Daily Archives: March 10, 2012

Bolivian jewelry exports’ decline

Unfortunately, one of our best alternatives of value added exports is in decline, it worries more the almost 60% reduction in volume, not so much in the dollar amount, as the increase in gold’s prices tends to offset the latter. Pagina Siete reports:

The export of articles of jewelry was reduced by 58% in volume and by 25 percent in value since 2008, when USA suspended tariff preferences to Bolivia. [ATPDEA]

In 2008, the export of jewelry reached an approximate value of 71.2 million dollars and a volume of 19 tons; amount and quantity which were reduced to reach last year 53 million dollars in value and eight tons in volume, i.e. a reduction of 25% and 58%, respectively, according to data from the Bolivian Institute of foreign trade (IBCE) that takes as a source the National Institute of Statistics [INE].

The representative of the Federation of Private Businessmen in La Paz, José Alfredo Leon, explained that this reduction occurs as the effect of the loss of trade treaties that favored the country, such as the law of Andean trade promotion and drug eradication (ATPDEA, in English), [was the source] that mainly affected the cost of production.

Domestic producers must pay 5.5% of tariff, while Peru, Colombia, Ecuador have zero tariff. [as a result of our increased coca leaf and cocaine production and commercialization]

The Chamber of Exporters (CAMEX) reported last year that the decline in sales has to do, in addition to the loss of the ATPDEA, with the increase in the price of the raw material, the gold and silver, and the economic crisis in Europe and the USA.

It [jewelry exports] was also struck by the lack of renewal of the Generalized System of Preference (GSP). [Bolivia falls under the Andean Trade Preference Act]

However, Leon argued that, since prices are high in the external market, employers in the sector gave ways to continue to sell to the USA by other countries such as Peru or Chile. “The US market has always been attractive, despite the fact that certain tariff preferences are now lost, but you know that the mining and gold market has margins that still lead, probably not with the force that was when there was a difference in the tax, but have begun to present other opportunities”, he explained.

The main market for jewelry items is still the USA. Only in 2011 more than 90% of sales were made to the market in that country.

Through other Nations

According to the version of León, while Bolivian producers sold in the U.S., the Bolivian production doesn’t reach “with its own brand (made in Bolivia), but by our trading partners, which are neighboring countries”.

Countries which export articles of jewelry are Chile and Peru, that have signed free trade agreements with the United States. “Part of our production is coming out by Chile, the same is happening with Peru,” he said.

Ideally, said, is that Bolivian exporters will sell directly to the USA, but at this time there are no conditions in terms of market nor political affinity which may become a reality in trade agreements.

With tariff preferences, Bolivia could have been at the top of the jewelry sector, remarked the businessman.

http://www.paginasiete.bo/2012-03-09/Economia/Destacados/10Eco01090312.aspx

Another of the failures of current government’s needed policies/actions to secure markets for value added with competitive Bolivian production.