussant considered that Bolivia had made a considerable effort to reform its
national economy especially as regards compliance with WTO rules in the areas of trade in goods and
services and intellectual property.WT/TPR/M/57
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IV. STATEMENT BY THE SECOND DISCUSSANT
37. The second discussant (Mr. Thórdur Ingvi Gudmundsson of Iceland) concentrated mainly on
customs administration and import regulations, fiscal policy and budgetary reforms, and trade in
services, particularly financial services.
38. Despite being rich in natural resources, Bolivia was among the poorest Latin American
countries, with a GDP per capita of some US$1,000.  Therefore it was particularly impressive to see
the reforms undertaken by the Government during the decade in an effort to liberalize trade and to
reduce the overall role of the State in the economy through privatization.  The Government had
imposed new measures for growth and prosperity by eliminating restrictions on foreign direct
investment.  He complimented the Bolivian Government, and believed these policies would without
doubt benefit the people of Bolivia.
39. With respect to import policies and customs administration, some trade statistics presented in
the Secretariat's Report were particularly disturbing.  For example, in 1997 the Bolivian authorities
reported imports from four neighbouring count ries, Argentina, Brazil, Chile and Peru, of
US$704 million, while these countries reported exports to Bolivia of US$1,512 million.  The
difference amounted to some US$800 million.  The Secretariat Report noted that the official GDP per
capita in Bolivia (around US$1,000) might underestimate the actual figure since it excluded the largeinformal sector activities, such as contraband, and numerous retail and other services activities.  It
also stated that these statistical gaps may arise from problems identifying destination or origin.  In this
context, the discussant pointed out that according to information provided by the U.S. Central
Intelligence Agency, Bolivian GDP per capita was US$3,000.
40. Assuming the export statistics from neighbouring countries might be more accurate than the
Bolivian import statistics, the Bolivian Government was losing an enormous income in terms of duties
and other internal taxes such as value-added tax.  An ad valorem  rate of 10% was applied to most
products and an additional VAT of 15% was imposed on imports.  Therefore, the conclusion could be
drawn that a potential government income of millions of U.S. dollars never found its way into the
Treasury.  He recognized that this was playing with figures and statistics, and not all was as it seemedin these matters.  However, he believed that Bolivia should worry about the situation, although it was
not the only country affected by these problems.  He recognized that the Bolivian Government was
fully aware of the problem, as was reflected both in the Government and Secretariat Reports.
41. It was more than likely that customs administration, with its documentation requirements,
lack of sufficient customs valuation, and inspection practices, as well as, until recently, relatively high
tariffs, was one of the major reasons for this situation.  However, the Government was obviously
making impressive efforts to bring the problem under control, by imposing the new tariff system, andit had announced major changes in its import regime to become effective this year.  He was interested
to know whether the Bolivian delegation could elaborate in more detail on the content of the
forthcoming changes and their predicted effects on import revenues.
42. The Bolivian Government had made important and impressive fiscal and budgetary
improvements in recent years.  The fiscal defic it narrowed from 6% of GDP in 1993 to historically
low levels of less than 2% in 1995 and 1996, although it had grown to 4% in 1998 due to pension
system reform.  The inflation rate had been brought down from 9.3% in 1993 to a record low of 4.4%
in 1998.  These latest results were even more impressive when compared with the 12,000% inflation
rate experienced by Bolivia 15 years ago, and confirmed how seriously and successfully the
Government of Bolivia had addressed the fiscal and monetary problems.
43. Turning to trade in services, the discussant noted that the services sector was the most
important in the Bolivian economy, generating about half of the country's GDP and employing
roughly 75% of the workforce in urban areas.  Privatization and trade liberalization policies had,WT/TPR/M/57
Page 10
without doubt, had the greatest impact in the services sector, and foreign investment had also played a
vital role.  Bolivia had signed the Fourth Protocol on telecommunication and the Fifth Protocol on
financial services, which were undergoing ratification by the Parliament.  Bolivia had made
commitments in hospital services, hotels and restaurants, travel agencies, and recreational and
sporting services.  In some areas, existing legislation set on the basis of Bolivia's commitments underGATS offered more liberal treatment to foreign providers than the bindings under GATS.
44. For telecommunication services, in general, Bolivia had not limited market access or national
treatment on three modes of supply, namely cross-border supply, consumption abroad or commercial
presence.  For financial services, however, national treatment was left unbound for insurance services,
but there were no limitations to market access on commercial presence.  In the banking sector, some
trade and competition barriers still existed, bearing in mind exemptions under the Fifth Protocol
concerning a market access limitation on commercial presence for acceptance of deposits and otherrepayable funds from the public, meaning that branches of foreign banks might only provide these
services to foreigners.
45. Bolivia therefore still had some way to go in it s effort to fully liberalize the services sector,
but the importance of the sector to the economy, reflected in an average annual growth of 4.6% over
the last six years, should be an encouragement to the Bolivian Government to take further steps in that
direction.
46. Despite enormous changes in the services sect or in Bolivia leading to liberalization, trade
distortions remained in certain sectors.  The Secretariat Report highlighted the transport services
subsector, where some concerns remained on the potentially discriminatory nature of certain rail
freight charges levied at higher rates on imports than on domestic products or exports.  Questionsarose whether this measure was not actionable under Article 17 of the GATS on National Treatment.
47. The discussant was convinced that the Bolivian Government was sincerely and faithfully
fulfilling its commitments made under the WTO Agreements, and was definitely on the right course
in that respect.WT/TPR/M/57
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V. STATEMENTS BY MEMBERS OF THE TRADE POLICY REVIEW BODY
48. Members welcomed the many important steps taken by Bolivia since its first Review in 1993
to effect trade liberalization and economic reform, while generally bringing its regime into
compliance with WTO rules.  Several Members noted with concern the difficulties faced by small
developing Members, such as Bolivia, in implementing the WTO commitments, and believed moreinternational cooperation was needed in providing technical and financial assistance. Delegations
emphasized the dynamism of Bolivia's Geneva-based representatives and congratulated, in particular,
Ambassador Ms Silvia Avila Seifert for her valuable contribution to the activities of the WTO.
49. The representative of the United States noted that Bolivia had made substantial efforts to
create a stronger institutional environment supportive of private economic initiatives in a market
economy.  This had contributed to economic stability and growth, and increased foreign investment
for Bolivia.  While Bolivia's foreign account deficit was increasing, exports were becoming morebalanced, with respect to agricultural products;  the increase in imports was driven by capital
expenditure, which would increase growth and productivity.  She pointed out some areas in which
Bolivia could and should go further to consolidate its outward-looking trade regime.  Bolivia was
encouraged to consider bringing its WTO commitmen ts in some areas into line with its current
policies, such as binding tariffs closer to applied rates and undertaking new commitments that wouldreflect the openness of its services market.  The United States believed that Bolivia should
contemplate new commitments, such as in the area of government procurement.  Her delegation had
submitted several questions in writing and looked forward to receiving responses.
50. The representative of Hong Kong, China co mmended Bolivia's strong commitment to the
strengthening of the multilateral trading system, especially in the face of the political, economic and
social costs, which, as a developing country, were difficult to accommodate.  She noted that Bolivia
had been maintaining a simple tariff regime, which greatly facilitated business, however, 45% of total
imports in 1997 were subject to preferential treatment.  She encouraged Bolivia to reduce the gap
between the MFN and preferential rate so as to enhance trade, irrespective of source, and believed that
this would support efforts to minimize tariff evasion.  She welcomed the expected adoption of theCustom Valuation Agreement by September 2000.  With respect to consumption taxes, the
representative encouraged Bolivia to apply ad valorem  rates to beverages, rather than specific rates.
She noted that the specific consumption taxes were adjusted every year by the fiscal administration;
while recognizing the need for periodic adjustment, she considered that the more stable ICE rate
would provide a more facilitating environment for business.  Regarding government procurement, the
representative urged Bolivia to consider lowering and eventually eliminating the 10% preference
provided to national firms.
51. The representative of Japan noted his country's good trade relations with Bolivia;  although
the trade volume itself was not large, Japan was Bolivia's largest trading partner in Asia.  He noted
that Bolivia still had weak social fundamentals, and encouraged further efforts by the Bolivian
Government on economic and social reforms.  He requested further information on measures taken to
incorporate the informal activities into the formal economy, and to decentralize the publicadministration.  Referring to some points included in Japan's written questions, he asked for
clarification regarding Bolivia's non-application of the common external tariff of the Andean
Community.  Noting that the current competition la w applied to only five sectors, he wondered
whether Bolivia had any plan or intention to establish a general competition law that would apply to
all sectors.
52. The representative of Chile highlighted the increasing economic relations between Bolivia
and Chile and in particular the importance of Bolivia as a destination for Chilean foreign direct
investment.  Both countries were negotiating to extend the agreement on tariff preferences in force to
create a free-trade zone for goods and services.  The representative also highlighted the Bolivian
Government's commitment to fight poverty, as well as to eliminate the coca-cocaine sector by 2002.WT/TPR/M/57
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On the subject of the customs reform project, he asked for clarification on the context of this reform
and whether the project encompassed the commitments under the Agreement on Customs Valuation.
53. The representative of Australia expressed particular interest in hearing Bolivia's views on the
relationships between its extensive regional agreements and the multilateral trading system.  He was
concerned that the transparency and predictability of Bolivia's trade regime might be undermined byits participation in various preferential regional trade agreements as well as by the gap between
applied and bound tariff rates.  He welcomed Bolivia's interest in the further liberalization of
international trade in agriculture.
54. The representative of New Zealand noted with interest that agriculture and related activities
were largely free of government intervention, including export subsidies.  He raised some concerns
regarding the implementation and enforcement of certain trade policies.  In particular, he asked
whether the Government had plans to review the use of preshipment inspection firms in the near
future, given the anxiety caused by the ongoing use of preshipment inspection at the border.  The
representative also requested more information on the new customs law, as well as its planned date of
enforcement and implementation.  He shared the concerns raised by other delegations about the
apparent lack of cohesion in trade policy development deriving from the fact that these
responsibilities seemed to be shared by a number of ministries.  He also pointed out the complexitiesresulting from the increasing number of preferential agreements.
55. The representative of Mauritius highlighted the supportive role played by regional
cooperation and initiatives in Bolivia's development.  He noted that, despite the weaknesses and
vulnerabilities of its economy, Bolivia had done everything possible to implement the provisions of
the Marrakesh Agreement.  The international commun ity at large should recognize these efforts and
provide small countries like Bolivia with further technical and financial assistance to enable their
effective participation and integration in the global economic system.  The rule-based multilateral
system had many imbalances and asymmetries, which needed to be addressed so as to restore the full
balance of rights and obligations and to enable all to attain full benefits.
56. The representative of Turkey emphasized the crucial role that foreign direct investment had
played in the overall revitalization of Bolivia's economy.  One of the challenges facing the Bolivian
authorities was the continuation of efforts to diversify the composition of its export products.  He
asked Bolivia to outline its present policies and any additional measures contemplated to promote
exports and export diversification.
57. The representative of the European Union recalled that the EU was Bolivia's major trading
partner;  moreover most of Bolivian exports to the European Union were exempt from customs duties.
The representative believed that Bolivia's difficulties in fully enjoying the advantages andopportunities of its participation in the multilateral trading system were of three kinds.  In the first
place, there was a certain legal and institutional fragility, as could be seen from the importance of
contraband and illicit drug trafficking.  The second difficulty was the social problem of insufficient
dissemination of economic growth throughout the population, which required priority to be given to
poverty reduction and the improvement of human resources through promotion of health andeducation.  And, finally, the vulnerability of the Bolivian economy to external shocks, which was due
to insufficient export diversification.  He recognized that Bolivia's economic and social development
plan was pointing in the right direction, and encouraged Bolivia in its determination to tackle these
fundamental issues.  With respect to trade policy, the representative encouraged Bolivia's continuing
efforts in the liberalization and adaptation of certain mechanisms and practices, including: reducingthe gap between applied and bound tariff rates;  cons olidating the establishment of a real customs
union with the Andean Community, through a common external tariff;  the adoption of the Agreement
on Customs Valuation within the scheduled time-frame;  the abolition, as soon as possible, of
preshipment inspection mechanisms;  and the adoption of the Agreement on GovernmentWT/TPR/M/57
Page 13
Procurement.  The European Union was ready to consider favourably any request for technical
assistance from Bolivia, and was willing to collaborate with Bolivia on all WTO issues.
58. The representative of Colombia emphasized his country's importance as a destination for
Bolivian exports.  He believed that Bolivia was fully committed to multilateralism and that the full
application of multilateral commitments should result in benefits for the smaller economies.  He wasconvinced that Bolivia would pursue its liberalization process and consolidate its international
integration. The representative pointed out that, like many other developing economies, Bolivia
suffered from discriminatory treatment through measures imposed by certain, more developed
economies, which reduced its access to their markets, and affected the survival of numerous families.
59. The representative of Brazil indicated that MERCOSUR and Bolivia had established an
agreement of Economic Complementarity within the LAIA framework, which had entered into force
in 1997, and had given Bolivia the status of an associated member of MERCOSUR.  Its objectiveswere to create a legal and institutional framework for economic cooperation and integration;  to create
a free-trade area within a ten-year period;  to promote investment;  and to promote technical and
scientific cooperation.  This agreement had resulted in intensified economic relations between both
partners, and she highlighted, in particular, the increased participation of Brazil in the Bolivian
economy in two areas:  investment in land and pr oduction of soya;  and investment in the Bolivia-
Brazil gas pipeline.  She asked the Bolivian delegation to report the developments and main results of
the integration process between th e Andean Community and MERCOSUR.
60. The representative of the Republic of Korea expressed concern about the apparently complex
and burdensome registration requirements for importers.  He requested clarification on this point, and
details of the planned customs law and regulations.  Referring to the Bolivian notification under theTRIMs Agreement concerning the Hydrocarbons Law, he asked for the rationale and the volume of
production concerned by this measure.
61. The representative of Switzerland noted that the gap between applied and bound tariffs was
unnecessarily high.  He encouraged  Bolivia to expand its commitments under the GATS and to join
the Agreement on Government Procurement.  He noted with great interest that Bolivia had prepared alaw covering intellectual property rights in or der to implement the TRIPS Agreement, and asked
whether it would be promulgated soon.  The representative requested clarification on how Bolivia
complied with the obligations under Article 70 paragraphs 8 and 9 of the TRIPS Agreement.
62. The representative of Uruguay commended Bolivia for the progress realized in recent years,
and particularly welcomed the recent regional trade agreement reached between Bolivia and
MERCOSUR.
63. The representative of Barbados highlighted the active participation of her country with
Bolivia in the Free Trade Area of the Americas' negotiations.
64. The representative of Cuba noted that Bolivia was not receiving its due share of benefits from
its participation in the multilateral system, in particular by the absence of reciprocity in market-access
opportunities.  The representative emphasized the fact that greater financial and technical assistance
should be provided to Bolivia.  He also highlighted the positive effects of the help received by Boliviathrough the debt-relief programmes, which had enabled it to reduce its debt services and retarget these
resources to social areas.
65. The representative of Ecuador highlighted Bolivia's  efforts to contribute to trade liberalization
both regionally and globally.  He emphasized the perf ormance of the agricultural sector in Bolivia,
which had grown significantly without recourse to subsidies or other such measures.  Therepresentative noted the potential for further expansion of agricultural exports, if liberalization of
agricultural markets were to be introduced in the next round of negotiations.WT/TPR/M/57
Page 14
66. The representative of the Czech Republic wondered about the fundamental causes for the lack
of success of free industrial and trade zones in Bolivia, and asked whether the Government had plans
to develop these zones in the future.  Concerning the particular attention paid by Bolivia to the Latin
American integration process, he noted that Bolivia was the only country linked with the two major
regional groups, the Andean Community and MERC OSUR.  The representative wondered about the
basic effects, positive or negative, that Bolivia expected from the integration efforts of the Andean
Community and MERCOSUR w ith the European Union.
67. The representative of Canada noted the stable commercial relationship enjoyed by Bolivia
and Canada.  He referred to an environmental cooperation memorandum, which had already resulted
in technology transfer projects on clean technologies, environmental risk analysis, and oil-spill
countermeasures and response.  Canada looked forward to further collaboration with Bolivia to
enhance the flows of trade and investment, particularly in priority sectors such as agriculture, in whichboth countries had similar goals in reforming its international trade regime.  Canada had recently
concluded a trade and investment cooperation arrangement with the Andean Community, and was
also a partner with Bolivia in the Free Trade Area of  the Americas negotiations to liberalize trade and
investment throughout the hemisphere.  He recognized the remaining challenges, and expressed
confidence that the Bolivian Government would ensure that economic pressures would not  lead to aretrenchment of trade liberalization initiatives.
68. The representative of Argentina highlighted the historical ties between Argentina and Bolivia.
The recent increase of these traditional bilateral relations, through the adoption of important political
decisions, had made possible the signing of many agreements and the establishment of various
institutions to promote integration in political, economic, commercial, energy, scientific, and culturalareas.
69. The representative of India noted that Bolivia's trade relations were increasingly focussed on
preferential trade agreements, as reflected by the several agreements concluded recently by Bolivia.
With respect to the agreement between Boliv ia and MERCOSUR, the representative wondered
whether the time-frame of 15 to 18 years to achieve full liberalization could be shortened.  Herequested comments from the Bolivian delegation on the benefits generated by the different tariff
preferences schemes, such as the Andean Trade Preference Act and the Generalized System of
Preferences.  He fully shared the view that more international cooperation was needed to enable
countries to fully implement WTO commitments and reduce imbalances and asymmetries in the
international economic scene.
70. The representative of Morocco, noting the modest trade flows between her country and
Bolivia, called for the consolidation of commercial relations with Bolivia through economic
integration based on free circulation of goods, services, and persons.
71. The representative of Venezuela commended Bolivia for the achievements of its economic
adjustment process and institutional reforms.  He highlighted Bolivia's determination to promote
economic growth through the development of production facilities rather than through the expansion
of its traditional production.  Venezuela would support Bolivia in its effort to diversify its economyand to incorporate the whole Bolivian society into the growth and development process.
72. The representative of Thailand, speaking on behalf of ASEAN, noted with satisfaction the
very prudent macroeconomic policy implemented by Bolivia and welcomed its impressive results.  He
also pointed out that Bolivia had avoided the us e of anti-dumping and safeguard measures and hoped
it would continue along this policy line.  Finally the respresentative encouraged Bolivia to pursue itsintegration into the multilateral system.WT/TPR/M/57
Page 15
VI. REPLIES BY THE REPRESENTATIVE OF BOLIVIA AND ADDITIONAL
COMMENTS
73. The replies by Bolivia were organized into three themes:  (i) the economic and social
environment;  (ii) trade policy;  and (iii) international negotiations.
(i) Economic and social environment
74. The replies were based on Bolivia's principles of opportunity, equity, dignity, and institutional
reform.
75. On the issue of opportunity, a number of questions were raised regarding the monetary policy
of Bolivia.  A major objective of the Central Bank of Bolivia was to maintain the stability of the
Bolivian currency, this objective had been maintained since the mid 1990s.
76. The decreasing inflation trend had been achieved through coherent and coordinated fiscal and
monetary policies.  The average interest rate in Boliv ia had also been levelling off, indicating that the
economic policy had not slowed down the economic activity.
77. Credits to all sectors were prompted through the financial system and at market conditions,
this applied in particular to the agricultural sector.
78. With respect to the customs legislation, the new law to be adopted was aimed at increasing
transparency, reducing discretionality of customs officials, and moving away from politicalnominations.  In addition, smuggling had been characterized as a criminal offence leading to up to six
years in prison.  The new law intended to incorporate the WTO customs valuation provisions.
Minimum import prices were not used.
79. The representative highlighted the importance of the institutional reforms to allow economic
agents to rely on clear economic rules.  With regard to sectoral regulations, he underscored the factthat no private monopoly was recognized.  In some cases concessions for public services might be
granted for a period up to 40 years.  He confirmed that the new regulatory system applied only to five
sectors, while the law contained provisions to extend its coverage to additional sectors.  The results
obtained through the new sectoral regulatory system were diverse;  while in some sectors the new
system had been well established, in others it was being implemented.  The Code of Commerce andthe Law on Investment applied to the non-regulated sectors.  The Government of Bolivia was drafting
a comprehensive competition law, which would apply to all sectors.
80. Regarding sectoral liberalization, the representative made two clarifications.  First, with
respect to the trade-related investment provision in the hydrocarbons sector, notified to the WTO, the
restrictive measure was still in place, but this measure could progressively be removed since
important oil and gas deposits had been found recently.  A new Supreme Decree had been passed
recently, authorizing hydrocarbons producers to export 10% of their production without requesting anauthorization from the Hydrocarbons Superintendency.  Second, regarding the sugar market, this
industry had received no subsidies from the Bolivian authorities, and the sector had been fully
privatized.
81. With regard to the financial regulation system (SIREFI), the representative provided
extensive details (Annex I).  He noted that the Government was drafting a deposit guarantee fund law;its main objective would be to establish guarantees for deposits under US$10,000 to improve the
solution of crisis situations.
82. Other institutional measures were contemplated by the authorities, including a law on
administrative procedures, to reduce bureaucracy and discretionality in the public sector.WT/TPR/M/57
Page 16
83. Regarding the equity pillar, a number of questions had been raised on the social policy
conducted by the Government, and its relations with the World Bank.  The representative pointed out
that the objective of the new plan was not to obtain more resources from the Bank but rather to
coordinate the different projects that Bolivia already had, and allow a more flexible use of the
resources provided by the Bank.
84. Regarding labour issues, the representative recalled that the Singapore Declaration stated that
the competent body to establish international labour standards and to assure their application was the
International Labour Organization.
85. With reference to the dignity principle, he indicated that Bolivia was aware of the need to
eradicate any surplus of coca cultivation in order to remove the stigma, which weighed heavily on the
country.  The aim was not to apply subsidies for the eradication but rather to ensure controls, with
modern technological means such as photometry via satellites, and with the intervention of publicforce.  The success of eradication relied mainly on the substitution policies in favour of other tropical
crops such as bananas, palm, and pineapples.
86. The first discussant expressed his appreciation for the comprehensive information provided
by the representative of Bolivia.  He highlighted two important points of the government policy
programme.  He first recalled the importance of the reform of customs administration, described bythe Bolivian representative, and its key link to the multilateral trading system.  The second point
concerned the poverty alleviation programme supported by the World Bank:  he welcomed the
consolidation efforts introducing more flexibility.
87. The representative of Japan joined the first discussant in welcoming the social programme
and the ambitious customs reform.  He particularly welcomed the implementation of the Customs
Valuation Agreement by the end of the grace period, and the elimination of the use of minimum
prices.  Regarding competition policy, he asked whether Bolivia intended to extend the sectoral
approach to other sectors, or whether the authorities planned to adopt a general competition law.
88. The representative of the European Union expressed a particular interest in the customs
reform, which appeared to be a complete programme of fundamental changes affecting its
administration, its functioning, and all the rules aspects of customs.  He highlighted the importance of
an efficient administration for economic and trade development.  He wondered whether Bolivia had
received technical assistance to implement its ambitious customs reform, in particular from UNCTAD
and the Inter-American Development Bank.  He drew to the attention of the Bolivian delegation that
the European Union was promoting the question of  trade facilitation, including mainly customs
modernization, as a topic for negotiation for the next round, and requested the views of Bolivia on this
issue.
89. The representative of the United States requested details on the time-frame for
implementation of the customs reform and on the expected date for the enactment of the new law.
90. The representative of Morocco shared the view that the WTO was not the appropriate forum
for the discussion of labour standard issues.
91. The representative of Bolivia, responding to questions regarding customs, indicated that
Bolivia's geographical position added to the difficu lty of implementing efficient controls at the
borders, and contributed to the development of high levels of informal trade.  He reaffirmed the great
priority and importance given by the Government to this reform, and in particular to the reduction of
informal trade, and emphasized the need of joint efforts with neighbouring countries.  Bolivia was
negotiating initiatives with some neighbouring countries for integrated controls at the frontiers.WT/TPR/M/57
Page 17
92. The representative clarified the possible confusion generated by the use of minimum import
prices for cars.  This measure applied only to smuggled cars, which were circulating illegally and
which were nationalized according to the referred price list.  Beyond this exceptional case, no import
prices were applied to any new or second-hand imported goods in Bolivia.
93. With respect to competition, the representative recalled that the SIRESE law was designed for
private natural monopolies that had resulted from the process of privatization.  Other sectors were
regulated by the Code of Commerce and the Invest ment Law.  He noted that the Commercial Code
had served its time and that it would be updated and completed with a general competition law.
94. Bolivia did benefit from some assistance programmes, especially in the case of customs
reform, and would be pleased to receive additional technical assistance to strengthen the customs
administration.
95. Regarding the date for approval of the new customs law, he indicated that the text was being
discussed in the Congress.  The time-frame for customs reform was based on a five-year plan, which
had started in early 1999, and could be extended for two additional years.
(ii) Trade policy
96. Bolivia's participation in the WTO reflected it s commitment to overcoming its bi-dimensional
marginalization:  the marginalization of the poor groups of its population, which were the center ofGovernment's social policies; and with regard to the globalization processes the marginalization of the
population, which, despite having access to the opportunities, ran the risk of being excluded.
97. The representative of Bolivia indicated that around 50% of Bolivian exports were granted
preferential treatment, either through negotiated trade agreements or unilateral preferential schemes.
The development of "non-traditional" exports, which referred to all products except minerals andhydrocarbons, and in particular the expansion of agricultural exports since the mid 1980s, was due to
a set of factors that increased productivity.  The main factors were basic infrastructure improvements;
the transfer of technology through investments; m acroeconomic stability; the opening of markets; the
high diversity of natural resources;  and the productivity of the land.
98. Bolivia's export development policy was based essentially on the principle of tax neutrality
and trade facilitating measures.  The institutional development had also had a stimulating impact on
exports, in particular through the development of technical and sanitary norms, which facilitated
access for Bolivian products to foreign markets.  He highlighted the role of export promotion
institutions such as C-PROBOL.
99. With regard to charges, fees, standards, and consumer specific charges, the representative
indicated that preshipment inspection fees collected by the verification firms were charged according
to the cost of the service and were consistent with Article VII of the GATT 1994.  Insurance wasoptional, and freight charges were determined by transport companies through direct negotiation with
the importer.  Bolivian standards regulations applying to imports of goods were based on international
standards:  10% were identical to international norms.  The authorities were drafting a law to govern
the institutional and technical aspects of the application of sanitary measures for agricultural products.
The authorities also envisaged the creation of a national agricultural health service with a view tocontrolling, managing, and certifying the health aspects of agricultural activities, under the tuition of
the Agriculture Ministry.  They were also considering the delegation of a number of tasks at the
departmental level.  The representative confirmed that the departmental governments had no authority
to implement technical or sanitary regulations that could affect imports.WT/TPR/M/57
Page 18
100. With respect to the special fiscal treatment  received by the locally produced alcohol,
"Chicha de Maíz", this product was consumed only in very specific zones of the country and did not
compete with other national and imported alcoholic beverages.
101. Concluding the discussion on trade policy issues, the representative gave details on the only
constitutional restriction applying to foreign investors, which concerned any investment within anarea of 50 kilometres from the border.  He pointed out that a new law derogated this constitutional
provision for the purposes of specific export activities in the areas of transport, telecommunications,
and energy.
102. The first discussant emphasized the role of Boli via's participation in the multilateral trading
system as an important vehicle of development with a view to improving living standards.  He
highlighted the expansion of the agricultural sector , welcomed Bolivia's long-term goal of increasing
the value added and diversification of its exports, and underscored the importance of market accessfor Bolivia's development.  With respect to the ex emption of national treatment for foreign investors
within 50 kilometres of the border, and the new law derogating this restriction, the discussant
wondered whether port administration activities could also be exempted from the constitutional
restriction.
103. The representative of the European Union encouraged the Bolivian Government to avoid the
use of private preshipment inspection companies since import inspection could be considered a public
service and should thus be operated by the public administration.  He believed that this could be
positive and productive in the long term, both in terms of the income that the Government might
expect to derive from this activity and of facilitating procedures.  He enquired about the concerns
underlying the restriction of foreign investment in areas close to the border.
104. The representative of the United States asked whether the Bolivian Government planned to
eliminate the export restriction applying in the hydrocarbons sector.  He also pointed out the various
sanitary and technical requirements adopted by prefectures within Bolivia, which complemented and
in some cases strengthened national requiremen ts, and wondered how the Government was handling
this issue.
105. The representative of Bolivia indicated that ownership restriction near national borders
resulted from historical reasons and territorial conflicts, and that it was therefore difficult to remove.
The new Law No. 1961 released part of this limitation but did not apply to the port administration
activities.
106. Regarding preshipment inspection, the representative indicated that before considering
integrating these services under public administration, Bolivia needed to be able to rely on an efficient
and transparent administration, which was not yet the case in Bolivia.
107. Regarding prefectural regulations, prefectures were not competent to establish independent
regulations;  their attribution was limited to the ap plication of measures decided at the national level.
108. On gas export restrictions, the representative pointed out that Bolivia was applying its
commitments under the TRIMs Agreement, and that exports of hydrocarbons were being deregulated.
(iii) International negotiations
109. The replies on this theme were organized under two major headings:  participation in the
processes of regional integration;  and participation and degree of commitments under the WTO.WT/TPR/M/57
Page 19
110. Regarding regional integration, as already mentioned both in the Government Report and in
Bolivia's opening statement, based on its particular geographical position, Bolivia had given priority
to the processes of regional integration.
111. Referring to concerns raised about the notification requirements of regional agreements, the
representative indicated that since the Andean Community was created on the basis of the AndeanGroup it did not need to be notified again.  New agreements subscribed to by Bolivia within the LAIA
framework were notified or were to be notified by the LAIA.
112. The representative gave extensive details on the scope of Bolivia's participation in the two
major regional integration processes, the Ande an Community and MERCOSUR (Annex II).  She
emphasized the special treatment enjoyed by Bolivia  within the Andean Community since it had been
exempted from applying both the common external tariff and the price-band mechanism for
agricultural products.
113. With regard to the compatibility of Bolivia's agreement with MERCOSUR and the recent
negotiation of the Andean Community and MERCOSUR, the representative indicated that the latter
negotiations were taking into account the special situation of Bolivia, and that any agreement to be
reached would be followed by a convergence of the two negotiated agreements.
114. Concerning Bolivia's position in future negotiations, the country was actively participating in
the Free  Trade Area of the Americas.
115. Turning to Bolivia's participation in the WTO, the representative reiterated Bolivia's
determination to participate in the multilateral trading system on the understanding that this system
should contribute to reducing the asymmetries of levels of development.  She also emphasized the
complementarity of regional and multilateral liberalization processes.
116. The representative raised concerns about the important difficulties of market access faced by
Bolivia.  She also pointed out the considerable efforts made by Bolivia to conform to its obligations
under the WTO.  Bolivia believed that new negotiations should be opened with a view to meeting the
needs and expectations of all Members, including developing Members.  In this context, and in
response to several suggestions for an extension of Bolivia's concessions under the WTO, such asreducing binding levels or extending GATS commitments, the representative said that these
possibilities would be examined in future negotiati ons in the light of the expectations Bolivia could
derive from such negotiations.
117. The representative provided answers to more specific WTO issues.  She considered that the
open trade regime maintained for more than a decade, constituted a sufficient indicator of the constant
and increasing openness characterizing Bolivia's trade regime, and believed that this predictability
was not seriously undermined by the gap between ap plied and bound rates.  With regard to the latter,
the representative confirmed that Bolivia had bound all its tariff rates.
118. With respect to customs valuation, she confirmed that the new customs law contemplated the
implementation of the Customs Valuation Agreement.  In addition, a recent Andean Community
Decision on customs valuation had to be adopted by the Parliament.   The representative indicated that
the new customs law had no specific provisions on rules of origin.
119. On the subject of intellectual property rights, the representative indicated that international
commitments were consolidated in national legislation, but Bolivia still needed to draft a code on
intellectual property, which would ensure comprehensive treatment for all the areas and incorporate
such measures in a comprehensive framework.  For this purpose a National Service of Intellectual
Property was being established, which did not imply that there was no institution currently in chargeof these issues.  She emphasized the high cost of implementing these commitments, in particularWT/TPR/M/57
Page 20
given the large informal sector characterizing the Bolivian economy, which was practically a natural
consequence of the high poverty levels.
120. Referring to concerns raised on government procurement issues, the representative indicated
that Bolivia was not intending to join the plurilateral Agreement on Government Procurement.
121. The first discussant welcomed the detailed replies and precision provided by Bolivia.  He
particularly commended the efforts Bolivia was making to modernize its country and to implement
WTO commitments.
122. The second discussant wondered whether Bolivia would provided complementary answers
through an additional document to be distributed to delegations at a later stage.
123. The representative of Bolivia confirmed that an additional document would be provided latter.
124. The representative of Uruguay congratulated Bolivia for the detailed answers provided both
orally and in writing despite the limited size of its delegation, and encouraged other delegations to
give written responses to questions raised by Members in the course of the Trade Policy Review
meetings.
125. The representative of the European Union subscribed to the previous point made by Uruguay,
and raised additional questions on the functioning of the Andean Community.  He asked whether the
customs union could be complete since Bolivia was not applying the common external tariff, and inparticular whether preferential rules of origin were still in force within the customs union area.  He
asked whether the adoption of a common external ta riff would be followed by a regime of free
mobility of goods, and if so, how Bolivia could then maintain a special tariff.
126. In response to these latter issues, the representative of Bolivia indicated that the Andean
Community was not a perfect customs union area since all members were not applying the CET;  in
addition, there were several exceptions for members that did apply it.  However, she noted that there
were no restrictions to intraregional trade, and that policy actions were being taken to move towards a
common market by 2005.WT/TPR/M/57
Page 21
VII. CONCLUDING REMARKS BY THE CHAIRPERSON
127. We have had very open and constructive discussions, with Members commending Bolivia in
very favourable terms on its economic stabilization and reform programme implemented since the
previous Review in 1993.  Despite external shoc ks, including El Niño, and institutional weaknesses,
Bolivia has achieved steady growth, sharply reduced inflation, and attracted considerable foreigncapital.  No doubt major factors in this performance have been the modernization of the State,
including the privatization of public enterprises, and consistent trade and investment liberalization,
largely carried out on a unilateral basis.
128. Members viewed Bolivia's trade and investment regime as predictable and transparent.  They
highlighted the virtually uniform ad valorem  tariff of 10% and Bolivia's shunning of non-tariff trade
barriers and trade defence measures.  Bolivia was also praised for its largely neutral incentive
structure that does not discriminate among sectors.  Members noted especially that agriculture waslargely free of government intervention, and had become the major export.
129. Members welcomed Bolivia's Economic and Social Development Plan XXI based on the
principles of opportunity, equity, dign ity and institutionality with a view, inter alia , to alleviating
poverty and marginalization.  Indeed, reforms will have to benefit large sections of the population as
poverty remains a problem.  Moreover, Bolivia's trade and investment regime is undermined bylong-standing administrative weaknesses and a large informal sector.  Members strongly encouraged
Bolivia to further consolidate and build on its recen t achievements by focusing on areas such as stricter
enforcement of the rule of law and bringing info rmal activities into the formal economy.  And the
multilateral system must contribute, particularly with technical assistance;  once needs are clearly
identified, I think that every effort should be made to meet them.
130. Some Members considered Bolivian commitments under the GATS as relatively modest in
light of the liberalization of recent years.  Bolivia's trading system would be strengthened by
expanding its WTO bindings.  Members also invited Bolivia to consider undertaking new multilateral
engagements to close the wide gap between applied and bound tariffs, and to sign the Agreement on
Government Procurement.
131. Bolivia provided orally or in writing detailed clarification on a number of features of it's trade
and investment regime, including:
− statistical reliability due to a large informal sector;
− the apparent dispersion of trade policy responsibilities across a number of ministries;
− customs administration reform process and new customs legislation.  We noted the objectives
of efficiency, transparency and simplification;
− the gap between certain bound and applied tariff rates;
− lower domestic taxes levied on certain locally produced alcoholic beverages;
− potentially discriminatory rail-freight charges collected on imports;
− the nature (voluntary/compulsory;  national/regional) of technical standards and their WTO
notification;
− expectations for export diversification;
− the application of trade-related investment measures under the Hydrocarbons Law;
− existing competition provisions and possible adoption of a general and sectoral competition
law;
− government procurement practices;
− the adoption of new intellectual property legislation and efforts to improve enforcement;
− the ratification of the Fifth Protocol to the GATS on financial services;
− participation in regional trading arrangements, particularly the Andean Community and with
MERCOSUR, Chile, Cuba and Mexico, and their notification under the GATT and GATS.WT/TPR/M/57
Page 22
132. Members expressed their appreciation for the clarification and the oral and written replies by
Bolivia provided in the context of the meeting and are grateful that Bolivia has undertaken to respond
in writing to some specific questions from Memb ers and to make these responses available to the
Membership;  Bolivia has set a good example for all Members.
133. Members recognized the challenges Bolivia faces as a small developing economy in the
application of WTO commitments, and that complying with these commitments had conveyed social
and political costs.  Members were conscious of the importance of complementing domestic reform
efforts with support from the multilateral trading system, and expressed their readiness to consider
positively Bolivia's further specific requests for technical assistance.  Finally, it is my sense that in
view of the dynamism shown by the Bolivian dele gation during this review, Members look forward to
its constructive role in the preparatory process for the upcoming multilateral trade negotiations.WT/TPR/M/57
Page 23
ANNEX I
GENERAL REPLIES BY THE DELEGATION OF BOLIVIA
INTERNATIONAL NEGOTIATIONS
The questions and suggestions relating to the international negotiations and agreements
signed by Bolivia can be grouped into two main cat egories that are closely linked and inter-related,
namely, on the one hand, Bolivia's role in integration processes and agreements, and on the other the
implementation of its commitments in the WTO.
I. BOLIVIA AND REGIONAL INTEGRATION
As indicated at the first meeting to review Bolivia's trade policy, Bolivia attaches the utmost
importance to its participation in the integration processes under way on the American continent.  Its
geographical location at the heart of South America gives it a threefold outlook:  towards the Andes,the River Plate Basin and the Amazon, and it participates in all the integration schemes taking place in
the region, at both the economic and physical levels.
Bolivia is a Member of the Latin American Integration Association (LAIA), within which it
has signed free trade agreements with Mexico and MERCOSUR and preferential trade agreements
with Chile and Cuba.  Bolivia is also a Member of the Andean Community, as well as a ContractingParty to the Amazon Cooperation Treaty and the River Plate Basin Treaty.
Bolivia's participation in several integration schemes that involve trade liberalization may
raise questions, but the commitments under these schemes are fully consistent.
In this connection, replies to several similar questions raised can be grouped under the
following headings.
(1) N
OTIFICATIONS
Regarding the concern expressed at the absence of notification concerning the Andean
Community, which was established in June 1997, it should be pointed out that the Community was
established as part of the integration process that has taken place since the conclusion of the
Cartagena Agreement, which was notified on 12 May 1987.  The Andean Group, which is now calledthe Andean Community, set up a free-trade zone in 1991 and in 1993 decided to adopt a Common
External Tariff, which came into effect in 1995.
The title "Andean Community" marks the beginning of a new stage in the integration process
with the aim of going beyond economic and trade aspects to encompass political, social and cultural
aspects of integration.  The Andean Community is therefore the expression of the political will of its
Member States to establish a community of nations.
Consequently, the creation of the Andean Community as such was not notified to the WTO
because the letter and spirit of the trade provisions agreed by the Andean Group, which had already
been notified in accordance with the enabling clause, had not changed.
Regarding notification of Bolivia's agreements with Mexico, Chile, MERCOSUR and Cuba,
these were concluded with the framework of the LAIA as Partial Scope Agreements.  The Latin
American Integration Association, which was notified under the enabling clause, is responsible fornotifying the conclusion of agreements reached within its framework.  Pursuant to paragraph 4(a) ofWT/TPR/M/57
Page 24
the clause, LAIA made the relevant notifications biannually.  It notified the agreements with
MERCOSUR and Cuba in a report of 26 June 1997.  The other two agreements had already been
notified before this.
It has been suggested that Bolivia should notify the services section of its agreement with
Mexico in accordance with Article V of the GATS.  As already indicated above, LAIA is responsiblefor doing this.
(2) S
COPE OF COMMITMENTS
Andean Community
Since 1991, the Andean Community has had a fully operational free-trade zone, providing a
framework within which the member countries carry on trade-free of tariffs or other barriers in all
products without any exemptions.  This enlarged market has been protected by a Common External
Tariff since 1995.
Bolivia has therefore completely liberalized its market for its Andean partners.  Bolivia
receives special treatment under the Common External Tariff because its land-locked situation means
higher foreign trade costs and this might be cons idered an implicit tariff.  Recognizing this, the
member countries of the Andean Community have allo wed Bolivia to maintain tariff barriers that are
10 and 5% lower and these are included in the Andean Common External Tariff.  Bolivia thereforedoes not have any authority to change its tariffs;   any change in the levels indicated has to be
authorized by the competent bodies of the Andean Community.
Another element of this special treatment is that Bolivia is not obliged to apply the price band,
the mechanism used by other Andean countries to st abilize import prices for certain agricultural and
agro-industrial products.
MERCOSUR
The Economic Complementarity Agreement (ACE) 36 between Bolivia and MERCOSUR,
within the framework of the LAIA, includes an obligation on the gradual establishment of a free-trade
area, encompassing tariffs, within a period of ten years, in the form of specific tariff reductions.  The
tariffs on a limited number of products will only be fully liberalized over a longer period, from 15 to18 years, to meet the concerns of industries on both sides.  In any event, the Agreement will not allow
any exemptions after 18 years.
Bolivia and the Andean Community and MERCOSUR negotiations
As already mentioned, Bolivia is a full member of the Andean Community and has been an
associate member of MERCOSUR since signing the aforementioned Economic Complementarity
Agreement, consequently it is bound under both these integration schemes to liberalize trade in goods.
The other Andean and MERCOSUR countries have bilateral agreements within the
framework of the LAIA which they are ready to put on a multilateral basis following negotiations
between the two blocs.  A framework agreement wa s signed for this purpose in April 1998 and its
major objective is to promote the establishment of a free-trade zone between the two schemes on the
basis of the agreement on multilateral preferences currently being negotiated.
Bolivia has signed this framework agreement, which includes a special article regarding its
situation, and once the terms of the free-trade zone between the two blocs have been negotiated, the
convergence of Economic Complementarity Agreement 36 and the new agreement will begin.
Bolivia is therefore participating in the negotiations taking place.WT/TPR/M/57
Page 25
Bolivia attaches special importance to South American integration so it has fully supported
the convergence between the Andean Community and MERCOSUR, not only at the economic level
but also in the political and cultural spheres.
(3) BOLIVIA 'S POLICY ON FREE TRADE ZONES
Bolivia's policy of openness allows it to participate in the creation of other free-trade zones.
It is currently playing an active role in the negotiations on setting up the Free-Trade Area of the
Americas (FTAA).  In each case, its decision will be adopted in the light of the trade and investment
opportunities afforded by the area.
II. BOLIVIA AND THE WTO
Before responding to the concerns expressed regarding Bolivia's participation in the WTO, we
should like once again to underline Bolivia's political determination to support the strengthening of
the multilateral trading system because it should he lp to attenuate the inequalities in the levels of
development of Member countries.
We should also like to stress that Bolivia views the regional integration processes as effective
tools to accelerate and reinforce more open trade and to promote development;  these activities are not
alien to the multilateral trading system but, on the contrary, are a valuable complement.
Despite the impressive progress that has been made in liberalizing markets, we should
emphasize that there is no guarantee that these are helping to promote equitable growth and
development in the countries making such efforts.  One factor is the impact of liberalization in
developed countries and the other very different factor is the effect on developing countries.
If one analyses trade trends and the current terms for market access, it can be seen that there
are still numerous obstacles directly relevant to the interests and opportunities of developingcountries.  Some countries still maintain protecti onism in distinct and subtle forms, even within
policies on opening up their markets.  Tariffs and other barriers are basically an impediment to the
just aspiration of the developing countries to participate in a spirit of free competition.
Bolivia's situation is undoubtedly similar to that of many developing countries, especially
those with small-scale and vulnerable economies, and it has to make great efforts to meet fully thecommitments it has undertaken in the WTO.  As mentioned in its report, these involve high economic,
political and social costs, which are not being offset by the level of its participation in international
trade.
Bolivia believes that it is essential to take action to reverse this situation, but it will not be
effective if it only focuses on promoting complian ce with the agreements already reached within the
WTO and does not envisage commitments in a new negotiating process that will give full
consideration to the interests of all countries and will promote their equitable growth anddevelopment.
Bearing this in mind and in response to the remarks and suggestions made that Bolivia should
amplify its offers in various services sectors such as insurance, audiovisual works, road transport and
finance, these possibilities will be considered in the light of the outcome of the forthcoming
negotiations, having regard to Bolivia's priorities and in line with commitments that meet itsexpectations.
With regard to the specific consultations on certain Uruguay Round agreements, details are
given below:WT/TPR/M/57
Page 26
Tariffs
Some delegations have mentioned the gap that exists between the tariff levels bound by
Bolivia and those applied, even suggesting that this may give rise to uncertainties.  In response,
Bolivia considers that the policy of openness that has been in effect for over a decade provides the
guarantees and predictability of its tariff policy and this openness will be further amplified.  Exportsfrom all countries without discrimination, benefit from the tariff levels applied, which are the outcome
of autonomous opening up.
In response to any concerns, Bolivia points out that it has bound tariffs for all products.
Valuation and Rules of Origin
The draft Customs Law currently awaiting parliamentary approval deals with application of
the Customs Valuation Agreement so Bolivia will soon meet its commitment in this respect.  It should
also be noted that, at the Andean level, rules have been adopted in the form of a decision, animplementing instrument and automatic legal effects.
The draft Law does not contain any provisions on origin regimes.
Intellectual Property
Certain concerns to which the reports have given rise need to be clarified, in particular:
- Bolivia's current legislation, both at the Andean Community and domestic levels,
largely covers the commitments undertaken  in the TRIPS Agreement with specific
rules for the various types of intellectual property;
- nevertheless, an Intellectual Property Code is being drawn up.  It will cover all these
areas and will have the added advantage of providing an overall perspective;
- regarding the operational aspects of application, a National Intellectual Property
Service (SENAPI) has been set up and is fully active.  The Industrial Property,
Copyright and Plant Breeders departments, accredited as the enquiry points for the
WTO, will continue to operate and will become part of the SENAPI;
- regarding the specific question concerning paragraphs 8 and 9 of Article 70 of the
TRIPS Agreement, Bolivia protects agricultural pharmaceutical and chemicalproducts through patents, pursuant to its obligations under Article 27 of the
Agreement.
In this connection, it must be emphasized that Bolivia is making great efforts to comply with
its commitments, which involve high social costs in eliminating the large number of informal
activities that are contrary to the principles of inte llectual property rights and are an almost inevitable
consequence of the significant levels of poverty.
It is extremely difficult to explain to a large sector of civil society, whose income depends on
such activities, that as a result of international negotiations, whose positive results may not be
perceived, they must give up or lose their source of income.
Government procurement
Bolivia is following with interest developments concerning agreements on government
procurement and is participating in regional negotiat ions on this subject, even though in the short term
it does not envisage participating in the Plurilateral Agreement on Government Procurement.WT/TPR/M/57
Page 27
Bolivia's legislation is currently being studied in the light of the latest developments in this
area.
ECONOMIC AND SOCIAL ENVIRONMENT
The Government of Bolivia's operational action programme has four pillars:  opportunity,
equity, establishing an institutional framework, and dignity.  Their main goals are to achieve greater
economic growth, reinforce macroeconomic stability, generate more jobs and higher incomes,
attenuate the poverty of Bolivia's urban and rural population, improve education, health and access to
housing and basic services, eliminate the drugs traffic in Bolivia, all within an institutional and
regulatory framework that guarantees the rights of economic and social actors.
I. OPPORTUNITY
(1) MONETARY AND CREDIT POLICY
The major objective of the Central Bank of Bolivia is to maintain the stability of Bolivia's
currency and it is the issuing authority responsible for carrying out monetary policies.  There has been
no change in its functions since 1995.
As can be noted, inflation has decreased in recent years, from 9.3% in 1993 to 4.4% in 1998.
This has been achieved through coordinated monetary and fiscal policies.  The financial system'saverage interest rate has also fallen in recent years.  This is a clear indication that the policy followed
by the Central Bank of Bolivia has not hampered the performance of the capital market.
In parallel, since the liberalization of the finance market, credit in all economic sectors,
especially the agricultural sector, is granted on market terms through the private financial system.
(2) C
USTOMS LEGISLATION AND PRACTICES (MINIMUM PRICES , CUSTOMS VALUATION )
In order to maintain economic stability and find the resources needed for social spending, it is
important to have an efficient and effective system of customs revenue collection within the
framework of an open economy.
The purpose of the draft Customs Law submitted to Congress in July this year is to facilitate
customs procedures and make them more transparent, diminish the discretionary authority of customsofficials, make them more professional and place their recruitment on a non-political basis.
Smuggling is deemed to be a criminal offence liab le to a term of imprisonment of up to six years.
In an economy as open as that of Bolivia, prices are fixed through free supply and demand.
There are no minimum prices for the import of new or second-hand automobiles, there are no quantity
or price controls on the import of alcoholic beverages.  This reply also applies to all agricultural
products.
II. INSTITUTIONAL FRAMEWORK
Two systems are responsible for regulation:  the Sectoral Regulation System (SIRESE) and
the Financial Regulation System (SIREFI).
(1) S
ECTORAL REGULATION SYSTEM (SIRESE)
Bolivia's Constitution does not allow any form of private monopoly.  In exceptional cases,
where public service concessions exist, they may not be granted for a period exceeding 40 years.  InWT/TPR/M/57
Page 28
addition, Bolivia has enacted Law No. 1600 creating the Sectoral Regulation System (SIRESE),
whose purpose is to regulate, monitor and supervise activities in the telecommunications, electricity,
hydrocarbons, transport, water and other sectors specified by the law.  Pursuant to Article 15, the
activities of these enterprises must obey principles that guarantee free competition and avoid any
action that impedes, restricts or distorts it.
Law No. 1600 does not allow enterprises to enter into anti-competitive agreements or use
abusive practices that are prejudicial to competitors, clients and consumers.  Mergers are also
prohibited if they establish, promote or reinforce a dominant position in any particular market.
As already mentioned, the Sectoral Regulation System is composed of the Superintendencies
of Telecommunications, Electricity, Hydrocarbons, Transport and Water.  It is administered by the
General Superintendency, which does not directly exercise regulatory functions or administrative
authority over the Sectoral Superintendency, but performs a series of tasks to sustain and strengthenthe SIRESE as a whole.  Its main functions are th e following:  to act as an appeal body against
decisions by the Sectoral Superintendencies, to verify the latter's management and regulatory
activities and to report on the efficiency and effectiveness with which they carry out their tasks.  It
also plays a coordinating role so as to ensure the consistency of the system.
To date, results have been mixed.  Some sectors have adopted the new system in an
impressive way – achieving the desired results in respect of the competitive supply of their products
and services – while others have not yet adjusted as expected.  Nevertheless, bearing in mind that the
learning period only started recently (SIRESE was created in 1994), it is hoped that all the sectors will
function as expected in the near future.
As a complement to the SIRESE, the Government of Bolivia, through the Ministry of Foreign
Trade and Investment, has drawn up a framework Competition Law for all Bolivia's production
sectors.  This Law will complete the regulatory framework needed to promote efficiency, competition
and consumer's rights in all sectors in Bolivia.
The rules governing competition in other sectors of economic activity are to be found in the
Commercial Code, the Investment La w and other relevant provisions.
The regulations of the Telecommunications Law provide for the preparation of a plan to open
up competition.  In order to achieve this, the Government, through the Ministry of Economic
Development, is carrying out a market survey and considering the regulations applicable to foreign
enterprises.  It is expected that this survey will be concluded around mid-2000.
Regarding the transport sector, it should be emphasized that the Government does not have
any holding in the capitalized national aviation ente rprise.  Fifty% of the shares in all capitalized
companies belong to Bolivian citizens over eighteen years of age on 31 December 1995.
(2) L
IBERALIZATION OF MARKETS
Concerning the hydrocarbons sector, Bolivia has not modified the contract to supply gas to
Brazil.  The discovery of large proven reserves of gas amply allow this contract to be respected, meet
internal demand and at the same time export the surpluses produced without restrictions.  In this
connection, a Supreme Decree has been issued to allow hydrocarbons producers to export 10% oftheir production without consulting the Approval s Committee of the Hydrocarbons Superintendency.
Following the transfer of the Bermejo refinery to the private sector, the Government no longer
has any holding in sugar production.  The sugar market is based on market trends and the Government
has not granted any type of assistance to this sector during the adaptation period.WT/TPR/M/57
Page 29
(3) FINANCIAL REGULATION SYSTEM (SIREFI)
The financial regulation system is composed of the Administrative Appeals Board, the
Superintendency of Banking and Financial Institutions and the Superintendency of Pensions,
Securities and Insurance, and its purpose is to mon itor, supervise and regulate financial intermediation
activities.
The Property and People's Credit Law maintains unchanged the functions of the Central Bank
of Bolivia as the sole monetary and exchange authority.  It also provides that the regulatory functions
of the financial intermediation system should be transferred to a joint body called the Committee of
Prudential and Financial Norms (CONFIP), composed of the President of the Central Bank, the
Superintendent of Pensions, Securities and Insurance, the Superintendent of Banking and Financial
Institutions, and the Vice-Minister of Financial Affairs of the Ministry of Finance.  The Committee is
responsible for approving prudential norms for the financial system and ensuring coordinationbetween the regulation of the financial intermediation market and the securities and insurance
markets.  CONFIP's work programme until the end of this year includes approval of rules on banking
secrecy and analysis of financial risk.
The Executive is drafting a Law on a Deposit Guarantee Fund, which amends important
chapters of the existing Law on Banks and Financial Institutions, especially as regards interventionand rehabilitation of financial institutions facing crises and the participation of international agencies
of foreign financial institutions and the cover of their operations by the Fund.  The main elements of
this draft Law are:
(i) To establish guarantees for deposits not exceeding US$10,000;
(ii) to define grounds for intervention in financial institutions in crisis situations;(iii) to improve procedures for dealing with the compulsory liquidation of companies;
and
(iv) to determine protection for the authorities carrying out intervention and liquidation
procedures.
It is expected that this Law will be approved during Parliament's current term.The Stock Market Law regulates public sale and intermediation of securities, stock markets,
stock brokers, fund managers and investment funds, securitization companies and securitization, risk
valuers, issuers, securities deposit institutions, and other stock market activities.  This Law also covers
the operation and competence of the Superintendency responsible for the control and regulation of the
stock market.  Its main objective is to regulate and promote an efficient, well-organized, integrated
and transparent stock market.
At present, the stock market only deals in fixed-interest bearing securities and short-term
securities.  It is hoped that the implementation of  the Law will lead to long-term capital investment
through the capital market, making it possible to attract financial resources at lower cost than that
currently prevailing on financial markets.
(4) O
THER MEASURES TO ESTABLISH AN INSTITUTIONAL FRAMEWORK
A draft Administrative Procedure Law has been drawn up in order to make administrative
procedures in various public authorities less bureaucratic and to lessen the discretional authority of
civil servants.  The Law is currently being discussed in Parliament and it is hoped that it will be
approved during the current term.WT/TPR/M/57
Page 30
III. EQUITY
The equity pillar is one of the focal points of the Government's operational action plan and its
objective is to achieve a substantial diminution of poverty levels by creating opportunities that will
lead to higher incomes in order to cover basic needs adequately.
For this purpose, policies to combat poverty focus on raising the human capital of the poor
sectors of the population, providing new income-earning opportunities and improving access to basic
services.
In raising the human capital among poor sectors of the population, priority has been given to
education and health.  In the area of education, reforms are being implemented to extend its coverage
and improve its quality through school curriculums, teacher training, distribution of scholastic
materials and extension and improvement of the infrastructure.  Action is also being taken to improve
administrative management with in a decentralized framework.
Health reform is being implemented with a special focus on primary health care, notably for
mothers and children.  The following are the components of the reform currently under way:  basic
health insurance, consisting of a package of services available to all the inhabitants of municipalities
that agree to join;  epidemiological cover in orde r to control and lessen the frequency of the major
transmissible diseases such as Chagas' disease, malaria and tuberculosis;  and family medicine,including health services within the family.
(1) N
ATIONAL FOOD SECURITY PLAN
The National Food Security Plan is one of the objectives defined under the equity pillar and is
part of the social spending component in Bolivia's overall budget.
The question of food security is a horizontal issue and involves the agricultural sector as well
as the health and education sectors inter alia .
In order to implement the objectives laid down in the equity pillar, the Government has given
special priority to providing basic services and extending access to production resources that will help
to improve the production capacity of the agricultural sector.
In order to provide a strategic framework for implementation of a food security support
programme in the agricultural sector, at the begi nning of the year the Government transferred the
planning and administration of the Food Security  Support Programme (PASA) to the Ministry of
Agriculture.  This Programme will help to make the best use of the various sub-programmes and
projects and coordinate its impact.
(2) SOCIAL POLICY - RELATIONS WITH THE WORLD BANK
The aim of the new framework for relations between Bolivia and the World Bank is to boost
social investment in Bolivia using the Bank's resources through an integrated programme thatconcentrates all the resources previously allocated to separate projects.  Bolivia thus has a single
programme with the World Bank that will allow implementation of the plans to combat poverty
proposed in the 1997-2002 operational action plan.  The progamme to combat poverty in Bolivia is an
integral part of the Government's Programme, which is based on the four pillars that are the basic
component of our commitment to tackle poverty.
The resources for this programme are those identified by the World Bank for Bolivia in its
regular programme budget.WT/TPR/M/57
Page 31
(3) LABOUR ISSUES
The Singapore Declaration clearly states that the International Labour Organization is the
competent body to set and deal with the standards.
IV. DIGNITY
Bolivia recognizes the need to destroy surplu s crops and to eliminate the opprobrium attached
to Bolivia, achieving the goals set and respecting the human rights of the people.  In carrying out this
task, no subsidies are being given for destroying the crops and controls are effected using aerial
photographic survey, as well as intervention by the police.
The success in destroying coca production is due essentially to the crop substitution policy,
through consultation and alternative development, to gether with the legal system that prohibits coca
growing in "non-traditional" areas.  Coca leaf crops are being replaced by plantations of tropical
products such as bananas, pineapples and palms.  The success and long-term sustainability ofalternative development will depend to a large extent on adequate access to international markets.
TRADE POLICY
I. EXPORT POLICY
Under the integration agreements signed by Bolivia and the unilateral preferences granted by
developed countries under the Generalized System of Preferences (GSP), around 50% of Bolivian
exports enjoy preferences.
The remaining 50% enter international markets under tariff exemptions due to the
most-favoured-nation clause or are subject to the prevailing tariff.
Since the 1970s, Bolivia has defined exports of products that are neither minerals nor
hydrocarbons as "non-traditional exports".  In other words, they can be considered as "other exports"
as they represent under 10% of the total value of exports.   In terms of the SITC, it can be stated that
"traditional" exports are those of the mining and quarrying industry and "non-traditional exports" are
agricultural exports and manufactures.
In the 1990s, "non-traditional" products ceased to be a minority and accounted for over 50%
of total exports.  This is why the Government of Bolivia decided to classify its exports by group of
product according to the SITC (revision 3) and the following is the breakdown by sector:
• Agricultural products (39.2%)
• Mining and quarrying industry (47.5%)
• Manufactures (13.4%)
The SITC (revision 3) is also used to show th e link between the growth rate in the various
sectors and the growth in GDP.
The change of model in 1985 was decisive for the development of exports of agricultural
products and manufactures.  In 1985, these products only accounted for 5.1% of total exports whereas
exports of the mining and quarrying industry (minerals, fuel and metals) accounted for 94.9%.
The new model provided an appropriate framework for investment in agricultural production
and manufacturing and up until 1990 achieved sustained rates of growth.  In 1990, exports ofWT/TPR/M/57
Page 32
agricultural products accounted for 26.6% and manufactures 4.8%, giving a total of 31.4%, which is a
large increase compared with 1985.
The high rate of growth of Bolivia's agricultural exports is due to a number of factors that
have created a high level of competitiveness in areas of production.  These include the development of
the basic infrastructure, investment with the introduction of technological innovations, amacroeconomic stability policy and a neutral tax basis for exports, the opening of major markets, all
based on high productivity on the land.
Although the increase in exports of agricultural products also applies to commodities, it
should be pointed out that the raw materials component of agricultural products only accounted for
29% in 1990 and in 1998 this figure had fallen to 16%.
In the case of manufactures, the increase started to be perceived in 1992 when their share rose
to 8.7%.  In 1998, the figure was 13.4%, and even though this is a modest figure it denotes a morerapid growth trend than in other sectors.
The trend in Bolivian exports has therefore been a gradual change in their structure
since 1985, in a first stage moving from almost total reliance on exports of the mining and quarrying
industry to a more diversified structure in which the agricultural sector became increasingly
important.  In the second stage, exports of manufactures started to play a greater role in the overallstructure as a result of the industrialization of agricultural products, the industrialization of the timber
industry, clothing and cotton, and the industrialization of the gold industry through the jewellery
trade.
The development of exports is a long-term process which it is the Government's role to
accelerate through an efficient set of regulations and an appropriate infrastructure.
Other countries possibly consider that investment flows towards Bolivia are mainly for the
mining and quarrying and hydrocarbons industries.  Bolivia has large reserves of natural resources
and both the mining and quarrying industry and hydroc arbons will continue to play an important role
in its exports.  The aim of the export development policy is more rapid growth in manufactures and
agricultural products than in the mining and quarrying industry.
As mentioned above, Bolivia's export development policy (growth and diversification) is
based on the principle of a neutral tax basis and promoting this activity by facilitating trade and
boosting exports.
By facilitation of trade, we mean all the progress made to simplify procedures for exports,
reducing both the time and the cost for exporters.  This is done through the Single Export Window
System (SIVEX).
Another important factor in boosting exports is institutional development that promotes
various branches of production, bearing in mind their specificity, for example, technical and health
regulations that help to ensure the openness of markets.
The improvement and construction of the basic infrastructure, highways, river, maritime and
air transport currently under way in Bolivia is an  element of vital importance for the growth and
diversification of exports.
The Promotion Centre of Bolivia (CEPROBOL) is  responsible for promoting exports.  It is a
decentralized body which directly assists individual enterprises by supplying trade information and
support for participation in fairs, negotiations and trade missions, and for the transfer of technology
and training at managerial level.WT/TPR/M/57
Page 33
Following the fall in prices which has affected export growth, resulting in lower export
values, the Government is stepping up its export promotion activities so as to offset the effects of the
slow down in international trade.
II. IMPORT TAXES AND STANDARDS.  CONSUMPTION TAXES
The 0.5% storage charge previously imposed was abolished when the Autonomous Customs
Warehouse Authority ( AADAA) was replaced following  privatization of its services.  The private
companies that now supply the services, warehousing and handling, charge a fee whose ceiling is set
by the Ministry of Finance.
Bolivia requires inspection of goods prior to import.  The fees charged by the companies
inspecting foreign trade correspond to the cost of the services they supply and are fixed in accordance
with Article VIII.1(a) of the GATT 1994.  These companies are contracted periodically following an
international public tender.  As the State has no part in collecting this revenue, it is not deemed to be afiscal levy or tax.
Insurance is an optional cost which importers can decide to pay or not in order to ensure that
their goods arrive safely.
Freight costs are fixed by private companies that supply transport services through direct
negotiations with the importers.
The standards applied by Bolivia to the import of goods are based on international standards
and 10% are identical to these.
The tariffs applied to vehicles under heading HS 8703, products under heading HS 4011 and
chapter 41 are 10%, the bound levels for these products are 40%.
All standards are voluntary, approved by consensus by the Bolivian Institute of
Standardization and Quality (IBNORCA), which is the national standardization body.  The State is
responsible for making them into compulsory technical regulations through laws, supreme decrees
and other legal provisions.
Some technical regulations issued by Government authorities are not based on technical
standards but are compulsory.  This applies particularly to medicines, foodstuffs, agriculturalproducts, hydrocarbons and the environment.
Regional standards are drawn up by the Panamerican Standards Commission (COPANT), of
which IBNORCA is a full member.
All the bodies responsible for compliance wi th technical regulations draw up their own
administrative procedures.
Bolivia has regulations on labelling, marking a nd packaging of foodstuffs.  It is currently
examining the regulations with a view to defining  national standards for internationally traded food
products based on the Codex Alimentarius.
The Ministry of Agriculture, Livestock and Rural Development has the following
responsibilities:  to prepare, implement and monitor policies and standards to promote the
development of agriculture and livestock, as well as the management of renewable natural resources
in the context of overall exploitation;  to promote research and transfer of technology in order toincrease production and productivity;  to draw up policies and regulations for rural areas and promote
related development projects.WT/TPR/M/57
Page 34
The Executive is drafting a Law to regulate the institutional structure and technical aspects of
the application of agricultural and livestock health measures.  The Bolivian authorities are also
looking into the creation of a national agricultural and livestock health service with responsibility for
planning, managing, monitoring and certifying agricultural and livestock health, under the Ministry of
Agriculture, Livestock and Rural Development.  The possibility of delegating a series ofadministrative and monitoring tasks to the departmental agricultural and livestock services in the
prefectures is being reviewed in order to coordinate activities properly.
The prefectures represent the Executive in Bolivia's departments and deal with regional
affairs in accordance with the regulations issued by the relevant authorities.  Prefectures in the
departments do not have any authority to establish technical or health requirements for imported
products.  Their role is to take the necessary administrative and logistical measures to comply with,
and ensure compliance with, the regulations issued by the Executive in this and other areas.  Anyinstruction from a prefecture that is not strictly in conformity with the regulations issued by the
Executive can be challenged as unconstitutional.
A universal tax structure is laid down in the relevant regulations in Bolivia.  It replaces the
consumption taxes, although some hand-made products belonging to Bolivia's cultural tradition
receive special treatment because they cannot be included in the overall regime regulated under thelaw.  This is the case for "Chicha de Maíz", which is a maize-based beverage from the Cochabamba
region and is produced in provinces in the valleys of the Cochabamba department, for example,
Punata, Tarata y Cliza.  It is an alcoholic beve rage and is widely consumed in the aforementioned
zones, but it does not compete with other national or imported alcoholic beverages and cannot be
exported outside the region to the domestic market because it is produced on a very rudimentary andsmall scale that makes it impossible to package a nd maintain properly for consumption within a
specified period after production.
Because of the way it is produced and cultural fa ctors, the consumption of "Chicha de Maíz"
is subject to a special tax which is collected and administered by the municipality in each locality
where it is produced.
III. SERVICES AND INVESTMENT
Article 2 of the Investment Law (Law N o. 1182 of 17 September 1990) provides the
following:  "Foreign investors and the businesses or companies in which they participate shall have
the same rights, duties and guarantees granted by the laws and regulations to national investors
without any limitation other than those laid down in the Law".
Article 9 states that "Freedom of production and the marketing of goods and services, as well
as free fixing of prices, shall be guaranteed, with the exception of those goods and services whoseproduction and marketing are prohibited by law".
Article 25 of Bolivia's Political Constitution lays down limitations on the activities of foreign
citizens in Bolivia:  "Foreign citizens may not acquire nor own, in any capacity whatsoever, the soil or
subsoil, directly or indirectly, either individually or in partnership, within fifty kilometres of the
border, on penalty of forfeiting the property acquired to the benefit of the State, except in cases ofnational necessity specified in a special law".
The Law on Brokers for Exports of Energy,  Hydrocarbons and Telecommunications of
National Necessity (Law No. 1961 of 23 March 1999) implements Article 25 of Bolivia's Political
Constitution and authorizes foreign persons and compan ies to own areas within fifty kilometres of the
border in specific areas defined in the law for the purpose of transport and marketing of hydrocarbonsand by products, electricity and telecommunications services.WT/TPR/M/57
Page 35
ANNEX II
RESPONSES BY BOLIVIA TO SPECIFIC QUESTIONS
HONG KONG, CHINA
(WT/TPR/S/57)
Import levies and charges  (p. 31, para. 19)
We noted that there is a wide gap between Bolivia's bound rates and applied rates.  Bolivia has bound
its tariff lines at a uniform ad valorem ceiling rate of 40%, except for 16 items (mostly capital goods
in HS Chapter 84) which are bound at 30%, while the tariff rates are applied at 10%.  Does Bolivia
have any plans to reduce the gap in future so as to provide more certainty to its tariff regime?
Bolivia considers that the policy of openness that has been in effect for over a decade
provides the guarantees and predictability of its tariff policy and this openness will gradually be
further amplified.  The possibility of bridging the gap between bound rates and applied rates will beconsidered in the light of the outcome of the forthcoming negotiations in relation to Bolivia's
priorities.
Standards, testing and certification  (p. 35, para. 38)
It is mentioned that imports are not required to  comply with "Bolivian norms" unless a specific
technical regulation applies.  We are interested to know whether the norms referred to are "voluntaryBolivian Technical Standards".  It is also mentioned that 10% of the domestic "norms" are identical
to international standards.  Is there a corresponding percentage figure for the mandatory technical
regulations?
All Bolivian technical standards are voluntary, as laid down in the Agreement on Technical
Barriers to Trade (the TBT of the WTO).
Competition policy and regulatory issues  (pp. 40-41, paras. 82-86)
We are interested to know more about Bolivia's competition policy.  For instance, does the Bolivian
Government have an over-arching framework to guide  the development of its competition policy?
What kind of measures are in place to address anti-competitive practices in sectors other than the five
already regulated by the SIRESE?
Law No. 1600 regulates the transport, electricity, hydrocarbons, telecommunications and
water sectors.  The rules governing competition in other economic sectors are to be found in the
Commercial Code, the Investment La w and other relevant provisions.
Services:  MFN exemptions  (p. 63, para. 67;  p. 72, para. 114)
We noted that MFN exemptions are maintained in motion picture and videotape production, road
transportation of passengers and freight, maritime and multi-modal freight transportation.  Would
Bolivia consider terminating those MFN exem ptions and opening these sectors to other WTO
Members?
Unlike other Members of the WTO, Bolivia is implementing a broad policy of openness and
has adopted unilateral measures.  It is not, however, prepared to pursue this policy if it does not
encounter similar positions that meet its expectations.WT/TPR/M/57
Page 36
Financial services  (p. 68, para. 91)
On insurance services, it is mentioned that Boli via's existing legislation offers considerably more
liberal treatment to foreign insurance providers than that bound under the GATS.  Would Bolivia
consider making further commitments under the GATS in the near future to reflect its existing regime?
Foreign suppliers of insurance services already benefit from Bolivia's unilateral liberalization
without any discrimination.  Nevertheless, this treatment might be bound within the WTO depending
on the results of the forthcoming negotiations.
Telecommunications services  (p. 69, paras. 96-97;  p. 70, para. 100)
We are pleased to note that the market for local telecom services will be fully open to competition by
November 2001.  Foreign ownership in telecom companies will be allowed up to 100%.  The
exclusivity of ENTEL providing the infrastructure, long-distance and international services will also
expire in 2001.  We would like to know when the Bolivian Government will announce the details onhow foreign service suppliers may participate in the Bolivian telecom market.
Paragraphs 51 and 52 of Article 11 of the Regulations of the Telecommunications Law
provide for the elaboration of a plan to introduce competition.  For this purpose, the Government,
through the Ministry of Economic Development, is carrying out a market survey and considering the
regulations applicable to foreign enterprises. It is expected that this survey will be completed aroundmid-2000.
Transportation services  (p. 72, para. 113)
It is noted that since the last Trade Policy Review of Bolivia, the differential charges of rail freight
between imports and exports/domestic products still ex ist.  It is further noted that the authorities
concerned have indicated that the current method to calculate rail ceiling rates might still beperceived as inconsistent with the GATT and still results in a substantial gap between rail charges on
out-bound and in-bound goods.  We would like to know whether Bolivia has any plan to remove the
differential charges and hence address the concerns about GATT-consistency.
Bolivia did not undertake any commitments on rail transport because this sector does not
appear in the Schedules of Concessions referred to in Article XVII of the GATS.  Consequently, anytariff discrimination would not be inconsistent with the requirements of the GATS.
In the past, rail transport services were supplied by the State, but they have been transferred to
private companies as part of the capitalization process.
JAPAN
Preferential agreements
The Andean Community was established in June 1997 (para. 25, p. 23 of the Secretariat Report).  The
Community, removing duties and other barriers for in ternal trade, and adopting a CET, seems to fall
into customs union provided for in Article XXIV:8(a ) of the GATT.  Is the establishment of the Andean
Community notified to the WTO?  If not, please explain the reason.
The Andean Community was established on the basis of the integration process already begun
by the Andean Group, under which a free-trade zone was set up in 1991, and in 1993 it was decided to
adopt a Common External Tariff, which came into effect in 1995.  The customs union was notified tothe WTO at that time.WT/TPR/M/57
Page 37
The title "Andean Community" marks the beginning of a new stage in the integration process
with the aim of going beyond economic and trade aspects to encompass the political, social and
cultural aspects of integration.  It is the expression of the political will to build a true community of
nations.  The establishment of the Andean Community as such was not notified to the WTO because
the letter and spirit of the trade provisions agreed by the Andean Group had already been notified inaccordance with the enabling clause and had not changed.
It is reported that, since 1993, duties and other barriers to Andean internal trade have been partly
removed and the Andean Community has adopted, with exceptions, a CET, but that the resulting
customs union is incomplete (para. 27, p. 23).  The Report notes in particular that the CET is applied
only by Colombia, Ecuador and Venezuela, and that Boli via has been exempted from implementing it.
- When are the remaining duties and other barrier to Andean internal trade scheduled to be
removed?
The Andean Community does not have any tariffs or other barriers that hinder or limit trade
within the sub-region.  Since 1991, no exemptions have been allowed in the free-trade zone and all
products are included.
- Why does Bolivia not apply the CET of the Andean Community?
Since 1991, the Andean Community has had a fully operational free-trade zone, providing a
framework within which the member countries carry on trade free of tariffs or other barriers in all
products without any exemptions.  This enlarged market has been protected by a Common External
Tariff since 1995.
Bolivia has therefore completely liberalized its market for its Andean partners.  Bolivia
receives special treatment under the Common External Tariff because its land-locked situation meanshigher foreign trade costs and this might be cons idered an implicit tariff.  Recognizing this, the
member countries of the Andean Community have allowed Bolivia to maintain tariff levels that are 10
and 5% lower and these are included in the Andean Common External Tariff.  Bolivia therefore does
not have any authority to change its tariffs;  any ch ange in the levels indicated has to be authorized by
the competent bodies of the Andean Community.
Another element of this special treatment is that Bolivia is not obliged to apply the price band,
the mechanism used by other Andean countries to st abilize import prices for certain agricultural and
agroindustrial products.
- When does Bolivia intend to introduce the CET of the Andean Community?
As already indicated, Bolivia applies the Andean Community's CET in the context of special
treatment that allows it to impose tariffs that are lower by 5 and 10% and it also has its domestic tariff.
Currently, the relevant bodies of the Community are discussing and reviewing the possibility oflowering tariff levels, which will facilitate harmonization with Bolivia's levels.
Regarding the agreement between Bolivia and MERCOSUR , it is reported that "Different groups of
sensitive products are subject to specific schedules:  they will reach a zero tariff level within 15 to
18 years".  Please list the products which are subject to "specific schedules" (para. 31, p. 24).
The Economic Complementarity Agreement (ACE) 36 between Bo livia and MERCOSUR
establishes a free-trade zone within a period of ten years, with exemptions for sensitive products on
both sides and these will be reduced over 15 years.  Annex 6 lists the following products that are
deemed "ultra sensitive" only for Bolivia and their tariffs will be reduced over a period of 18 years:WT/TPR/M/57
Page 38
NALADI/HS Product
1201.00.90 Other, soya beans
1206.00.90 Other, sunflower seeds
1207.20.90 Other, cotton seeds
1208.10.00 Flour of soya beans
1208.90.10 Flour of sunflower seeds
1507.10.00 Crude oil, of soya beans
1507.90.00 Other (refined oil, of soya beans)
1508.10.00 Crude oil, of groundnuts
1508.90.00 Other (refined oil, of groundnuts)
1511.10.00 Crude oil, of palm (Paraguay receives a 100% preference)
1511.90.00 Other (refined oil, of palm)
1512.11.10 Crude oil, of sunflower seeds (Paraguay receives a 100% preference)
1512.19.10 Other, of sunflower seeds (refined oil)
1513.29.10 Other, of palm kernels (refined oil)
1514.10.90 Other, (crude oil, of rape, colza)
1514.90.90 Other (refined oil of rape, colza)
1515.21.00 Crude oil, of maize
1515.29.00 Other (refined maize oil)
1515.90.99 Other (refined oils)
1516.20.19 Other, vegetable fats and oils, but not waxes
1517.10.00 Margarine, excluding liquid margarine
1517.90.90 Other food mixtures or preparations (Paraguay receives a 100% preference for some mixtures)
1701.11.00 Raw sugar not containing added flavouring or colouring matter, of cane
1701.91.00 Other, containing added flavouring or colouring matter
1701.99.00 Other
2304.00.00 Oilcake of soya beans
2306.10.00 Oilcake of cotton seeds
2306.30.00 Oilcake of sunflower seeds
Customs valuation  (paras. 8-9, p. 28)
Bolivia has delayed the application of the Custom s Valuation Agreement.  The Secretariat Report
states that the Bolivian authorities have indicated that they plan to implement the Agreement by
September 2000.  Does this mean that Bolivia fully implements the Ag reement from the date when five
years have passed from the date when Bolivia became a Member of the WTO, which was
14 September 1995?
The draft Law submitted to Congress in July this year defines the guidelines for customs
valuation and is consistent with the WTO's Customs Valuation Agreement.
The Report also states that minimum import pr ices are used for the valuation of second-hand
imported cars.  Does Bolivia intend to elimin ate the minimum import prices by September 2000?
Bolivia does not apply minimum prices for the import of new or second-hand automobiles.
Tariffs  (para. 19, p. 31)
Some of the tariff lines, such as for passenger motor vehicles (HS8703), tyres (HS4011) and raw hides
or skins and leather (HS Chapter 41), remained unbound.  Please explain the reason for not binding
those tariff lines.WT/TPR/M/57
Page 39
Please also provide information on the applied tariff rates on passenger motor vehicles (HS8703).
When acceding to the GATT, Bolivia bound its tariffs at uniform levels of 40 and 30%, with
the exception of a limited list that was suspended while awaiting the application of the Andean
Group's CET.  As a contribution to the Uruguay Round of multilateral trade negotiations, Bolivia
included this list in its bound tariff so there are no products that still have to be bound.
Bolivia is preparing a new Customs Law that will have to be approved by the Congress of the
Republic.  This Law will outline the steps to be taken to comply with Bolivia's international
commitments.
SPS (para. 41, p. 35)
It is stated that, "To date this authority has notified no measures to the WTO".  Please explain the
reason.
The technical requirements applicable to foreign trade are based on the need to protect the
health of Bolivia's population and of its plant and animal species.  All the regulations applied for this
purpose are drawn up by the Pan American Standards Commission.
Competition  (para. 82, p. 40)
The Secretariat Report states that Bolivia has established a framework of competition provisions at
the sectoral level and that the Sectoral Regulation System (SIRESE) created by law No. 1600 of 28October 1994, regulates, monitors and supervises the activities of enterprises in five sectors:
telecommunications, electricity, hydrocarbons, transports, and water.
- Does Bolivia have any plan or intention to establish a general competition law which applies
to all sectors?
The rules governing competition in other sectors not covered by the SIRESE Law are to be
found in the Commercial Code, the Investment Law and other relevant provisions.  Bolivia is also
considering draft regulations  in the form of rules on competition and good practice.
- Can Bolivia provide the content of the law No. 1600 of 28 October 1994?
The Sectoral Regulation System (SIRESE), Law No. 1600 of October 1994, is composed of
the Superintendencies of Telecommunications, Electr icity, Hydrocarbons, Transport and Water.  It is
administered by the General Superintendency, which does not directly exercise regulatory functions
or administrative authority over the Sectoral Superintendencies, but performs a series of tasks to
sustain and strengthen the SIRESE as a whole.  Its main functions are the following:  to act as an
appeal body against decisions by the Sectoral Superintendencies, to verify the latter's management
and regulatory activities, and to report on the efficiency and effectiveness with which they carry out
their tasks.  It also plays a coordinating role so as to ensure the consistency of the system.
- Can Bolivia outline the structure of the Sectoral Regulation System (SIRESE)?
Photocopy (SIRESE chart):WT/TPR/M/57
Page 40
Services  (para. 102, p. 70)
In air transport services, the Report states that Bolivia has taken steps to encourage private
participation and decrease the State's traditional role in the sector.  Can Bolivia provide information
on the stock share owned by the Government for the air transport operators?
The Government does not have any holding in the capitalized national aviation enterprise.
Fifty per cent of the capitalized shares belong to a private consortium, the other 50% of the shares
belong to Bolivian citizens over 18 years of age on 31 December 1995.
EUROPEAN UNION
Regional and bilateral agreements
The EU has noted the importance of regional and b ilateral agreements which are described as "core
elements" of Bolivia's trade policy in the Secretariat Report.
No reply required.
We have also noted the significant developments  within the Andean Community over recent years,
particularly as regards institutional evolution.  The Secretariat Report indicates that duties and other
internal barriers to trade have been "partly removed" and a common external tariff has been adoptedELECTRICITY
SUPERINTENDENCYWATER
SUPERINTENDENCY
GENERAL
SUPERINTENDENCY OF
SIRESE
TRANSPORT
SUPERINTENDENCYTELECOMMUNICATIONS
SUPERINTENDENCY
HYDROCARBONS
SUPERINTENDENCYWT/TPR/M/57
Page 41
"with exceptions".  Also, Bolivia does not join other members of the Andean Community in applying
the common external tariff.  As the Secretariat not es, this makes the customs union incomplete.  Can
Bolivia please provide information on the duties and barriers to internal trade, which still remain; on
the exceptions from the common external tariff; and on steps planned to complete the customs union,
by its also applying the common external tariff?
Since 1991, the Andean Community has had a fully operational free-trade zone, providing a
framework within which the Member countries carry on trade free of tariffs or other barriers in all
products without any exemptions.  This enlarged market has been protected by a Common External
Tariff since 1995.
Bolivia has therefore completely liberalized its market for its Andean partners.  Bolivia
receives special treatment under the Common External Tariff because its land-locked situation means
higher foreign trade costs and this might be cons idered an implicit tariff.  Recognizing this, the
Member countries of the Andean Community have allo wed Bolivia to maintain tariff barriers that are
10 and 5% lower and these are included in the Andean Common External Tariff.  Bolivia therefore
does not have any authority to change its tariffs;   any change in the levels indicated has to be
authorized by the competent bodies of the Andean Community.
Another element of this special treatment is that Bolivia is not obliged to apply the price band,
the mechanism used by other Andean countries to st abilize import prices for certain agricultural and
agro-industrial products.
The Secretariat Report also notes that Bolivia has in recent years concluded new agreements with
Mexico, MERCOSUR, Chile and Cuba.  It appears that  none of these agreements have been notified
to the WTO. Does Bolivia propose to do so?
Regarding notification of Bolivia's agreements with Mexico, Chile, MERCOSUR and Cuba,
these were concluded within the framework of the LAIA as Partial Scope Agreements.  The Latin
American Integration Association, which was notified under the enabling clause, is responsible for
notifying the conclusion of agreements reached within its framework.  Pursuant to paragraph 4(a) of
the clause, LAIA made the relevant notifications biannually.  It notified the agreements withMERCOSUR and Cuba in a report of 26 June 1997.  The other two agreements had already been
notified before this.
The agreement with MERCOSUR is described as hav ing the objective of creating a free-trade area
within ten years.  But the schedule for progressive tariff reductions is reported to last for up to
18 years.  This seems inconsistent.  The agreement is also said to cover "most" tariff lines - what does
"most" mean in this context?
The Economic Complementarity Agreement (ACE) 36 between Boliv ia and MERCOSUR,
within the framework of the LAIA, includes an obligation on the gradual establishment of a free-trade
area, encompassing tariffs, within a period of ten years, in the form of specific tariff reductions.  The
tariffs on a limited number of products will only be fully liberalized over a longer period, from 15 to
18 years, to meet the concerns of industries on both sides.  In any event, the Agreement will not allow
any exemptions after 18 years.
The EU would also be grateful for clarificati on on how negotiations for a Bolivia/MERCOSUR free-
trade area fit with negotiations for an FTA be tween the Andean Community and MERCOSUR, when
Bolivia is a member of the Andean Community.
As already mentioned, Bolivia is a full member of the Andean Community and has been an
associate member of MERCOSUR since signing the aforementioned Economic Complementarity
Agreement, consequently it is bound under both these integration schemes to liberalize trade in goods.WT/TPR/M/57
Page 42
The other Andean and MERCOSUR countries have bilateral agreements within the
framework of the LAIA which they are ready to put on a multilateral basis following negotiations
between the two blocs.  A framework agreement wa s signed for this purpose in April 1998 and its
major objective is to promote the establishment of a free-trade zone between the two schemes on the
basis of the agreement on multilateral preferences currently being negotiated.
Bolivia has signed this framework agreement, which includes a special article regarding its
situation, and once the terms of the free-trade zone between the two blocs have been negotiated, the
convergence of Economic Complementarity Agreement 36 and the new agreement will begin.
Bolivia is therefore participating in the negotiations taking place.
Bolivia attaches special importance to South American integration so it has fully supported
the convergence between the Andean Community and MERCOSUR, not only at the economic level
but also in the political and cultural spheres.
The agreement with Mexico covers trade in services as well as goods, with the objective of removal of
all barriers to trade.  We would encourage Bolivia to notify the services aspects under relevant
provision of Article V of the GATS.
It has been suggested that Bolivia should notify the services section of its agreement with
Mexico in accordance with Article V of the GATS.  As already indicated above, LAIA is responsiblefor doing this.
Government procurement
Bolivia is not a member of the GPA.  It would be desirable if Bolivia joined the GPA and further
opened up its procurement market.
Bolivia is following with interest developments concerning agreements on government
procurement and is participating in regional negotiat ions on this subject, even though in the short term
it does not envisage participating in the Plurilateral Agreement on Government Procurement.
The EU would welcome the developm ent of Bolivia’s domestic legislation and procurement practices
to ensure and improve th e following elements:
- tendering as the main method of procurement (open, selective and limited);
- the principle of non-discrimination between potential suppliers and service providers;
- the mechanism to enable suppliers and potential suppliers to challenge alleged breaches of
tendering procedures.
At the same time, the EU would like to have more  details about the domestic review procedures and
the mechanisms to settle the conflicts between the contracting authorities and firms.
Finally, we would like to draw the attention of Bolivia to the fact that it could ask for the status of
observer to the GPA and commit itself to joining th e Agreement, including a timetable for doing so.
Bolivia's legislation is currently being studied in the light of the latest developments in this
area.
Customs valuation/rules of origin
The Secretariat Report notes (p. 27) that some import measures may change with the introduction of
the customs law currently under preparation.  The EU would be interested to know what will be the
key changes brought about by this law, in particular:WT/TPR/M/57
Page 43
- Will it bring Bolivia into conformity with the Agreement on Customs Valuation?
- Will it introduce non-preferential rules of origin?
The draft Customs Law currently awaiting parliamentary approval deals with application of
the Customs Valuation Agreement and will allow Boliv ia to meet its commitmen t in this respect.  It
should also be noted that, at the Andean level, rules have been adopted in the form of a decision, animplementing instrument and automatic legal effects.  The draft Law does not contain any provisions
on rules of origin.
Import levies and charges  (p. 29 and Table III.2 of the Secretariat Report)
Could Bolivia explain in what way the ad valorem charges such as warehousing (0.5%), inspection
fees (1.92%), freight (5%) and insurance (2%) are in compliance with Article VIII, which provides
that other duties and charges should reflect the cost of services rendered?
Storage :  The 0.5% storage charge was abolished when the Autonomous Customs Warehouse
Authority (AADAA) was replaced following privatization of its services.  The private companies that
now supply the services charge a fee whose ceiling is set by the Ministry of Finance.
Prior inspection :  The fees charged by the companies inspecting foreign trade correspond to
the cost of the services they supply and are fixed in accordance with Article VIII.1(a) of the
GATT 1994.  These companies are contracted periodically following an international public tender.As the State has no part in collecting this revenue, it is not deemed to be a fiscal levy or tax.
Insurance :  Insurance is an optional cost which importers can decide to pay or not in order to
ensure that their goods arrive safely.
Freight :  Freight costs are fixed by private companies that supply transport services through
direct negotiations with the importers.
Technical requirements
In relation to para. 33 (p. 34 of the Secretariat Report) could Bolivia elaborate a little bit on the
concepts of "compulsory regulations" (Is it the same as "technical regulations"?  Could some
technical regulations in Bolivia be voluntary?) and "regional standards" (Does this mean elaborated
by the Pan-American Standards Commission?)?
"Compulsory regulations":  Bolivia's technical regulations are based on standards that are
voluntary and regulations that are compulsory;  8% of the regulations are based on international
standards.
"Regional standards":  Regional standards are drawn up by the Pan American Standards
Commission.
In relation to para. 37 it is mentioned that certain imports are subject to specific technical
requirements (certification, compliance with norms). Are these requirements specified in technicalregulations or in administrative procedures? On which standards (national, regional, international)
are these requirements based?
Bolivia is currently revising its standards a nd regulations to bring them into line with
international standards.WT/TPR/M/57
Page 44
"Brazil nuts"/aflatoxins (para. 23, p. 52 of the Secretariat Report)
This paragraph of the Secretariat report reflects only the position of the Brazilian authorities in this
affair, not that of the EU.
First of all, it is said that the EU has introduced a regulation that sharply reduced the level of a toxin
present in Brazil nuts.  This is not correct, since the regulation established a single level for the wholeEU, but the main EU importers were already applying standards as strict as those resulting from the
harmonization exercise.  Moreover, nothing was heard from Bolivia during the normal consultation
phase provided under the draft SPS measure notification procedure.
At meetings in October 1998, the European Commission explained that it was not possible to
discriminate in favour of the Brazil nut by delaying the application of the Commission regulation for
this product, since that would amount to establishi ng different levels of protection for the same risk
and would be contrary to the spirit and the letter of the WTO agreements.
On the other hand, the Commission informed Bolivia that it would respond favourably to a request for
cooperation in controlling nuts for export.
At the end of 1998 and in 1999, several meetings were held at the Commission, with the participation
of the Bolivian Embassy in Brussels, to deal wi th this question.  The Commission reiterated its
willingness to collaborate, but so far we have not received any official request from the government.
Finally, the Commission has written to Bolivia, via th e Embassy in Brussels, asking what was its final
position on the Community regulation in question, but has not yet received a reply.
We would like to take the opportunity provided by this exercise to invite Bolivia to resume contact
with us on this point.
UNITED STATES
Tariffs
In light of Bolivia’s associate membership in MERCOSUR, please clarify Bolivia’s role in the current
trade negotiations between the Andean Community and the countries of MERCOSUR.
Bolivia is a full member of the Andean Community and has been an associate member of
MERCOSUR since signing the Economic Complement arity Agreement, consequently it is bound
under both these integration schemes to liberalize trade in goods.
The other Andean and MERCOSUR countries have bilateral agreements within the
framework of the LAIA which they are ready to put on a multilateral basis following negotiations
between the two blocs.  A framework agreement wa s signed for this purpose in April 1998 and its
major objective is to promote the establishment of a free-trade zone between the two schemes on the
basis of the agreement on multilateral preferences currently being negotiated.
Bolivia has signed this framework agreement, which includes a special article regarding its
situation, and once the terms of the free-trade zone between the two blocs have been negotiated, the
convergence of Economic Complementarity Agreement 36 and the new agreement will begin.
Bolivia is therefore participating in the negotiations taking place.
Bolivia attaches special importance to South American integration so it has fully supported
the convergence between the Andean Community and MERCOSUR, not only at the economic level
but also in the political and cultural spheres.WT/TPR/M/57
Page 45
What is the Bolivian Government’s policy toward future foreign trade zones, beyond the one still
operating?
Bolivia's policy of openness allows it to participate in the creation of other free-trade zones.
It is currently playing an active role in the negotiations on setting up the Free-Trade Area of the
Americas (FTAA).  In each case, its decision will be adopted in the light of the trade and investmentopportunities afforded by the area.
Intellectual property
What steps is the Government of Bolivia taking to come into compliance with the TRIPS agreement by
January 1, 2000?  Bolivia has not yet completed drafting its new IPR law, which had been scheduled
to be submitted to Congress in early 1999.  When does Bolivia expect to complete this legislation?
What is the Government of Bolivia doing to impro ve enforcement of its intellectual property laws?
Bolivia has had problems in enforcing existing IPR laws.  Although Bolivia has issued a decree
creating the National Service for Intellectual Property (SENAPI), the body responsible for enforcing
IPR, we understand that SENAPI is not yet operationally effective.  When will it become so and when
will Bolivia appoint a  Director of SENAPI?
Certain concerns to which the reports have given rise need to be clarified, in particular:
- Bolivia's current legislation, both at the Andean Community and domestic levels,
largely covers the commitments undertaken  in the TRIPS Agreement with specific
rules for the various types of intellectual property;
- nevertheless, an Intellectual Property Code is being drawn up.  It will cover all these
areas and will have the added advantage of providing an overall perspective;
- regarding the operational aspects of application, a National Intellectual Property
Service (SENAPI) has been set up and is fully active.  The Industrial Property,
Copyright and Plant Breeders departments, accredited as the enquiry points for the
WTO, will continue to operate a nd will become part of the SENAPI.
In this connection, it must be emphasized that Bolivia is making great efforts to comply with
its commitments, which involve high social costs in eliminating the large number of informalactivities that are contrary to the principles of intellectual property rights and are an almost inevitable
consequence of the significant levels of poverty.
It is extremely difficult to explain to a large sector of civil society, whose income depends on
such activities, that as a result of international negotiations, whose positive results may not be
perceived, they must relinquish or lose their source of income.
Services
Bolivia has stated that its Investment Law (Law 1182 of 17 September 1990) extends national
treatment to foreign investors.  Could Bolivia confirm that this includes all service sectors, as well as
manufacturing?
Article 9 of Law No. 1182 states that "Freedom  of production and the marketing of goods and
services, as well as free fixing of prices, shall be guaranteed, with the exception of those goods and
services whose production and marketing are prohibited by law".
Article 2 provides the following:  "Foreign investors and the businesses or companies in
which they participate shall have the same rights, duties and guarantees granted by the laws and
regulations to national investors without any limitation other than those laid down in the Law".WT/TPR/M/57
Page 46
Article 25 of Bolivia's Political Constitution lays down limitations on the activities of foreign
citizens in Bolivia:  "Foreign citizens may not acquire nor own, in any capacity whatsoever, the soil or
subsoil, directly or indirectly, either individually or in partnership, within fifty kilometres of the
border, on penalty of forfeiting the property acquired to the benefit of the State, except in cases of
national necessity specified in a special law".
The Law on Brokers for Exports of Energy,  Hydrocarbons and Telecommunications of
National Necessity (Law No. 1961 of 23 March 1999) implements Article 25 of Bolivia's Political
Constitution and authorizes foreign persons and compan ies to own areas within fifty kilometres of the
border in specific areas defined in the law for the purpose of transport and marketing of hydrocarbons
and by-products, electricity and telecommunications services.
The Secretariat has stated that Bolivia’s GATS Schedule is “relatively modest,” and further notes that
“in some cases, existing legislation offers more liberal treatment to foreign providers than Bolivia'sbindings under the GATS.”  Will Bolivia be prepared in the next GATS round to bring its GATS
commitments into line with current practice?
Unlike other Members of the WTO, Bolivia is implementing a broad policy of openness and
has adopted unilateral measures.  It is not, however, prepared to pursue this policy if it does not
encounter similar positions that meet its expectations.
We remain disappointed that Bolivia has not fulfilled its obligations under the Fifth Protocol to the
GATS and has not yet brought its 1997 financial services commitments into force.  Please provide an
update on when Bolivia will accept the Fifth Prot ocol.  We are concerned that Bolivia may be
needlessly complicating ratification of its 1997 commitments.  The Report by the Government notes
that Bolivia “is currently bringing its offer into co nformity with the Draft Law on Banks, after which
it will ask the WTO to reopen the Fifth Protocol so that it may deposit the corresponding instrument
of ratification.”  The text seems to imply that ra tification of the 1997 commitments could be held up
until the new legislation is passed and signed into law.  If so, this would be unnecessary.  It would be
better for Bolivia to simply ratify its 1997 commitments, and then submit a revised schedule of
commitments when the relevant laws have been passed.
The Executive is drafting a Law on a Deposit Guarantee Fund, which amends important
chapters of the existing Law on Banks and Financial Institutions, especially as regards intervention
and rehabilitation of financial institutions facing crises and the participation of international agencies,
of foreign financial institutions and the cover of their operations by the Fund.
Regarding monetary and exchange rate policy, we understand that the role of the Central Bank has
been modified to some extent by the "Ownership and Popular Credit" law of June 1998.  This law
establishes two new institutions, the Committee of Prudential and Financial Norms (CONFIP) and
the Superintendency of Hierarchical Resources (SRJ).  What role do these institutions play in the
regulation of the financial sector and what is their relationship to the Central Bank?
The Property and People's Credit Law maintains unchanged the functions of the Central Bank
of Bolivia as the sole monetary and exchange authority.  It also provides that the regulatory functions
of the financial intermediation system should be transferred to a joint body called the Committee ofPrudential and Financial Norms (CONFIP), composed of the President of the Central Bank of Bolivia,
the Superintendent of Pensions, Securities and Insurance, the Superintendent of Banking and
Financial Institutions, and the Vice-Minister of Financial Affairs of the Ministry of Finance.  The
Committee is responsible for approving prudential norms for the financial system and ensuring
coordination between the regulation of the financial intermediation market and the securities andinsurance markets.  This Law also establishes the Administrative Appeals Board, which examines and
rules on appeals made against decisions by the Superintendency of Banking and Financial InstitutionsWT/TPR/M/57
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or the Superintendency of Pensions, Securities and Insurance, with the exception of those related to
the forced liquidation of institutions subject to control.
We understand that Bolivia passed a new Securities law in 1998.  Can Bolivia describe this law and
its objectives and the impact it is likely to have on securities trading and Bolivian companies' access
to new sources of funds?
The Stock Market Law regulates public sale and intermediation of securities, stock markets,
stock brokers, fund managers and investment funds, securitization companies and securitization, risk
valuers, issuers, securities deposit institutions, and other stock market activities.  This Law also covers
the operation and competence of the Superintendency responsible for the control and regulation of the
stock market.  Its main objective is to regulate and promote an efficient, well-organized, integrated
and transparent stock market.
At present, the stock market only deals in fixed-interest bearing securities and short-term
securities.  It is hoped to achieve long-term capital investment through the capital market, making it
possible to attract financial resources at lower cost than that currently prevailing on financial markets.
What is the status of the Bolivian Government’s plans to submit to Congress a draft law for deposit
insurance and resolving problems of banks in difficulty, and to issue regulations on bank disclosure
standards and financial risk analysis?
A preliminary draft Law on a Deposit Guarantee Fund, is under consideration and will be
submitted to Congress for approval by the end of 1999.  The main elements of this draft are:
(i) To establish guarantees for deposits not exceeding US$10,000;
(ii) to define grounds for intervention in financial institutions in crisis situations;
(iii) to improve procedures for dealing with the compulsory liquidation of companies;
and
(iv) to determine protection for the authorities carrying out intervention and liquidation
procedures.
The work programme of the Committee of Prudential and Financial Norms until the end of
this year includes approval of rules on banking secrecy and the analysis of financial risk.
We note that Bolivia has concluded a number of preferential agreements, including at least two with
provisions relevant to the GATS, the Andean Co mmunity agreement and the bilateral agreement with
Mexico.  Please provide information on Bolivia’s pl ans to present these agreements for review under
GATS Article V.
The Andean Community was established in June 1997 and it should be pointed out that the
Community was created as part of the integration process that has been taking place since the
conclusion of the Cartegena Agreement, which was notified on 12 May 1987.  The Andean Group,which is now called the Andean Community, set up a free-trade zone in 1991 and in 1993 decided to
adopt a Common External Tariff, which came into effect in 1995.
The creation of the Andean Community as such was not notified to the WTO because the
letter and spirit of the trade provisions agreed by the Andean Group, which had already been notified
in accordance with the enabling clause, had not changed.
Regarding the agreement with Mexico, it has been suggested that Bolivia should
notify the services section in accordance with Article V of the GATS.  As already indicatedabove, LAIA is responsible for doing this.WT/TPR/M/57
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Investment
In a TRIMs notification in 1998, Bolivia identified a restriction on the export of natural gas to
amounts determined by the Office of the Supervis or of Hydrocarbons of the Sectoral Regulation
System to meet export contracts entered into prior to when the Law of Hydrocarbons entered into
force and to meet domestic consumption.  Has Bolivia eliminated this restriction, and if not, whatsteps is Bolivia taking to come into compliance by the end of this year, as mandated by the TRIMs
Agreement?
Response not received.
We commend the Government of Bolivia for completing its capitalization programme and the
implementation of the Sectoral Regulation System  Law (SIRESE) to regulate the electricity,
telecommunications, hydrocarbon and transportation sectors.  A transparent regulatory system with a
stable legal framework is essential to continuing the success of the capitalization programme.  Webelieve that passage of an administrative procedures law (Ley de Procedimiento Administrativo)
would enhance the administrative appeal process and the investment climate and we urge its passage
in the near future.  Please indicate the current status of the Bolivian Government’s plans for such a
law.
The draft Administrative Procedure Law is being discussed in Parliament and it is hoped that
it will be approved during the current term.
Agriculture
(a) Application of the WTO Agreements
The United States notes that the application of sanitary and phytosanitary measures is currently the
responsibility of the National Directorate for Production and Agricultural Protection, and will soonbe the responsibility of the Agriculture and Livestock Health Service Agency, which awaits legislative
approval.  We would appreciate an update on the status of the legislation creating the new agency.
What changes to sanitary and phytosanitary measures are contemplated in order to achieve the
improvement in procedures which Bolivia has stated that it expects?
Regarding the Agreement on Subsidies and Countervaili ng Measures, what is the status of legislation
that is currently being considered which is aime d at bringing Bolivia into conformance with the
provisions of GATT 1994.  What specific changes to existing legislation are planned?
Response not received.
(b) Policy objectives
Bolivia states that the establishment of the Mini stry of Agriculture and Rural Development in 1997,
was aimed at strengthening the “n ormative and administrative capacity of MAGDR, modernize rural
sector legislation, and improve programme implemen tation.”  What specific activities/policy changes
have been planned or implemented to assi st the Ministry in achieving this goal?
Response not received.
Could Bolivia please provide details on the National Plan for Food Security (PLANSA) which was
established to ensure food security?  How does Bolivia anticipate the PLANSA achieving self-
sufficiency in food production?WT/TPR/M/57
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The objective of PLANSA is to improve food processing, make foodstuffs more readily available and
promote better use, consumption and management of foodstuffs.
Four sub-programmes are intended to achieve these objectives:
- Adaptation and administrative modernization of PLANSA;
- investment in improving access to food;- making food available;
- enhancing the use of foodstuffs.
This process is intended to ensure that all persons have material and economic access
to a sufficient amount of food for a healthy and productive life.
(c) Key sub-sectors
Soya
We understand that the Ministry of Agriculture and Rural Development does not intervene in the
marketing of soya products except, “in cases of domes tic shortage.”  In such cases, what steps might
or has the Government taken to intervene?  Please indicate specific controls or restrictions that havebeen/could be implemented.
Response not received.
Sugar
Bolivia explains that the deregulation of the domesti c sugar industry is nearly complete.  We would
appreciate a status report on the deregulation of the Bolivian sugar industry.  What forms ofassistance has the Bolivian Government provided to aid producers during the adjustment period?
Following the transfer of the Bermejo refinery to the private sector, the Government no longer
has any holding in sugar production.  The sugar market is based on market trends and the Government
has not granted any type of assistance to this sector during the adaptation period.
(d) Key policies and practices
Overview
Could Bolivia please explain which alcoholic products are subject to price and quantity controls?
How are prices for these products established?  Are any agricultural products subject to the same
controls?
Regarding Bolivia's policy of openness, there are no quantity or price controls on the import
of alcoholic beverages.   Prices are fixed through free supply and demand.  This reply also applies to
agricultural products.
Import levies and charges
Bolivia notes that Article 2 of Andean Decision No. 370, allows the country to maintain a national
external tariff different from the Andean Common External Tariff.WT/TPR/M/57
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Does Article 2 of Andean Decision No. 370 also provide for an exemption to the Andean Price Band?
If not, which products are subject to import duties assessed under the Andean Price Band?
Bolivia does not apply the Andean system's price band so no products are subject to these
tariffs.
Marking, labeling and packagingBolivia reports that a new labelling standard for food products is being considered.  We would
appreciate information regarding the new requir ements.  Please provide the status of the
implementation of the new labelling standard.
This is a temporary emergency m easure and will be eliminated soon.
According to Bolivia, various technical and sanita ry requirements affecting imported products have
been adopted by prefectures in Bolivia, which “complement” national requirements.
Are there any cases when prefecture requirements differ from those established by the National
Government?  For example, Bolivia states that in the Department of Oruro, prefectural regulations
apply to imports of Chilean tomatoes and f ood products.  Are there other examples?
When prefecture requirements differ, how are differences handled when prefecture requirements are
more stringent than those applied at the national level?
The prefectures represent the Executive in Bolivia's departments and deal with regional
affairs in accordance with the regulations issued by the relevant authorities.  Prefectures in thedepartments do not have any authority to establish technical or health requirements for imported
products.  Their role is to take the necessary administrative and logistical measures to comply with,
and ensure compliance with, the regulations issued by the Executive in this and other areas.  Any
instruction from a prefecture that is not strictly in conformity with the regulations issued by the
Executive can be challenged as unconstitutional.
Government procurement
What are the Government of Bolivia’s inte ntions regarding signing the WTO Government
Procurement Agreement?
Please explain the selection process that determines the definition of an international bid as opposed
to a national bid.
The qualification and evaluation procedures of a procurement are conducted by a four member
commission, which is charged with making aw ard recommendations. How is the commission
membership determined and are there provisions made for the challenge or oversight of the
commission’s recommendations or decisions?
Are provisions made in Bolivian legislation for open and transparent bid challenge procedures?Please clarify the process which is used to determine contract award decisions.
Noting that Bolivia’s bid notification requirements are comparable to that of the GPA for
international bids, please clarify which firms are eligible to receive direct invitations.WT/TPR/M/57
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It is noted that under Supreme Decree No. 216145 only domestic firms are allowed to participate in
national bids. Please clarify the nature of invita tions under Bolivian legislation and whether non-
domestic entities are allowed to bid on invitations if they have not been invited directly.
Does the Bolivian procurement system provide for standardized bid specifications, or do
specifications vary depending upon the entity which is offering bids?
As all domestic goods and services are given a 10% preference on their total valuation, please
explain how the technical valuation for award decisions are derived.  Does the Government of Bolivia
intend to eliminate the 10% preference for domestic suppliers?
What special factors of a procurement m andate the pre-qualification of suppliers?
Bolivia is following with interest developments concerning agreements on government
procurement and is participating in regional negotiat ions on this subject, even though in the short term
it does not envisage participating in the Plurilateral Agreement on Government Procurement.
Bolivia's legislation is currently being studied in the light of the latest developments in this
area.
Customs
When does Bolivia expect to enact its new customs law?  Please describe the characteristics of the
new law.  How long is the implementation of re forms by the customs service expected to take?
The purpose of the draft Customs Law submitted to Congress in July this year is to facilitate
customs procedures and make them more transparent, diminish the discretionary authority of customs
officials, make them more professional and place their recruitment on a non-political basis.
Smuggling is deemed to be a criminal offence liab le to a term of imprisonment of up to six years.
The draft Law defines the guidelines for customs valuation, which are consistent with the
WTO's Customs Valuation Agreement.  The introduc tion of non-preferential rules is not envisaged.
The customs reform process will be implemented within five years.
Taxes
How does Bolivia justify applying a lower domestic consumption tax to Chica de Maíz than to
equivalent imports of alcoholic beverages?
"Chicha de Maíz" (not "Chica de Maíz") is a beverage from the Cochabamba region and is
produced in provinces in the valleys of the Cochabamba department, for example, Punata, Tarata and
Cliza.  Although it is an alcoholic maize-based beverage and is widely consumed in the
aforementioned zones, it does not replace other alcoholic beverages and cannot be sent to the
domestic market because it is produced on a very rudimentary and small scale that makes it
impossible to package and maintain properly for consumption within a specified period after
production.
Because of the way it is produced and cultural fa ctors, the consumption of "Chicha de Maíz"
is subject to a special tax which is collected and administered by the municipality in each locality
where it is produced.WT/TPR/M/57
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Labour Policy
We note that concerns have been raised by the ILO for several years regarding Bolivia’s practices
regarding freedom of association and that the Government of Bolivia was asked to bring its
legislation into conformity with ILO norms.  At the December 1998  ILO meeting, your Government
indicated it had taken some steps to address some of these  concerns.  What action has Bolivia taken,and  what is the status of labour code reform in Bolivia?
The Singapore Declaration clearly states that the International Labour Organization (ILO) is
the competent body to set and deal with the standards.
TURKEY
In view of the current fall in exports, could Bolivia outline its present policies and indicate what
additional measures are envisaged to promote and diversify exports?
Bolivia's export development policy (growth and diversification) is based on the principle of a
neutral tax base and promoting this activity by facilitating trade and boosting exports.
Facilitation of trade means all the steps taken to simplify procedures for exports, reducing
both the time and the cost for exporters.  This is done through the Single Export Window System
(SIVEX).
Another important factor in boosting exports is institutional development that promotes
various branches of production, bearing in mind their specificity, for example, technical and health
regulations that help to ensure the openness of markets.
The improvement and construction of the basic infrastructure now taking place in Bolivia,
particularly highways, river, maritime and air transport, are of vital importance for the growth and
diversification of exports.
The Promotion Centre of Bolivia (CEPROBOL) is  responsible for promoting exports.  It is a
decentralized body which directly assists individual enterprises by supplying trade information and
support for participation in fairs, negotiations and trade missions, and for the transfer of technology
and training at managerial level.
Following the fall in prices which has affected export growth, resulting in lower export
values, the Government is stepping up its export promotion activities so as to offset the effects of the
slow-down in international trade.
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