Last month when Bolivian President Evo Morales declared the U.S. Ambassador, Phillip Goldberg, 'persona non grata', the international media and diplomatic reviews were decidedly negative.

The editors of the New York Times declared, "We understand why the Bush administration and Congress are fed up with Bolivia’s president." A few hours south at the Washington Post, editors there described the ouster of Mr. Goldberg as the expulsion of, "a respected professional, on the spurious grounds of fomenting rebellion."

Meanwhile, the Bush administration reaction was starker still.

State Department spokesman Sean McCormick declared, "President Morales’ action is a grave error that has seriously damaged the bilateral relationship. The United States is the largest single country provider of development assistance to Bolivia, is Bolivia’s largest export market, and is the major provider of counternarcotics assistance."

[He got the export market wrong. Brazil and Argentina are much bigger importers of Bolivian products, including energy.]

Then the Bush administration started swinging some bats of its own. It ousted Bolivia's Ambassador to the U.S., yanked out the Peace Corp, and then pulled out what it thought was its biggest bat of all. In an announcement President Bush made himself, the administration announced that it would remove Bolivia from the ATPDEA trade program responsible for at least 20,000 Bolivian jobs.

The administration's message to President Morales was clear – you mess with us and we mess with you – the diplomatic version of a schoolyard shoving match in which the bigger boy wins. Mr. Morales and his Bolivian cohorts were to be taught a lesson about uneducated diplomacy.

The Art of Shooting Oneself in the Foot

But which country is really losing the diplomatic tussle?

First, let's be clear. Bolivia is not very important to the U.S. It is not a major energy contributor to the U.S., like Venezuela. It is not home to many big U.S. corporations, like Brazil. It isn’t a major source of immigrants, like Mexico. In the scheme of U.S. diplomatic priorities, Bolivia rates somewhere between Paraguay and Palua, i.e. not all that important.

To the extent that the U.S. does care about Bolivia diplomatically, it really has just three goals:

1. Keep Bolivia from establishing even deeper relations with Venezuela and President Hugo Chavez

2. Keep Bolivia from becoming, as it was in the 1980s, a major source of coca for cocaine production (that production has mostly relocated to the U.S. biggest ally on the continent, Colombia).

3. Try to improve the U.S. miserable image in the region (according to surveys, President Bush's popularity in the region now languishes at rock bottom, beside that of Fidel Castro).

So, given those goals, how does the Bush administrations new Bolivia doctrine of economic retaliation stack up?

Well, yesterday President Chavez was back in La Paz again. He and President Morales put pen to a new agreement in which Venezuela will take up some of the slack from the U.S. cancellation of Bolivia's participation in ATPDEA. Chavez pledged to open up Venezuelan markets to a big chunk of the textile exports that the Bush administration now says it doesn't want. So if someone in the State Department thought they were going to undermine the Morales/Chavez bond with the bigger-boy-in-the-schoolyard move, they might want to rethink that.

On coca, it doesn't take a rocket scientist to figure out that if you put 20,000 people out of work in a nation where honest economic opportunity is scarce, some of those people are going to drift in other directions. In Bolivia those 'other directions' often include migrating to the Chapare to grow coca that isn't destined for chewing or tea, but the illegal drug market. It was the destruction of much of Bolivia's mining industry in the 1980s that sent so many ex-miners into the coca-for-cocaine business two decades ago. So while the Bush administration claims that its goal here is to battle increased coca growing for drugs, its actual policies seemed aimed at sending former textile workers right in that direction. Truly intelligent.

Finally, if the Bush administration thinks that its retaliatory moves aimed at Morales have made the U.S. more popular in the region, it might want to take another look there as well. The real mark of declining U.S. influence in the region can be measured by the Chilean summit held by the South American presidents last montn, in response to the Bolivia crisis. The messages from the Presidents was clear – U.S., we do not want you in the room.

On this continent the U.S. is viewed as a contributor to problems, not an ally in finding solutions.

A Wiser Course

It is not a big surprise that the Bush administration would be ticked off, as it clearly was, by the ousting of its Ambassador to Bolivia. In another post we'll get into the question of what role Mr. Goldberg did or did not play in helping promoting civil unrest here last month – the Bolivian government's justification for sending Goldberg home.

But diplomacy is not about blowing off steam, it is about knowing national interests and using clear-eyed strategy as a vehicle for promoting those national interests.

Time and time again, not just in Latin America but globally, the Bush administration has shown itself to be tone-deaf to that basic fact. Now, in its closing days, the administration is not only repeating that mistake in Bolivia but also working hard to force the next President down the same path.

Congress made it clear that while it thought the threat of cutting Bolivia out of APTDEA might be a useful move at this time, actually doing so is the wrong thing to do right now. That's why, on a bipartisan basis, the Congress last month voted to extend Bolivia's participation until June 30, 2009, and leave it in the hands of the new administration to use the deadline as diplomatic leverage.

President Bush is using his executive powers to overrule that law.

Even that well-known Morales/Chavez/Castro radical, Republican Senator Richard Lugar of Indiana, knows that the Bush administration's APTDEA move is a diplomatic mistake. He declared so publicly last week, as he was traveling in Mexico with Secretary of State Condoleeza Rice.

At the same hour that the Bush administration was holding the public hearings required by law on its axe-Bolivia plan, in Mexico Rice declared, in effect, that the hearings and supposed process of public input was irrelevant. She announced again the administration's intent to end Bolivia's participation as soon as the required 30-day waiting period was over.

Senator Lugar quickly disagreed. "When Bolivia stands at the cusp of a new era, with a new constitution, U.S. assistance should be forthcoming as an effort to help Bolivia, and not to be an impediment to its progress," said the former Republican chairman of the Senate Foreign Relations Committee.

Both Senator Obama and Senator McCain have made a good deal the past few months about how they are different that President Bush. Senator Obama, in particular, has repeated over and over again his intention to establish a different kind of diplomacy if he is President, one based on more dialog and less retribution.

Reversing President Bush's certain removal of Bolivia from the APTDEA trade program may give him his first test to do that. And to show that, unlike his predecessor, during Diplomacy 101 he wasn't sleeping in class.