Reuters Summit-US puts off decision on Bolivia's drugs work

(For other news from the Reuters Latin American Investment Summit, click here WASHINGTON, March 21 (Reuters) - The United States finished a review of Bolivia's counter-narcotics work without deciding whether it had "failed demonstrably" to meet its international obligations to fight drugs, a U.S. official said on Wednesday.

If Bolivia, the world's third largest cocaine producer, had met the "failed demonstrably" standard, the United States could cut off U.S. aid other than counternarcotics and humanitarian funds.

Assistant Secretary of State Thomas Shannon, the top U.S. diplomat for Latin America, said in an interview the State Department had decided to put off a decision on the matter until September, when it normally reviews such cooperation.

Last September, the Bush administration faulted Bolivia for focusing too heavily on interdicting the flow of drugs and too little on eradicating coca crops, although it noted that such efforts had picked up.

Bolivia's President Evo Morales, the former head of a coca growers union, does not believe in wholesale eradication of coca crops because he wants to develop a legal market for products made out of coca leaves.

Coca is the main ingredient for cocaine, but Bolivians have chewed it for centuries as a mild stimulant that reduces hunger pangs and altitude sickness.

The Bush administration urged Bolivia to destroy more crops, saying the United States would set out benchmarks for Bolivia and review its performance within six months.

Shannon said that review was completed without making a recommendation. U.S. officials have said the decision was a matter of considerable dispute within the administration.

"We haven't decided one way or the other yet," Shannon said. "My own point of view is that it's important for us to have a counter-drug relationship with the Bolivians and therefore both of us have to make a real effort to make sure to keep that relationship on track."