BREAKFAST WITH GUTIERREZ: ECONOMIC ISSUES

UNCLAS QUITO 002301

SIPDIS

SENSITIVE

E.O. 12958: N/A
TAGS: PGOV EAID SENV EC
SUBJECT: BREAKFAST WITH GUTIERREZ: ECONOMIC ISSUES

Sensitive but Unclassified.


1. (SBU) Summary: In a breakfast meeting on August 18,
President Gutierrez told the Ambassador that Ecuador will
resolve its business disputes with the U.S. He expressed
appreciation to the U.S. for its economic assistance, stated
that he had instructed Minister of Trade Ivonne Baki to work
more closely with the Ecuadorian Congress on the Free Trade
Negotiations, and said he supported the Carter initiative to
organize a conference on the protection of the Galapagos
Islands. He was conspicuous in his uncharacteristic coolness
toward Minister of Economy and Finance Mauricio Yepez. End
Summary.


2. (U) Ambassador and DCM breakfasted with Gutierrez on
August 18 at his request. Gutierrez clearly had several
issues on his mind (see septel for political discussion).
With the appeal of the Occidental arbitration case in the
news, he made a point of re-stating his commitment to the
resolution of commercial disputes. (He did not specifically
mention the Occidental case, and Occidental has requested
that the Embassy not press its case with the GOE, so
Ambassador did not raise it either, but his statement seemed
intended to imply that the GOE would respect the outcome of
the appeal.)


3. (U) Gutierrez noted the difficulties his administration
has had with the Ecuadorian Congress. He stated that he has
instructed Minister of Trade Baki to work more closely with
Congress as negotiations progress on the FTA. Ambassador
complimented this initiative, emphasizing the importance of
an inclusive public and congressional relations strategy to
the final approval of the FTA. Gutierrez agreed.


4. (SBU) Ambassador told Gutierrez that we continue to have
an excellent relationship with Minister of Economy and
Finance Mauricio Yepez, who is doing a great job. Gutierrez,
was uncharacteristically and visibly cold on the subject, and
made no comment.


5. (U) Gutierrez thanked Ambassador for U.S. assistance.
Ambassador responded by telling him that the Department of
Defense intends to increase the number of MEDRETE's for
Ecuador this year, as many as 14 may take place. Ambassador
asked Gutierrez what he thought of the proposal by Jimmy
Carter to have the Carter Center host a conference on
protection of the Galapagos. Gutierrez responded that he
thought it a very good idea and would support it.


6. (SBU) Comment: This meeting was not as wide-ranging as
others, probably because Gutierrez had made many of his
points in the meeting with Codel Weller and the Ambassador
just the evening before. We expect the notable coolness of
Gutierrez to mention of Yepez may reflect tensions related to
Yepez' effort to maintain budget discipline during what
Gutierrez sees as a crucial political campaign (upcoming
municipal elections). His statements on commercial disputes
and the Galapagos confirm his continued support for important
U.S. initiatives.
KENNEY