Policy alternatives and strategies for the Plurinational State of Bolivia following the end of trade preferences

We evaluate some alternative and strategic policies for the Plurinational State of Bolivia following the ending of preferences under the Andean Trade Promotion and Drug Eradication Act (ATPDEA), especially the possibility of the country joining the talks on the partial agreement negotiated between the Andean Community countries and the European Union under a variety of formats (full liberalization or partial liberalization that excludes sensitive products). The study concludes that for the Plurinational State of Bolivia, being part of an Andean Community-European Union (AC-EU) agreement is a better alternative than maintaining the status quo whereby the country benefits from the enhanced generalized preferences granted to it by the EU (GSP+). However, there is a need for complementary measures to ensure that the benefits of trade are inclusive, as the gains are largely confined to higher-income segments of the population and so do not necessarily do anything to reduce the current unequal pattern of income distribution.