On November 1, 2008, Bolivian President Evo Morales announced an indefinite suspension of U.S. Drug Enforcement Administration (DEA) operations in Bolivia after accusing some DEA agents of espionage. On October 21, 2008, after a multiparty congressional commission agreed to over 100 changes to the draft text passed by the Constituent Assembly in December 2007, the Bolivian Congress ratified the new draft constitution and passed a law that will enable a referendum on that constitution to be held on January 25, 2009. As enacted, P.L. 110-436 extends Andean trade preferences until December 31, 2009 for Colombia and Peru, and until June 30, 2009 for Bolivia and Ecuador. On September 26, 2008, President Bush directed the United States Trade Representative to publish a public notice proposing to suspend Bolivia's Andean Trade Promotion Act (ATPA) benefits because of the Morales government's failure to cooperate in counternarcotics matters. On September 10, 2008, President Morales accused the U.S. Ambassador to Bolivia, Philip Goldberg, of supporting opposition forces, declared him persona non grata, and expelled him from the country. Two opposition prefects were voted out of office. Political Situation

		Morales Administration

In December 2005, Evo Morales, an indigenous leader and head of Bolivia's coca growers' union, and his party, the leftist Movement Toward Socialism (MAS), won a convincing victory in Bolivia's presidential and legislative elections. Opposition delegates in the assembly pushed for increased regional autonomy from the central government. President Morales put his plans to convoke a national referendum on the draft constitution on hold until after a national recall referendum was held on August 10, 2008 to determine whether he and the prefects should remain in office. The country was split as the four wealthy eastern provinces voted strongly in support of increased autonomy, while the other five provinces opposed the measure. According to the constitutional accord approved by the Bolivian Congress on October 22, 2008, the autonomy statutes drafted by the eastern departments will have to be brought into compliance with the new constitution. U.S. officials expressed concerns about the Morales government's commitment to combating illegal drugs, its ties with Venezuela and Cuba, and its nationalization of Bolivia's natural gas industry. In 2007, there continued to be periodic friction in U.S.-Bolivian relations. Bilateral relations reached their lowest point in recent memory in mid-September 2008, when President Morales accused U.S. Within a day, the U.S. State Department followed suit, expelling Bolivia's U.S. Ambassador. This willingness has been replaced by increasing frustration on the part of the U.S. government with Bolivia's counternarcotics efforts. On September 16, 2008, President Bush determined that Bolivia, along with Venezuela and Burma, had failed demonstrably to live up to its obligations under international narcotics agreements, but waived sanctions so that U.S. bilateral assistance programs could continue. In FY2008, Bolivia received an estimated $99.5 million, including roughly $47.1 million in counternarcotics assistance. A continuing resolution ( H.R. 2638 / P.L. 110-329 ) will provide funding for U.S. programs in Bolivia at FY2008 levels through March 6, 2009. On November 25, 2008, President Bush announced his decision to suspend Bolivia's ATPA benefits effective December 15.
Bolivia has experienced a period of political volatility, with the country having had six presidents since 2001. Evo Morales, an indigenous leader and head of Bolivia's coca growers' union, and his party, the leftist Movement Toward Socialism (MAS), won a convincing victory in the December 18, 2005, presidential election with 54% of the votes. Early in his term, President Morales moved to decriminalize coca cultivation and nationalized the country's natural gas industry. His efforts to reform the Bolivian constitution have, until recently, been stymied by a strong opposition movement led by the leaders (prefects) of Bolivia's wealthy eastern provinces who are seeking greater regional autonomy.
In December 2007, the Constituent Assembly elected in mid-2006 passed a draft constitution without the presence of opposition delegates. In late August 2008, President Morales, buoyed by the strong support he received in a national recall referendum held on August 10, 2008, proposed to convoke a referendum on the draft constitution in December 2008. He later agreed to seek congressional approval for that referendum. Several opposition prefects were angered by Morales' proposal, and launched protests and blockades, which turned violent in mid-September. On October 20, 2008, after multiparty negotiations on the draft constitution's text, the Bolivian Congress approved legislation convoking a constitutional referendum on January 25, 2009. The new constitution was approved by a 61% to 39% vote following a peaceful election. Four eastern provinces, however, all voted against the constitution suggesting a strong possibility of continued opposition and discord.
U.S.-Bolivian relations have been strained by the Morales government's drug policy and its increasing ties with Venezuela. Bilateral relations hit their lowest point in recent memory on September 10, 2008, when President Morales accused the U.S. Ambassador to Bolivia of supporting opposition forces and expelled him from the country. The U.S. government responded by expelling Bolivia's U.S. Ambassador. On September 16, 2008, President Bush designated Bolivia as a country that had failed to live up to its obligations under international narcotics agreements. That decision was closely followed by a Bush Administration proposal to suspend Bolivia's trade preferences under the Andean Trade Preferences Act (ATPA). On November 1, 2008, Bolivian President Morales announced an indefinite suspension of U.S. Drug Enforcement Administration (DEA) operations in Bolivia after accusing some DEA agents of espionage.
Concerns regarding Bolivia in the 110th Congress focused largely on counternarcotics and trade issues. Bolivia received an estimated $99.5 million in U.S. foreign aid in FY2008, including roughly $47 million in counternarcotics assistance, significantly lower than in previous years. An enacted continuing resolution H.R. 2638/P.L. 110-329 will provide funding for U.S. programs in Bolivia at FY2008 levels through March 6, 2009. In October 2008, Congress enacted legislation to extend ATPA trade preferences for Bolivia until June 30, 2009 (P.L. 110-436). However, on November 25, 2008, President Bush announced his decision to suspend Bolivia's ATPA trade preferences effective December 15, citing Bolivia's failure to cooperate with the United States on counternarcotics efforts. The 111th Congress is likely to continue to focus on trade and drug issues as these concerns remain central to U.S. relations with Bolivia.