Foreign Relations of the United States, 1977–1980 Volume XXIV, South America; Latin America Region

154. Telegram From the Embassy in Bolivia to the Department of State¹

La Paz, March 3, 1980, 2300Z

1881. Ref: (A) Boeker-Watson Telecon of 22 February 29,² (B) La Paz 1259,³ (C) La Paz 0798.⁴

1. (C–Entire text)

2. Summary: President Gueiler is extremely grateful that the US Tin Disposal Policy reflects Bolivia’s request, that sales begin no sooner than July. She expressed particular appreciation for the efforts of the Secretary and Ambassador Boeker.

3. President Guieler responded immediately to my request to see her and received me at 5:00 pm local time. I told her that we would announce our Tin Disposal Policy in Washington this evening at 7:00 p.m. La Paz time. I advised her that the Secretary of State had considered very carefully the two requests she had made concerning our Tin Disposal Policy and had taken them up with GSA. After lengthy discussions, I said, the USG had acceded to her first request—that the initiation of sales from our stockpile be delayed until after the Bolivian elections June 29; sales would begin July 1. I emphasized that this decision was reached solely because she had requested it.

4. We found, however, that we could not agree to her second point—to limit sales to no more than 300 tons a month for the first twelve months, I told her, explaining that offerings would be at a bi-weekly rate of 500 tons. The total for the first year would be 10000 tons. I stressed that the Secretary himself will monitor very closely the tin sales and their impact on the market and that any change in the rate of offerings would be agreed to by the Department as well as GSA. There will be no abrupt changes. Moreover, if there was a break in the price, the situation will be reviewed by both agencies.

5. I explained the rationale behind announcing today sales which will begin only four months from now. We believe that such an announcement will contribute to market stability and reduce or eliminate the impact the beginning of sales will have on the market in July. Over the next four months the market will discount those sales. Moreover, I added, the market probably has already discounted the sales, perhaps even on the assumption they would begin before July. Therefore, tonight’s announcement probably will have little impact on the price in the near future.

6. Noting that predicting what will happen in commodity markets is virtually impossible and that there were many factors besides the GSA sales affecting the international market for tin, I said that we believe we have made a very honest effort to adopt a policy which takes Bolivia’s interests adequately into account and which will have a minimal affect on the market. I added, that our announcement would make no reference to consulatations with any particular country, only that we had consulted with consumers and producers through the ITC. As far as we were concerned, I said, she could play the issue any way she wished with her people. I did express a hope, however, that our efforts would not be received by hostile demonstrations.

7. President Gueiler was deeply relieved that we had accepted her first point and expressed no concern that we failed to meet her second one. This kind of support from friendly countries was heartwarming, she indicated. She was particularly appreciative of the personal efforts of the Secretary and Ambassador Boeker.

8. The President implied that she would not make any public references to her consultations with us, but she probably will point out that delaying initiations of sales until July is clearly in Bolivia’s interests. She said she would contact the COB to try to assure there would be no demonstrations.

Watson

1. Source: National Archives, RG 59, Central Foreign Policy File, D800111-0261. Confidential; Niact Immediate; Exdis.
2. No record of the February 22 conversation between Boeker and Watson has been found.
3. In telegram 1259 from La Paz, February 12, the Embassy reported that Gueiler had emphasized that her first point on tin sales “was the most important to Bolivia,” and that “she herself in consulting with the U.S. had taken a great political risk, against the grain of Bolivia’s traditional position.” (National Archives, RG 59, Central Foreign Policy File, D800075-1073)
4. In telegram 798 from La Paz, January 29, the Embassy reported that the Bolivian government had two proposals for the U.S. tin disposal program: “A. That disposals not begin until the second half of 1980, and B. That disposals during the first year be limited to 300 tons per month.” (National Archives, RG 59, Central Foreign Policy File, P870095-0297)