With the Obama administration's policy toward Venezuela pretty much decided, and the embargo on Cuba considered untouchable because no one is willing to risk losing support among Cuban-Americans in the swing state of Florida, that leaves Bolivia as a left government in the region where the hostility of the Bush administration could be quickly reversed.
However, there are a number of outstanding issues between the two countries. The United States and Bolivia currently do not have ambassadors. Bolivia expelled the US ambassador on 10 September, on the grounds that he and Washington were intervening in Bolivia's internal affairs. Among other offences, the US embassy was caught trying to use Peace Corps volunteers and a Fulbright scholar for spying; US ambassador Phillip Goldberg had met privately with opposition leaders at a time when elements of the opposition were engaged in destabilising violence; and the US seemed to lend tacit support to the Bolivian opposition by not condemning this violence or even offering condolences when dozens of government supporters were massacred in Pando on 11 September.
The Bush administration responded to the expulsion of the US ambassador by expelling Bolivian ambassador Gustavo Guzmán. But there are also other important issues for Bolivia. On 26 September, the Bush administration suspended Bolivia's trade preferences under the Andean Trade Promotion and Drug Eradication Act. The official reason was that Bolivia had not been cooperating sufficiently in the war on drugs. But according to the UN's 2008 report, Bolivia's coca cultivation had increased by just 5 per cent, compared to a 27% increase in Colombia, the biggest beneficiary of US aid in the region.
The Bolivians are eager to begin a new chapter of improved relations with Washington. To demonstrate this willingness, the Bolivian government refrained from filing a complaint at the World Trade Organisation (WTO) against the United States for the suspension of its trade preferences. Their legal case is quite solid: under WTO rules, countries are allowed to establish rules for preferential access to their markets, but the rules must be applied equally to all countries receiving the preferences. Before filing a complaint at the WTO, however, Bolivia wanted to see if the new administration is interested in improving relations.
Then there is another holdover from the Bush administration: Bolivia's new constitution declares that healthcare, along with water and other necessities, is a human right and cannot be privatised. In keeping with their constitutional law, Bolivia asked the WTO for permission to withdraw the previous government's commitment to open up its hospitals and healthcare sector to foreign corporations. According to the WTO's procedural rules, if there are no objections to such a request within 45 days, it is approved. The EU, home to some of the big healthcare corporations that might have an interest in the issue, responded that it had no objections. On 5 January, the last day of the waiting period, the Bush administration objected.
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The Obama team has not yet decided whether it will rescind the Bush administration's objection to Bolivia's WTO request. Presumably they will - if not, it would be an unmistakable signal of continued hostility. Far from being an arcane detail of constitutional or international law, it has real meaning to millions of Bolivians. The struggle against water privatisation was a significant part of the movement that brought Evo Morales to power. This is the political origin of the constitutional provisions establishing these essentials as human rights that cannot be infringed upon by private interests: many poor Bolivians had found themselves unable to afford water after it was privatised and user fees tripled.
Bolivia has also kicked out the US drug enforcement agency, and it does not look like they are coming back. To the Bolivians, the US is using the "war on drugs" throughout Latin America mainly as an excuse to get boots on the ground, and establish ties with local military and police forces. They see the whole process as destabilising and a threat to their sovereignty and democracy.
Despite all of these differences, it is still possible that Washington might choose to normalise relations with Bolivia. There are apparently some divisions within the administration over tactics. The "doves" apparently include Thomas Shannon, the current top state department official for the western hemisphere, and a holdover from the Bush administration. These officials can see that there is a public-relations problem in abusing Bolivia, the poorest country in South America and more importantly one led by the country's first indigenous president, Morales. To most of the world, he is the Nelson Mandela of Bolivia, with his government bringing an end to centuries of apartheid-like exclusion of the country's indigenous majority.
For the "doves" in the new administration, it would be better to avoid a public fight with Bolivia, so as not to distract from the guy who is sitting on what may be the largest petroleum reserves in the world - in Venezuela - and whom they have already successfully vilified in the media. On the other hand, there are hard liners who feel the need to "lay down the law" with Bolivia. We will soon know who has prevailed.