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When US President Obama took office in January 2009, US relations with Bolivia had reached a historic low. In 2008, Bolivia’s President Evo Morales expelled the US Ambassador, accusing him of meddling in internal affairs. The US government responded by expelling Bolivia’s Ambassador to Washington. In the same year, President George W. Bush “decertified” Bolivia for not cooperating with the US in its counternarcotics efforts, which led to the suspension of US trade preferences for Bolivia. The Bolivian government, for its part, expelled the US Drug Enforcement Administration (DEA). US-Ecuadorian relations, by comparison, may have seemed smooth to the incoming Obama administration. Yet, again in 2008, the Ecuadorian government had broken off diplomatic relations with Colombia, the United States’s most important ally in South America. The US military base in Ecuador was about to be closed in 2009 because Ecuador’s President Rafael Correa had refused to extend a bilateral agreement with the US. In early 2009, Correa expelled two US Embassy officials, accusing them of interfering in internal security affairs. Since their initial election in 2005 and 2006, Morales and Correa have developed friendly relations with Venezuela and Cuba, and increased bilateral cooperation with countries like China, Russia and Iran. Upon assuming office, Obama promised to launch “a new chapter of engagement” with Latin America. This agenda included repairing relations with Bolivia and Ecuador, even if the two countries are relatively minor players in the region. The present report looks at the recent evolution in US relations with Bolivia and Ecuador with a view to both the Bush legacy and the first years of the Obama Administration. Given the broadly perceived failure of Bush’s Freedom Agenda and Obama’s declared goal of shifting from this confrontational approach to a strategy of global re-engagement, one should expect significant change in US policies toward these two countries too. Yet, as this PRIF report argues, the picture is remarkably different: On the one hand, the most important change in US policies toward Latin America had already occurred during the Bush Administration, more precisely in the first year of Bush’s second term (2005). For Bolivia and Ecuador this meant that the US reacted far less confrontationally to the election of Morales (December 2005) and Correa (November 2006) than most observers would have anticipated. US relations with Ecuador have been surprisingly smooth in spite of a series of political changes promoted by Correa that in earlier times very probably would have provoked serious US countermeasures. Even in the Bolivian case where bilateral relations have clearly suffered since the election of Morales, the US refrained from taking an openly confrontational stance, continued cooperation with Bolivia including with the central government, and, in the area of development aid and democracy assistance, showed remarkable flexibility in adapting to the Bolivian government’s demands. On the other hand, there is much more continuity than change in Obama’s policies toward the two countries. So far, the Obama Administration has largely continued the rather pragmatic policies of the later Bush years. In line with Obama’s general change in rhetoric there were some signals of openness for dialogue, especially in regard to Bolivia. But in areas of crucial concern for the Bolivian government, Obama has followed in Bush’s footsteps: He annually “decertified” Bolivia as failing in its counternarcotics policies, which meant Bolivia’s continuing suspension from trade preferences. The ongoing bilateral dialogues with both countries have yet to produce results that would mark a real difference from the Bush era. The present report proceeds as follows: Following overviews of political changes in Bolivia and Ecuador and of recent trends in US policy toward Latin America in general, it analyzes, first, how the US administration led by then President George W. Bush reacted to the election of Morales and Correa, who both openly challenged US interests in the two countries. Second, it looks at the Obama Administration in order to identify changes and continuities in US policy, as well as the implications these had for bilateral relations with the two countries. The report is mainly about empirically analyzing the evolution of US policies toward Bolivia and Ecuador. Yet, the comparative section will also present some tentative explanations that point to two types of limits that characterize contemporary US policies toward Latin America. First, democratically elected governments which are based on broad popular support make it hard for any US government to justify openly confrontational policies – in particular, given a contemporary regional context characterized by strong Latin American support for elected governments. As long as there is general US interest in remaining engaged in a certain country, these circumstances then require the US to be much more flexible and tolerant than US governments in the region have been accustomed to historically. Second, some crucial and almost non-negotiable demands on the part of the US seriously limit this flexibility. In the cases at hand, this holds especially for counternarcotics. It is difficult to say whether Obama would be willing to acknowledge the failure of the “War on Drugs.” Yet, very clearly, he is very much dependent on not provoking resistance in the US Congress by touching on too many contentious issues at the same time. In a more general sense, important voices on Capitol Hill demonstrate that to be “too soft” on Morales would create domestic problems for the administration.

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