RESTRICTEDWORLD TRADE
ORGANIZATIONWT/TPR/G/57
25 June 1999
(99-2624)
Trade Policy Review Body Original: Spanish
TRADE POLICY REVIEW
BOLIVIA
Report by the Government
Pursuant to the Agreement Establishing the Trade Policy Review Mechanism
(Annex 3 of the Marrakesh Agreement Establishing the World Trade
Organization), the policy statement by the Government of Bolivia is attached.
Note: This report is subject to restricted circulation and press embargo until the end of the meeting
of the Trade Policy Review Body on Bolivia.Bolivia WT/TPR/G/57
Page 3
CONTENTS
Page
I. INTRODUC TION ................................................................................................................. .....4
II. ECONOMIC AND INVESTME NT ENVIRONMENT.............................................................5
(i) Economic policy ............................................................................................................5
(ii) Structural  reforms ......................................................................................................... .7
(iii) Investm ent po licy......................................................................................................... ..8
III. EXTERNAL AND TRADE  ENVIRONM ENT .......................................................................10
(i) The extern al sector.......................................................................................................10
(ii) Trends in fo reign trade.................................................................................................12
(iii) Development of the trade policy..................................................................................14
(iv) Economic in tegration...................................................................................................15
IV. BOLIVIA AND THE WTO......................................................................................................17
(i) Bolivia and the multila teral tradin g system .................................................................17
(ii) Application of th e WTO Agreements..........................................................................17
(iii) Boliva's position regard ing future ne gotiations ...........................................................19
(iv) Directions of  trade policy ............................................................................................20
V. CONCLU SIONS.................................................................................................................. .....20WT/TPR/G/57 Trade Policy Review
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I. INTRODUCTION
1. In accordance with the provisions in Annex 3 of the Marrakesh Agreement, this report
describes the trade policies and practices which Bolivia applied during the 1993-1998 period.  In
doing so, it addresses the background against which these policies and practices have developed, with
emphasis on structural reforms of a political and institutional nature designed to improve the market
economy model and to implement the legislation and mechanisms stemming from Bolivia'sinternational commitments, in particular th ose assumed in the framework of the WTO.
2. For the last 14 years, Bolivia has maintained in being a model of an open market economy.
During this period, it has overcome the high levels of economic and political instability that had
characterized the first half of the 1980s and has continued an ongoing process of structural reforms
which have substantially modified the economic and institutional foundations of the country.
3. Economically speaking, Bolivia has instituted reforms within the framework of a structural
adjustment programme.  From the second half of the 1980s onwards, it has consolidated economic
stability through the application of a policy of fiscal and monetary discipline.  Markets for goods and
services and interest rates were liberalized, labour laws were reformed and an exchange policy was
applied based on a single and flexible rate of exchange, in keeping with the real supply of and demandfor foreign currencies.
4. Since 1990, reforms designed to modify the role of the State in the economy have been
introduced.  Small government enterprises were privatized and the large ones capitalized, generating
significant increases in foreign direct investment (FDI) in strategic sectors of the economy.  Since
1993, the year in which Bolivia submitted its initial report, the country has continued to develop its
policies of opening up to international trade and foreign investment.
5. Among the reforms pursued during the period covered by this report, the most outstanding are
mass participation and administrative decentralization and, more recently, reform of  the judicial
system, reform of the State and educational reform, not to mention the improvement and
consolidation of the economic and social model adopted in 1985.
6. As a result of the reforms and programmes undertaken, significant improvements have been
achieved in the economic and political environment.  Prominent among these are economic stability,the fall in the public deficit, reduced inflation, sustained economic growth of about 4.5 per cent
(2.2 per cent per capita) in recent years, the increase in exports at annual rates of more than
10 per cent and the structural change towards non-traditional exports with a higher value added.  In
the financial sector, the increase in bank deposits to levels of about 40 per cent of GDP is noteworthy,
as is the reduction of foreign debt to about 50 per cent of GDP, although debt servicing still accountsfor 25 per cent of the country's exports by value.
7. The reduction of foreign debt to sustainable levels has been achieved thanks to the HIPC
initiative, which will make it possible to devote these resources to the social sector.
1
8. In 1997, a General Economic and Social Development Plan was adopted with four action
pillars:  Opportunity, Dignity, Institutionality and Equity;  its main goals, up to the year 2002, are toachieve greater economic growth, consolidate macroeconomic stability, generate more employment
and greater income, reduce urban and rural poverty, improve education, health and access to housing
and basic services and remove the country from the drug-trafficking cycle.
                                                     
1 In September 1998, Bolivia reached the performan ce point of the Highly Indebted Poor Countries
(HIPC) Debt Initiative.Bolivia WT/TPR/G/57
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II. ECONOMIC AND INVESTMENT ENVIRONMENT
(i) Economic policy
9. Since 1985, Bolivia has been making far-reaching changes in its economic policy in order to
face up with resolution and effectiveness to the crisis which, until that year, had been causing intensehyperinflation.  Since then, economic policy has been focused on the liberalization of economic
activities, the allocation of resources in accordance with market signals and the external opening up of
the economy.  The State has also reserved for itself the role of facilitator and regulator of private
activities and investor in economic infrastructure and social development, thus reducing the
preponderant part it had played in economic activities in the past.
10. Since it achieved stability, Bolivia's macroeconomic policy has sought to produce sustained
growth and to reduce poverty.  In recent years, there have been some significant achievements in
terms of controlling inflation, reducing expenditure, increasing international reserves and so forth, but
the progress made in the matter of economic growth is still not sufficient to cope with the high levels
of poverty.
11. Between 1993 and 1998, the average annual growth of the economy was 4.5 per cent.  It
reached 4.75 per cent in 1998, despite the negative effects of the natural phenomenon "El Niño",
which had an unfavourable impact on the performance of the agricultural sector, and the international
crisis which generated, inter alia , significant reductions in the international prices for Bolivian
exports, with a consequent fall in the total value of exports.  In 1998, for the first time in the last
18 years, economic growth was above the level of inflation.
12. Investment has been increasing during the period, with greater participation by the private
sector which was up from 8 per cent of GDP in 1993 to 13 per cent in 1997 and 17 per cent in 1998.
FDI also increased, from 2.2 per cent of GDP in 1993 to 10.2 per cent of GDP in 1998, mainly due to
investment in the capitalized enterprises.
13. Inflation continued to fall from 9.3 per cent in 1993 to 4.4 per cent in 1998, the lowest figure
in recent years.
14. The overall fiscal deficit which had been 6 per cent of GDP in 1993, fell to 4 per cent in 1998.
It should be noted that the 1997 and 1998 deficits were mainly due to the cost of reforming the
pensions system;  this was 3.3 per cent of GDP in 1997 and rose to 4 per cent of GDP in 1998.  If this
cost had been deducted from fiscal expenditure in 1998, operations would have registered a shortfall
of only 0.03 per cent of GDP.
15. In the external sector, there has been a rise in the current account deficit since 1993, mainly
due to the increase in imports of capital goods and inputs, caused particularly by the investment in the
capitalized enterprises and by the construction of th e gas pipeline to Brazil, and to a slowdown in the
growth of exports which, although they increased at an annual average rate of 9 per cent thanks
especially to the growth in the exports of non-traditional products, did not grow sufficiently to preventthe opening of a gap as a result of the dynamic annual increase of 11 per cent in imports between
1993 and 1998.
16. As a result of the net inflow of long-term capital, net international reserves (NIR) increased
from US$371 million in 1993 to US$1,064 million in 1998.  The gross reserves covered 7.7 months of
imports in 1997 but, in 1998, the coverage fell to 7.2 months, as a result of the increase in importsmainly connected with the construction of the pipeline to Brazil.WT/TPR/G/57 Trade Policy Review
Page 6
17. Between 1993 and 1998, the balance of the foreign-held medium-term and long-term public
debt showed a downward trend;  in 1993 it had b een equivalent to 66 per cent of GDP whereas, in
1998, it was about 51 per cent.  Debt servicing as a percentage of exports fell from 29.7 per cent in
1993 to 25.7 per cent in 1998.  It is expected that, from 1999 onwards, debt servicing will decrease as
a result of the relief given under the Heavily Indebted Poor Countries (HIPC) programme, which will
make it possible to reallocate the resources released to the social sectors, particularly education, healthand rural development.  The originally planned relief with a net current value of US$448 million
would be increased, thanks to the extraordinary support given by the Government of Japan, by
approximately US$760 million, giving US$1,200 million in nominal terms.
18. Banking system deposits increased during the period 1993 to 1998 by 67.4 per cent, from
US$2,053 million to US$3,437 million (40.2 per cent of GDP);  for its part, the securities portfoliogrew by 70 per cent to US$4,030 million in 1998 (47.1 per cent of GDP).  These indicators reflect the
confidence of the general public in the financial system.
19. During the period, lending and borrowing rates co ntinued to decrease, in parallel with the
reduction in the international interest rate.  The "country risk", defined as the difference between the
average borrowing rate of the system and the LIBOR rate, was reduced from 6.7 per cent in 1993 to3.1 per cent in 1998, reflecting the improvement in the terms that Bolivia is offering to foreign
investment.  This was due to economic stability and financial strengthening, which encouraged a
greater presence of foreign banks in the country, and to the new rules for legal reserves which have
reduced the costs of financial intermediation.
20. As for risk ratings, those obtained by Boliv ia in 1998 from the international agencies,
Standard & Poor's and Moody's, should be highlighted.  The former's rating was "BB+/Stable B" for
national currency loans and "BB-/Stable B" for fore ign currency loans, whereas Moody's was B1 for
foreign currency loans.  These positive ratings, wh ich are the result of continued investment-friendly
conditions in the country, combined with political, economic and social stability, contrast with the
decline in risk ratings for the long-term bonds of neighbouring countries.
21. Lastly, it should be mentioned that a study carried out by the Heritage Foundation, in
conjunction with the Wall Street Journal, to establish an economic freedom index for 161 countries onfive continents, places Bolivia among the nations having the freest economies with a classification of
2.65 in 1998, an improvement over 1996 (2.76) and 1997 (2.85).
- General Economic and Social Development Plan
22. Bolivia is endeavouring to speed up economic growth with a policy based on four pillars of
action:  Opportunity, Equity, Dignity and Institutionality, which are set out in the General Economic
and Social Development Plan "Bolivia XXI" and in the 1997-2002 Operating Action Plan.
23. The Opportunity Pillar seeks to generate more employment and income through major
economic growth, by maintaining macroeconomic stability and deepening the structural reforms.
24. The Equity Pillar seeks to reduce the levels of poverty, improve educational reform, carry out
reforms in the health sector, facilitate greater access to individual housing and basic services and
support rural development, through a sustained growth in social expenditure.
25. With the Dignity Pillar, the country has undertaken to eliminate the plague of trafficking in
narcotic drugs and remove Bolivia from the coca-cocaine cycle by the year 2002, through the
development of alternative crops in the coca-producing areas, the application of interdiction
programmes, the eradication of surplus crops and a head-on campaign against drug trafficking.Bolivia WT/TPR/G/57
Page 7
26. Lastly, the Institutionality Pillar is directed towards improving the legal and institutional
framework in which the activities of the economic agents take place, reforming the judicial system
and the executive branch and eliminating corruption, with the active participation of civil society.
(ii) Structural reforms
27. With the programme of structural reforms, applied since 1985, Bolivia has established the
basic conditions for stabilizing the economy - which had been affected by uncontrollable imbalances
resulting from runaway hyperinflation - modifying the role of the State in economic activities and thus
making it possible for the economy to grow.
28. The first generation of reforms, between 1985 and 1993, included the unification of the
exchange rate, the elimination of import restrictions and restrictions on the free movement of capital,
the granting of guarantees to foreign investment, simplification of the tax and tariff systems,
elimination of official prices and liberalization of interest rates.
29. In 1994, the second generation of reforms began with the cooperation of the multilateral
financing organizations and an Enhanced Struct ural Adjustment Facility (ESAF) with the
International Monetary Fund (IMF).  This facility made it possible to deepen the reforms and maintain
macroeconomic stability.
30. The reforms initiated within this second generation framework were mass participation and
administrative decentralization of the State, the capitalization of public enterprises, modernization of
the pensions system and individual capitalization, judicial reforms, reform of the State andeducational reform.  The reforms of the judicial  system were particularly noteworthy with the
institutionalization of the Ombudsman, the Judicature Council and the Constitutional Court.
Regulations were also promulgated to improve tax neutrality for exports and to deepen the integration
of the country into regional and multilateral sche mes.  As regards the facilitation and control of
foreign trade, the laws on customs and exports - which are currently being prepared - will make it
possible to establish adequate tools to facilitate the development of foreign trade.
31. The deepening of the structural reforms, especially that of the capitalization process, required
a set of measures such as the Capitalization Law and the Sectoral Regulation System Law together
with amendment of the Tax Law and of various sectoral laws such as those on electricity,
telecommunications and hydrocarbons and the Mining Code, among others.  Bolivia has also been
continuing its structural reforms, particularly as regards modernization of the financial sector, through
the promulgation of the Banks and Financial Institutions Law (14 March 1993), Pensions Law(29 November 1996), Stock Market Law (31 Marc h 1998) and Insurance Law (25 June 1998).  In
addition, the Concessions, Basic Health Insurance, Property and Popular Credit and Financial
Regulation System Laws were approved.
32. The Banks and Financial Institutions Law and the Central Bank Law establish a regulatory
framework which renders it possible to supervise and monitor financial intermediation activities in thecountry.  As a complement thereto, the Property and Popular Credit Law (Law 1864 of 15 June 1998)
reorganized the regulation context through the establishment of the Financial Regulation System
(SIREFI) and established the Committee on Prudential Financial Standards (CONFIP), as the body
responsible for approving prudential standards for the functioning of the national financial system.
33. These measures, accompanied by the climate of economic, political and social stability, have
rendered possible a greater competitiveness in the national banking system as a result of mere
participation by foreign banks:  purchase of 100 per cent  of the BHN Multibanco shares by Citibank
and of 89.8 per cent of the total shares of the Banco Santa Cruz by the Banco Central Hispano.  In thisWT/TPR/G/57 Trade Policy Review
Page 8
way, the soundness, effectiveness and transparency of the Bolivian banking system is being
consolidated.
34. It was in this new regulatory framework for the financial sector that the preventive
intervention in the Banco Boliviano Americano ( BBA) took place.  According to the indicators
reported in recent months, the BBA was about to be faced with a medium-term liquidity problem as a
result of its high percentage of non-performing loans and the constant withdrawal of deposits.  In thecircumstances, and within the framework of the prevailing rules, the Banks and Financial Institutions
Supervisory Board intervened in the said institution as a precautionary measure in order to minimize
the losses of private depositors and the tax authorities, by arranging the transfer of its assets and
liabilities to other established banking institutions.  In this way, the preventive intervention in the
BBA was carried out both transparently and efficiently  without a run on the bank or any danger to the
system.
35. Law 1864 on Property and Popular Credit has as its objectives the democratization of credit
and readjustment
2 of property, through the broadening of microcredit, the extension of financial
services to the municipalities and the strengthening of the system of financial intermediation.
36. The Fund for the Development of the Financial System and Support of the Productive Sector
(FONDESIF) is responsible for the government programmes for strengthening and giving full support
to institutions which deal with microcredit applications.  At the moment, the Microcredit Programme
(PM), including the programme of financial services for municipalities, is currently being developed.
(iii) Investment policy
37. Bolivia has promoted a policy that has enabled it to bring about and maintain a favourable
climate for private investment, both national and foreign, by guaranteeing economic, political and
social stability.  Between 1993 and 1998, it succeeded  in maintaining financial stability, low inflation
and a stable and ongoing tax policy.  Likewise, the system of registering, establishing and operating
companies in Bolivia was improved.
38. As a result of administrative decentralization and the processes of privatizing and capitalizing
state-owned enterprises, public investment has been transformed and reoriented, through new
mechanisms for establishing priorities whose results are set forth in Annual Operating Plans;  towardssocial development and the economic infrastructure.
39. The Investment Law (Law 1182 of 17 September 1990) extends national treatment to foreign
investors.  There is no discrimination by country of origin of the capital, no incentives to use domestic
raw materials and inputs, and no rules concerning the levels of production or of exports achieved.
Investment policy is supplemented by a national regulatory system which promotes free competitionand thus facilitates FDI.
40. Since 1991, Bolivia has focused the functions of the State on the supply of basic services to
the population and has reduced its participation in the administration of enterprises producing goods
and services, which have been transferred to private economic agents.  Public investment, determined
by the level of public savings and concessionary financing, is directed exclusively to sectors with ahigh social content, leaving investment in sectors with a high economic and financial profitability to
the private sector.
                                                     
2 People's Shares, which are owned by resident Bolivian citizens, convey rights over the Collective
Capitalization Fund.Bolivia WT/TPR/G/57
Page 9
41. The regulations and institutionality of the country have been improved in order to stimulate
private investment.  In that connection, the most significant change occurred with the promulgation of
the Capitalization Law (21 March 1994) and the Sectoral Regulation System Law (SIRESE)
(Law 1600 of 28 October 1994), the purpose of which is to regulate, control and supervise activitiesrelating to the sectors of telecommunications, hydrocarbons, transport, water and electricity, in
accordance with statutory sectoral standards.  The Arbitration and Conciliation Law (10 March 1992),
the Environment Law (27 April 1992) and the Law on Concessions for Public Works (17 June 1998)
likewise constitute important instruments in the context of legislation for private investment and FDI.
42. The aim of the capitalization programme in Bolivia is:  to constitute limited liability
companies by building up the registered capital of the state-owned enterprises, through contributions
of private capital, in order to improve production and the economic development of the country.
Capitalization has made it possible to sell state- owned enterprises to private investors, who have
committed investment sums of more than US$1,500 million.
43. The privatization process, initiated in Bolivia in 1992, made it possible to reorganize
44 economic units prior to 1993, to privatize 53 enterprises between 1995 and 1997 and to privatize
two economic units in 1998.  The process is still co ntinuing with another 24 state-owned enterprises
scheduled for privatization.
44. On 23 March 1999, the Bolivian Government approved Law 1961 on Export Corridors for
Energy, Hydrocarbons and Telecommunications, the so-called "Ley Corazón" ("Heart Law"),
designed to make Bolivia the centre for the highway, energy and telecommunications integration of
the Southern Cone on the basis of the potential offered by its geographical location and its important
natural resources.
45. The geographical location of Bolivia is generating a series of investment projects and
agreements connected with important activities such as the distribution of natural gas and electrical
power to the continent, which will make it possible to increase the production of hydrocarbons and the
generation of electricity.
46. Connecting together the Pacific and Atlantic Oceans would make Bolivia into a link between
Argentina, Brazil, Chile, Paraguay and Peru through export corridors, including the Paraná-Paraguay
Waterway, which would facilitate its access to the oceans and integrate the Bolivian regions,
favouring the location of centres of production in the country's interior.
47. Investments are being made in fibre optics to connect up with Chile, Peru and Argentina, and
this could make Bolivia a telecommunications centre for South America.
48. In Bolivia, investment opportunities exist in various sectors and activities which include the
productive exploitation of a large variety of natural resources distributed far and wide throughout the
country.  The sectors with the greatest potential are mining, hydrocarbons, agro-industry, and forest
exploitation together with services such as telecommunications, electric power and tourism.
49. As a country which is a member of the Andean Community and associated with
MERCOSUR, Bolivia has access for its products and services to a market of more than 300 million
inhabitants.
- Investment protection and guarantee agreements
50. Private investment in Bolivia is guaranteed internationally by various agreements and
systems, such as the Multilateral Investment Guarantee Agency (MIGA), the Overseas PrivateWT/TPR/G/57 Trade Policy Review
Page 10
Investment Corporation (OPIC), th e International Centre for the Settlement of Investment Disputes
(ICSID), the World Intellectual Property Organization (WIPO) and the Agreement on Trade-Related
Aspects of Intellectual Property Rights (TRIPS), among others.
51. For the purpose of creating favourable conditions to stimulate the transfer of capital and
technology between the parties by promoting and pr otecting investment, Bolivia signed between 1993
and 1998 11 bilateral investment promotion agreements.  These agreements were signed with thefollowing countries:  Peru (30 July 1993), Netherlands (17 March 1994), Argentina (17 March 1994),
Mexico (10 September 1994), Chile (22 September 1994), Cuba (6 May 1995), Ecuador
(25 May 1995), Denmark (12 March 1995), Romania (9 October 1995), Korea (1 April 1996) and
United States of America (18 April 1998).
52. Likewise, Bolivia also maintains in force some conventions on the reciprocal protection of
investment, signed at an earlier date with Aust ralia, Belgium, China, France, Germany, Italy,
Luxembourg, Spain, Sweden, Switzerland and the Un ited Kingdom, and intends to conclude similar
conventions with Brazil, Canada, Colombia, Costa Rica, Paraguay, Uruguay and Venezuela.  In the
case of some of these, it is hoped that the negotiations will be completed in 1999.
III. EXTERNAL AND TRADE ENVIRONMENT
(i) The external sector
53. In the last five years, the international environment has been characterized by severe financial
disruptions such as the Mexican crisis of 1994 and the Asian crisis that began in 1997.  Although at
this point in time there are some signs that the crisis has eased, the economies of the region are still
feeling its effects.
54. The Bolivian economy is vulnerable to international crises because of its degree of
dependence on commodity exports (80 per cent of total exports), its high import requirements forcapital goods and raw materials, and its need for external financing.  Despite this vulnerability, the
country was affected neither by the Mexican crisis nor by the international rise in interest rates in
1994.  Capital flows did not contract but, on the contra ry, continued to grow in the case of FDI, and
international reserves maintained their rising tr end.  However, from the Asian crisis onwards, the
international environment became more unfavourable and the Bolivian economy felt the effects of theinternational crisis mainly through the fall in the prices of primary export commodities, whose index
declined between December 1996 and December 1998 by 12 per cent.  The economic impact was
reflected in a reduction in exports in 1998 of about 5.4 per cent in f.o.b. value terms, a situation that
resulted in an increase in the trade deficit forecast for that year.  However, the effect on the growth of
the economy was not significant, since economic activities achieved a growth of 4.75 per cent in1998, a rate in keeping with the forecasts for the year.
55. During the 1990s, the Bolivian economy has tended towards positive figures in the global
balance of payments.  In 1998, the global figures almost balanced, with a slight loss of reserves of
US$2.6 million.
56. In 1998, there was a current account deficit, mainly due to imbalances in the trade account.
This deficit was financed by long-term capital inflows, mainly FDI.
57. Between 1993 and 1998, the accumulated FDI fl ows amounted to US$2,570 million, with an
annual average of US$430 million.  Throughout the period, FDI showed a sustained growth trend,
reaching the record level of US$872 million in 1998, equivalent to 10.2 per cent of GDP.Bolivia WT/TPR/G/57
Page 11
58. The main stimulus to FDI occurred from 1995 onwards, as a result of the processes of
privatization and capitalization of state-owned enterprises and the new investment in various sectors
of the economy, particularly the construction of the pipeline to Brazil.  Thus, FDI was directed mainly
to the hydrocarbon sector, more than 60 per cent of the total, and to the trade and services sector,recent investments in banking and in the electricity sector being noteworthy.
59. The country's foreign debt indicators have improved considerably.  In 1990, the ratio of debt
to GDP was 78 per cent whereas in 1998 it was 51 per cent.  The ratio of foreign debt to exports of
goods and services fell, in its turn, from 380 per cent in 1990 to 323 per cent in 1998.  The
relationship of external debt servicing to exports has remained, despite renegotiations, at about 25 percent, but it is hoped that this will be reduced in the next few years as and when the impact of the relief
given by the HIPC initiative becomes more evident.
60. Although the foreign debt balance is still increasing, it has been doing at a slower rate,
dropping to an average of 3 per cent per annum.  From an average between 1990 and 1993 of about
US$3,700 million, it increased to US$4,387.7 million in 1998.  The negotiations in the Paris Club, themultilateral debt relief in the context of the HIPC  initiative and the decision by the Government of
Japan to offer some extra assistance will make it possible to improve foreign debt relief.
61. In 1998, the composition of the foreign-held public debt revealed a share of multilateral
sources - 63 per cent of the total - with a governme ntal share of 36 per cent and a negligible presence
of private sources.  As a result of the processes of privatization and capitalization, the share in thetotal of the foreign debt of state-owned enterprises has fallen from 12 per cent in 1990 to 4 per cent in
1998.  The debt for which the Central Government is responsible has remained at about 75 per cent of
the total but, as a result of the process of administrative decentralization, there has been a noticeable
increase in the share of the local governments.
62. Official financing connected with foreign-held public debt has also been decreasing in
importance.  In 1990, medium- and long-term capital connected with foreign-held public debt
represented 65 per cent of the net balance of the capital account, whereas in 1998 it had fallen to13 per cent of the net capital inflow.
63. The net international reserves of the Central Bank of Bolivia almost tripled between 1993 and
1998 from a level of US$371 million to one of US$1,064 million.  Short-term obligations, including
IMF obligations, averaged US$120 million.
64. Exchange rate value is established through the auction system (Bolsín) of the Central Bank,
an original market-oriented currency mechanism.  While the framework of an administered floating
system has continued, foreign exchange management has become more flexible since July 1994, and
has been directed towards the basic aim of maintainin g the stability of the real effective exchange rate.
The official rate is determined taking into account the exchange variations of a basket of currencies of
the main trading partners so as to introduce the possibility of the boliviano appreciating anddepreciating vis-à-vis  the United States dollar.
65. In 1998, exchange policy was more dynamic than in 1997.  The nominal devaluation in
December 1998 of 5.21 per cent was greater than the 1997 devaluation (3.47 per cent).  Nevertheless,
the control of domestic inflation and the apprec iation of the European currencies and of the
Japanese Yen in relation to the United States dollar made it possible for the real effective exchangerate index to depreciate, a situation that had not occurred in the last three years.  The depreciation of
the REER (real effective exchange rate) index in December 1998 was 1.36 per cent as compared with
1997.  In this way, an increase had been produced in the competitiveness of exports and of the
domestic products competing with imports in the local market.WT/TPR/G/57 Trade Policy Review
Page 12
66. The evolution of the REER for 1998 is to be explained by more active exchange policy and
low domestic inflation;  however, the improvements in exchange competitiveness occurred in a
difficult context:  large neighbouring trading partners such as Brazil, Chile and Peru devalued their
currencies more rapidly.  Despite the factors that had a negative effect on the performance of the
REER index, the gains in competitiveness in respect of most of Bolivia's trading partners
compensated for the unfavourable scenario vis-à-vis with the neighbouring countries and contributed
to the result achieved.
(ii) Trends in foreign trade
67. During the period 1993-1998, exports increased constantly, except in 1998 owing to the
effects of the international crisis.  Their percentage of GDP was 11.8 per cent in 1993, 14.6 per cent in
1997 and 13 per cent in 1998, when they recorded an f.o.b value of US$1,104 million as a result ofthe increase in exports of agro-industrial and manufactured goods, which changed the export
structure.
68. Imports grew much faster, particularly imports of capital goods (43.2 per cent of total
imports) and of intermediate goods (35 per cent).  The increase in the imports of capital goods was
due to the construction of the Bolivia-Brazil pipeline, which had a negative impact on the balance oftrade.  This shortfall will diminish in the future, as a result of an increase in gas sales to Brazil and the
elimination of the imports of capital goods associated with the building of the pipeline.
69. The trade deficit represented 7.1 per cent of GDP in 1993, but it diminished in later years
(3 per cent in 1994, 5 per cent in 1995 and 1996).  It reached its lowest level in the period with a
figure of US$161.9 million in 1994.  When, in 1995 and the following years, trading conditions
seemed to indicate a reversion of the trade deficit, the reforms to the Bolivian economy stimulated
economic activity and provoked an increase in imports, with the result that, as a percentage of GDP,the trade deficit ultimately rose to 10.3 per cent in 1998.
70. In the period under review, the evolution of the terms of trade tended to be unfavourable.
Between 1997 and 1998, there was a fall in the terms of trade index of 7 per cent.
- Imports
71. The structure of Bolivian imports reveals a greater presence of capital and intermediate
goods;  industrial sector imports (capital and intermediate goods for industry) represented 50 per cent
of total imports during the period under analysis.  The growth in imports was directed mainly towards
satisfying the demand of the productive sector.  Another important sector for goods' imports was
transport, where imports grew at a rate similar to that of industrial sector imports with a share of
19.2 per cent.  Consumer goods represented about 20 per cent of total imports, the distribution andrate of growth being similar for both consumer durables and non-durables.
-E x p o r t s
72. The changes which occurred in the export structure during the period 1993-1998 were
significant and originated mainly from the growth  in the supply of agricultural and agro-industrial
products.  While the exports of the mining and quarrying industries grew at an average rate of 2 per
cent per annum, exports of agricultural produce did so at an average rate of 18.7 per cent.  Exports of
manufactured goods grew at an annual rate of 5.3 per cent.  This marked difference in sectoral
dynamism has resulted in the export structure becoming more balanced in recent years.  In 1993,
exports of the mining and quarrying industries represented 61.5 per cent of the total while, in 1998,
their share was reduced to 47.5 per cent.  Exports of agricultural produce grew from 23.7 per cent inBolivia WT/TPR/G/57
Page 13
1993 to almost 40 per cent in 1998.  On the other hand, despite the increase in the value of the exports
of manufactured goods, their share in the total was relatively unchanged (14.7 per cent in 1993 as
against 13.4 per cent in 1998).
73. The growth in exports of agricultural produce of US$440.2 million in 1998 was due mainly to
the behaviour of foodstuff exports which, with an annual growth rate of 24.8 per cent, represented
84 per cent of the sector's exports.  Exports of soya beans and their derivatives were the most dynamic
component.  Brazil nuts constituted another important heading in the food sector, with a growth rate
of 15.2 per cent per annum, they accounted for US$30.9 million in 1998.  Coffee exports recovered
from 1993 onwards, after a falling for several years, with increases of 114 per cent per annum to reacha figure of US$26.0 million in 1997;  however, exports were reduced to US$15 million in 1998 as a
result the fall in prices.  Sugar exports increased from US$15.7 million in 1993 to US$ 24.6 million in
1998.
74. In recent years, various new export products have emerged, chiefly foodstuffs (agro-industrial
products) such as tinned hearts of palm, quinua (a Bolivian cereal with a high nutritive value), meat
and beverages (wines and beers).  Exports of agricultural raw materials (16 per cent of the sector in
1998) mainly consisted of sawn wood and cotton.
75. In 1993, the value of exports of products of the mining and quarrying industries represented,
with a figure of US$483.4 million, 61.5 per cent of total exports, whereas their share fell to 47.5 per
cent in 1998, with a value of US$533 million.  The main products of this sector are zinc, gold, tin andsilver in the ores and metals group and natural gas and oil in the fuels group.
76. Prominent among the exports of manufactured goods is the gold jewellery industry with a
value of US$58.2 million in 1998, being the main  heading in the group "Other Consumer Goods"
which accounted for 50 per cent of the exports of manufactured goods.  The export of wooden
furniture also stands out for its high level of dy namism.  Exports of wooden doors and windows, other
wood derivatives and glass bottles constitute the main products in the "Other Semi-Manufactures"
group which accounts for 22 per cent of the exports of manufactured goods.  In the "Articles ofApparel" group, with 16 per cent of the exports of manufactured goods, exports of textile clothing,
particularly cotton, are important.  Chemicals (with 8 per cent) and textiles (with 3 per cent) increased
their proportion of the exports of manufactured goods.
- Export markets77. In 1998, the chief markets for Bolivian exports were the European Union (27 per cent), the
North American Free Trade Agreement (NAFTA) (20 per cent), the Andean Community (21 per cent)
and MERCOSUR (18 per cent).
78. The European Union is the main market for Brazil nuts and coffee (agricultural products),
zinc, silver and gold ore (mining industry) and wood derivatives, leather and clothing.  The UnitedStates, the chief market in NAFTA for Bolivian exports, bought mainly oil products and tin in
metallic form in addition to coffee and Brazil nuts;  gold jewellery was the most representative
product among the manufactured goods exported to that market, together with wood derivatives and
textile clothing, much sought after for its excellent quality.
79. Exports to the Andean Community are characteriz ed by the diversity of products, the chief of
these being soya beans, cotton, animal feed deri ved from soya bean and sunflowers, edible oils
derived from these products also, and meat and ot her food products.  Exports to MERCOSUR (mainly
Brazil and Argentina) are focused on natural gas, wood and its derivatives, tinned hearts of palms,
textile clothing and agricultural products.WT/TPR/G/57 Trade Policy Review
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(iii) Development of the trade policy
80. Since the presentation of the First Trade Policy Review in March 1993, Bolivia has
maintained the central character of its trade policy consisting of free trade in goods and services.  It
does not require prior permits or licences except in cases where there is danger to human, animal and
plant health or to the security of the State or the nation's artistic and cultural heritage.  In general,
trade policy does make use of subsidies of any kind to favour any sector of the economy.  In otherwords, there is no discretionary power whatsoever.
81. In accordance with the principle of tax neutrality, attempts have been made to eliminate any
anti-export bias so as to place the domestic exporter in a position similar to that of his competitors.
To avoid excessive fiscal expenditure and subsidies, policies of refunding indirect taxes and duties to
exporters are used.
- Export regime
82. International trade plays an important part in Bolivia's growth strategy, the expansion and
diversification of exports and the input of FDI being particularly important for the sustainability of the
balance of payments.
83. The general export regime is regulated by Law 1489 of 1993 which establishes, among other
principles, tax neutrality for exports through the refund of domestic taxes under the system of tax
credit-debit in the case of VAT and the refund of import duties paid on purchases of inputs used for
the production of exportable goods.  Law 1963 of March 1999 amended two articles of Law 1489 in
order to improve tax neutrality for exports.
84. Supreme Decree No. 23944 establishes a simple  and automatic mechanism for the refund of
duties, with fractions of 2 per cent and 4 per cent of the f.o.b. export value for products valued at less
than US$3 million.  The method employed to determine the refund of duties for products with valuesabove US$3 million involves the use of technical coefficients calculated on the basis of the cost
structure of each enterprise.
85. In addition to the general regime, there are two special regimes:  the Temporary Import
Regime for Export Promotion (RITEX) and the Free Zones Regime.  Through the RITEX, established
in early 1997 by Supreme Decree No. 24480, enterpri ses can bring in raw materials and intermediate
goods without paying customs duty or domestic taxes for a maximum period of 120 days, during
which time they must produce and export the final goods;  otherwise, they must pay the suspended
taxes.
86. The Free Zones Regime, based on the principle of customs and fiscal segregation, was
adopted to promote industrial and trade development,  taking advantage of the competitiveness arising
from the low costs of some inputs, and to generate employment and favourable conditions for local
and foreign investment.  The free zones are administered by private companies which are given a
concession for 40 years.  Although this is a mechanism that has been quite successful in promoting
exports in other countries, it has not had the expected results in Bolivia.  At the moment, only a single
industrial free zone is operating.
87. In 1992, the Single Export Window System (SIVEX) was established to centralize and
simplify export formalities.  There are still some formalities however (sanitary and health certificates,
etc.) which are the responsibility of other departments.  Attempts are being made to find ways of
incorporating these into SIVEX so as to facilitate export formalities.Bolivia WT/TPR/G/57
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88. Supreme Decree No. 24756 of 31 July 1997 abolished the compulsory surrender of the
foreign exchange earned by exports.
- Import regime
89. The import regime is regulated by Supreme Decree No. 24440 of December 1996, which
establishes free importation without any prior licensing, import quotas or other non-tariff measures
affecting the import of marketable goods.
90. Tariff policy establishes the application of a uniform general ad valorem  tariff of 10 per cent
on the c.i.f. value for the tariff universe.  However, there is a tariff level of 5 per cent for a list of
capital goods and books and publications are subjected to a rate of only 2 per cent for servicesrendered.  This is a simple and practical system which allows for greater transparency in import and
tax recovery activities.
- Institutional framework of foreign trade policy
91. Since 1993, there have been some important changes in the institutional structure of Bolivia,
mainly through the restructuring of the executive branch by Laws Nos. 1493 of 17 September 1993and 1788 of September 1997.  The latter established the present organic and functional structure of the
executive branch.
92. With respect to specific policy in the institutional field of foreign trade, the reform established
the Ministry of Foreign Trade and Investment, which formulates and executes export and investment
policies and the National Export Council (CONEX), whose duty it is to suggest to the executive
branch the adoption of export policies, programmes and strategies.  This Council is made up of
institutions competent in foreign trade from the public and private sectors.
93. The new organization of the executive branch made it necessary to abolish the Ministry
Without Portfolio responsible for capitalization, of which the Public Enterprises Reorganization Unit
had been a part.  This Unit became a dependency of the Ministry of Foreign Trade and Investment -
Vice-Ministry of Investment and Privatization.
94. The National Export Promotion Institute (INPEX) was replaced by the Promotion Centre of
Bolivia (CEPROBOL), which has th e task of promoting productive development and competitiveness,
increasing and diversifying exports and encouraging private and foreign investment.
95. In addition, the Ministries of External Relations and Worship;  Finance;  Justice and Human
Rights;  Economic Development;  Sustainable Development and Planning;  and Agriculture,
Livestock and Rural Development carry out specific duties within their areas of competence inconnection with Bolivia's foreign trade.
(iv) Economic integration
96. Bolivia, through its geographical location in South America, has a triple projection:  towards
the Pacific Ocean to the west;  the River Plate Basin to the south-east;  and the Amazon Basin in the
north-east of its territory.  As a result, it participates in all of the integration processes taking place inthe region.
97. At the regional level, Bolivia is a founder member of the Latin American Integration
Association (LAIA) established by the Treaty of Montevideo in 1980, within the framework of which
it has signed a series of regional- and partial-scope agreements.  Participation in this regionalWT/TPR/G/57 Trade Policy Review
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integration scheme has made it possible to create, together with the other member countries, a broad
legal and institutional structure which is becoming an important reference point for various bilateral,
regional and hemispheric negotiations.  In this context, Bolivia has, since 1993, concluded various
agreements, particularly the following:
- Economic Complementarity Agreement (ACE) No. 22 with Chile, which has been in
force since 6 April 1993, provides for the liberalization of trade in lists of products ofinterest to both countries.  Negotiations are currently being held in order to extend its
scope with a view to reaching a free-trade agr eement.  Bolivia is participating in these
negotiations primarily in order to improve access conditions for its products to the
Chilean market and thus redress its bilateral trade balance, which has been highly
unfavourable until now.
- The Free-Trade Treaty with Mexico, Economic Complementarity Agreement (ACE)
No. 31, entered into force on 1 January 1995.  This instrument provides for the setting
up of a free-trade area within a period of ten years, and includes commitments in all
the disciplines of international trade in goods and services.
- Economic Complementarity Agreement (ACE) No. 36 between Bolivia and the
MERCOSUR member States has been in force since 28 February 1997 and has the
objective of forming a free-trade area between the two parties, to be established for
ninety per cent of trade in 2006 and, for the rest, in gradual instalments up to its
completion in 2014.  ACE 36, which gives Bolivia the status of Associated Member
of MERCOSUR, has brought about a rapprochement  with this integration bloc above
and beyond purely trade concerns and is gradually leading to commitments in the
political, social and cultural areas.
- Partial Scope Agreement (AAP) No. 34 between Bolivia and Cuba has been in force
since 25 April 1997.  The objective of the Agreement is to accelerate the generationand growth of trade flows and to adopt measures and actions to achieve closer
economic relations.
98. Bolivia has been a member of the Andean integration process since it was launched in 1969,
and in that framework has participated fully in th e free-trade area which entered into force in 1992
and in an Andean customs union which is in the process of being completed.  In 1996, the creation of
the Andean Community and the establishment of the Andean Integration System comprising the
political organs, deliberative and judicial, and the social conventions, consolidated this process and
made it possible to begin addressing more advanced stages of integration.
99. On the basis of these results, the Andean Presidential Council of Guayaquil, in 1998, decided
to complete the process of subregional integration with the formation of a common market.  One year
later, the Andean Presidential Council, meeting in Cartagena to celebrate the thirtieth anniversary of
the Agreement, ratified this commitment and entrusted the political organs of the Andean Integration
System with specific tasks aimed at creating a fully-operational common market by 2005 at the latest.
100. In the Latin American integration process, Bolivia, owing to its geographical location and its
links to the two subregional integration schemes in force in South America, the Andean Community
of Nations and MERCOSUR, has played an articulating role which takes on greater significance if webear in mind that Bolivia's objective is to promote the establishment of a common market in Latin
America.Bolivia WT/TPR/G/57
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101. Apart from the eminently economic and trading dimension, this articulating role is also of
significance in the introduction of the so-called export corridors through the physical interconnection
of the Atlantic and Pacific oceans across Bolivian territory.  Bolivia is also gradually assuming the
role of centre for energy distribution in the region.
102. Likewise, Bolivia participates actively in the negotiations on the Free Trade Area of the
Americas (FTAA).  It coordinates its positions with those of the member countries of the Andean
Community in order to be able to participate fairly  in the process in spite of its status as a country
with a small economy.
103. The physical integration process introduced by the countries of the River Plate Basin Group
with the signing of the Treaty of Brasilia in 1969 is a highly important project for Bolivia owing to the
prospects it offers for the development of its physical infrastructure, essentially in connection with
foreign trade.  In this context, the development of the Paraguay-Paraná Waterway, of which Bolivia is
the chief promoter, will enable it to direct a significant and growing volume of its trade overseas,
across the Atlantic Ocean.
104. A cooperation scheme of the utmost importance in which Bolivia is a participant is the
Amazon Cooperation Treaty signed in 1978.  This treaty is designed to promote physical integration,
preservation of the environment and sustainable development.  Its membership comprises the
countries of the Andean Community, Brazil, Guyana and Surinam.
105. Bolivia receives temporary unilateral tariff preferences from the United States under the
Andean Trade Preference Act (ATPA), and from the European Union under the Generalized System
of Andean Preferences.  Both of these mechanisms were introduced to help the country combat drug
trafficking.  At the same time, Bolivia benefits from generalized systems of preferences applied by
Canada, Japan and other developed countries.
IV. BOLIVIA AND THE WTO
(i) Bolivia and the multilateral trading system
106. Bolivia was one of the first countries in the re gion to implement, over the last ten years, an
economic policy of unilateral opening up and structural change based on the free-market model.
107. In the conviction that trade liberalization should become a tool in the strengthening of
development and not only in the extension and diversification of trade, Bolivia has supported the
agreements resulting from the Uruguay Round by signing the Marrakesh Final Act on 14 April 1994
and ratifying the Agreement Establishing the World Trade Organization, becoming a WTO Memberon 14 September 1995.
108. In order to respond adequately to the new international rules and effectively apply its WTO
commitments, Bolivia launched a process of institutional reform and drafting of domestic laws and
regulations.
(ii) Application of the WTO Agreements
109. One of the great challenges in applying the WTO Agreements arises from the need to adjust
domestic legislation to the commitments entered into.  This involves the hard task of adjustment and
of preparing specific sets of rules for the application of each of the Agreements as well as establishing
domestic machinery to meet the requirements.WT/TPR/G/57 Trade Policy Review
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110. Bolivia established an interinstitutional mechanism to enable it to assess and follow up the
implementation of the commitments arising from the agreements, produce the notifications, adjust and
draw up national rules and coordinate the country's participation in negotiations.  Considerable
progress has been made in this respect, in some cases reflected in modifications of the country's legal
structure.  However, sustained cooperation and technical assistance will be needed to supplement this
effort.
111. As regards the Agreement on Agriculture, and in accordance with its economic policy
approach, Bolivia, while not rejecting the margins established in the Agreement, does not give
subsidies or domestic support to producers in the sector.
112. The integration of products of the textiles and clothing sector into the WTO rules is taking
place according to the established guidelines.  No quotas or para-tariff measures are applied toimports.
113. Bolivia has no non-preferential rules of origin.  In its regional and bilateral trading
relationships, the rules of origin applied are those provided for in each agreement.  Neither judicial
decisions nor generally applicable administrative rules have been handed down.  In the case of
government procurement, there are no special provisions regulating the classification of the origin ofgoods.
114. It applies the procedures and time-periods established in the Agreement on Import Licensing
Procedures to products affecting public health or the security of the State and for the purpose of
protecting the nation's artistic and cultural heritage.
115. In order to implement the country's commitments under the Agreement on Technical Barriers
to Trade, the Bolivian Standardization, Metrology,  Accreditation and Certification System (SNMAC)
was established for the chief purpose of promoting the competitiveness and quality of Bolivian goodsand services in national and international markets, to guarantee human, animal and plant health and
safety and to ensure protection of the environment and the consumer.  The regulatory organ is the
National Quality Council;  the executive organs are the Bolivian Institute of Standardization and
Quality (IBNORCA), the Bolivian Institute of Metrology (IBMETRO), and the Bolivian
Accreditation Organization (OBA).  The adoption and application of technical standards in Bolivia is
governed by the Code of Good Practice of the Agreement on Technical Barriers to Trade.
116. Preshipment inspection of imports is carried out by inspection companies, under contract to
supply the specialized services needed to control quality, quantity, price and customs classification.
All imports are subjected to customs inspection according to the f.o.b. value.  However, some
products are subjected to price and quantity controls but not to quality inspections, whereas others,such as donations, diplomatic imports and imports covered by special laws, are exempted from price,
quality and quantity controls.
117. Customs assessment is temporarily the responsibility of the foreign trade inspection
companies.  Customs value is currently determined on the basis of prices on the international market.
The regulation permitting the implementation of Article VII of GATT 1994 is now in preparation.
118. As regards safeguards, the rules deriving from the integration agreements, whether
multilateral (Andean Community and LAIA) or bilateral (MERCOSUR, Mexico and Chile), are in
force.  Although Bolivia has not applied safeguard measures, it has reserved the right to apply the
transitional safeguard mechanism provided for in the Agreement on Textiles and Clothing.Bolivia WT/TPR/G/57
Page 19
119. A specific legal framework has been defined for the application of sanitary and phytosanitary
measures which establishes a variety of requirements and involves the presentation of specific health
certificates according to the product concerned.  The organization responsible for notification under
the Agreement is currently the National Directorate for Production and Agricultural Protection.However, the regulation creating the Agriculture and Livestock Health Services, an entity which
should improve sanitary and phytosanitary procedures, has been submitted for legislative approval.
120. With respect to the Agreement on Subsidies and Countervailing Measures and the
implementation of Article VI of GATT 1994, Bolivian legislation provides for procedures to apply,
after verification, the appropriate countervailing measures or anti-dumping duties.  This legislation isbeing brought into line with the provisions of GATT 1994.
121. Bolivia attaches high priority to the attraction of investment and has been one of the pioneers
in updating its legislation in that regard.  The conventions on the promotion and reciprocal protection
of investments signed by the country enshrine the principle of national treatment and the
most-favoured-nation clause and guarantee the full exercise of every economic activity, provided it isa lawful one.  In this way, the provisions of the Agreement on Trade-Related Investment Measures are
fulfilled.
122. In the framework of trade in services, Bolivia has played an active part in the negotiations on
basic telecommunications and on financial services.  In the first case, it signed and ratified its national
offer, while in the second, it submitted its Schedule of Specific Commitments, and is currentlybringing its offer into conformity 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.
123. In the area of the protection of intellectual property rights, Bolivian law makes provisions for
the country's international commitments assumed in the framework of the WTO, WIPO and the
Andean Community.  However, a draft Special Law on Intellectual Property is being processed which
will bring current legislation up to date by incorp orating the new areas of protection provided for in
the TRIPS Agreement.
(iii) Boliva's position regarding future negotiations
124. Bolivia reaffirms its political will to support the strengthening of the multilateral trading
system within the framework of the WTO on the understanding that this system will contribute to
reducing the asymmetries in the levels of development of its Member countries.  In agreeing to the
creation of the WTO, Bolivia did so in the conviction that is was necessary to establish mechanisms toensure the full incorporation and active participation of the developing countries in world trade,
particularly the countries with small economies.
125. It must be stressed that thus far, the application of the WTO commitments has had a multitude
of political, economic, and social costs which have not been offset by an increase in Bolivia's share in
world trade.  Indeed, the country has encountered a variety of problems in obtaining access for itsagricultural, textile and mineral production, inter alia , to the markets of the developed countries
owing to the restrictive policies applied in the form of administrative and technical barriers, subsidies
and high tariffs.
126. Bolivia is of the opinion that the WTO and other international organizations must redouble
and coordinate their efforts to ensure the complete application of the Marrakesh Agreements and mustprovide the technical and financial support needed for that purpose by the developing countries,
particularly the small and vulnerable countries.  Bolivia is concerned at the apparent deterioration in
international cooperation.WT/TPR/G/57 Trade Policy Review
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127. It also hopes that other Members will as soon as possible adopt policies of opening up similar
to those adopted by Bolivia so as to bring about a more fluid, transparent and balanced trade in goods
and services in accordance with the Organization's central objectives.
128. Finally, Bolivia considers that the negotiations should guarantee the principle of consensus as
the only way of ensuring effective compliance with the commitments assumed within the WTO.
-A g r i c u l t u r e
129. Bolivia will continue its policy free from subsidies and other measures which distort
agricultural trade.  It will do its utmost, in that  respect, to ensure the practical application of the
agreements reached within the framework of the WTO and to contribute to the successful outcome of
the forthcoming negotiations.  It believes that these negotiations should seek to eliminate restrictivemeasures and practices and establish transparent trade rules leading to fair competition.
- Electronic commerce
130. Bolivia believes that the WTO Secretariat should continue to analyse the ways in which the
various WTO Agreements and their respective work programmes are connected to world electroniccommerce.  There is an unequal participation of the countries in this area, aggravated by the deep
disparities in infrastructure development and in both technical and economic access thereto.
131. Bolivia, as a developing country, is paying particular attention to the question of access to
sources of information and know-how through electr onic commerce.  The potential implications and
consequences of electronic commerce present a challenge for the country in both economic and legal
terms.
(iv) Directions of trade policy
132. Bolivia is determined to maintain and deepen tr ade liberalization so as to contribute to the
increase in levels of investment, technological innovation, productivity, and hence competitiveness, a
policy which is in keeping with the principles of the WTO.
133. In addition, Bolivia will encourage private investment in physical infrastructure in an effort to
develop the potential offered by its geographical position.  At the same time, it will step up its effortsto ensure that products meet the conditions required by international technical and quality standards in
order to improve its competitiveness in foreign markets.
134. In its international trade negotiations, Bolivia will defend transparency, fluidity and genuine
opening up of trade in goods and services as well as investment.  It will endeavour to prevent recourse
to practices which are restrictive or which give rise to imbalances in market access opportunities.
135. Among the actions which it proposes to develop are infrastructural investment to eliminate
operational obstacles, trade research and development efforts, support for the local and municipal
authorities in the regions in developing small- a nd medium-sized enterprises (SMEs) and the granting
of facilities to enable them to promote private inve stment in the regions with a view to foreign trade.
V. CONCLUSIONS
136. As will appear from the review of the situation set out in this document, Bolivia has complied
with all the agreements it has entered into with the WTO.Bolivia WT/TPR/G/57
Page 21
137. Bolivia has shown a high degree of openness, and has strengthened and consolidated this
openness through the policies and reforms applied in recent years;  but this general policy has not met
with the hoped-for reciprocity from other economi es, which have continued to raise barriers of
various kinds to Bolivian exports.
138. In keeping with its policy of opening up to trade, Bolivia has been very actively seeking an
enlargement of markets in the framework of regional and hemispheric integration.
139. The drastic adjustment policies and reform programmes carried out by Bolivia have still not
produced the hoped-for effect of achieving the desired economic and social development, and in
particular the elimination or relief of poverty.  These are both high priorities in the Economic andSocial Development Plan.
140. However, despite the crises, Bolivia has succeeded in maintaining the stability of its economy
and in increasing its growth rates.
141. Through successive reforms, Bolivia has changed its legal and institutional structure and is
continuing, in this context, to adopt regulatory and procedural measures designed to structure aflexible and efficient operative system.
142. Bolivia is complying with the WTO Agreements in spite of its financial, institutional and
human resources limitations.  However, its efforts in this respect have not been offset in terms of
share in international trade, nor have they contri buted to reducing the imbalances and asymmetries it
has encountered on the international economic scene.
143. Bolivia's adherence to the new system of international trade, its unilateral policy of openness
and the discipline it has imposed upon itself in order to implement the WTO principles and
agreements have not produced results that enable it to overcome the imbalances and asymmetries
which have become more acute in the world economy.
__________