This all sounds familiar. A developed country uses illegal drug production/trafficking as a criterion for deciding which countries to include in a tariff preference program. The DS246 EC - Tariff Preferences case, brought by India? No, this time it's the United States excluding Bolivia from one of its preference programs.
In DS246, India complained because the European Communities gave preferences designed to help out countries experiencing drug problems, and included 11 Latin American countries and Pakistan in its proference program. India thought Pakistan's inclusion was unjustified (and was worried about the advantages Pakistani exports would have over Indian exports), so it brought a WTO complaint, which it won.
The Bolivia issue has parallels, but is slightly different. Here, the United States is excluding Bolivia from the Andean trade preference program on the basis that Bolivia is not doing enough to address its drug problems.
Bolivian President Evo Morales is not happy about the U.S. action:
"I'm disappointed ... because the Obama administration has used slander, lies and false accusations to suspend the preferential tariffs," said Morales, who threw out the U.S. ambassador to La Paz and American anti-drug agents last year.
"They said I shouldn't trust Obama ... I want to thank those people for giving me that advice," the former coca farmer told reporters.
I talked about the legal issues a (little) bit back here in relation to the possibility of excluding Ecuador from the program and also here in relation to Bolivia.
