FAWNING THRONGS GREET LULA IN QUITO

C O N F I D E N T I A L SECTION 01 OF 02 QUITO 002399

SIPDIS

E.O. 12958: DECL: 08/25/2014
TAGS: PREL PGOV ETRD ECON EFIN EC BR UN
SUBJECT: FAWNING THRONGS GREET LULA IN QUITO

REF: QUITO 2332

Classified By: Ambassador Kristie A. Kenney, Reasons 1.5 (b),(d)


1. (C) SUMMARY: Cheering crowds met Brazilian President
Lula da Silva at every stop during his August 24-25 visit to
Quito. Pre-arrival press was universally positive,
portraying the ex-labor leader as a third-world savior and
counterweight to the United States. Concurrently, editorials
ravaged Ecuador President Lucio Gutierrez for hitching
Ecuador's fortunes solely to the United States and the Free
Trade Agreement. Perhaps sensing that rolling out the
reddest carpet for Lula might offend the USG (and derail the
FTA),GoE protocol downgraded the visit from "state" to
"official." Along similar lines, Ecuador's foreign minister
sought an urgent meeting August 24 with the Ambassador to
trumpet Ecuador's earlier refusal to back a pro-Cuba
Brazilian initiative.


2. (C) In public remarks Lula predictably promoted his
vision for a new economic model, South American unity, and a
LatAm economic bloc capable of confronting the U.S. and
European Union. Gutierrez seconded the Brazilian's
discourse, asserting the international community should fight
hunger with the same vigor and united front now reserved for
combating terror. Media lauded the scope of the 44-point
joint declaration, although the text seems heavy on "resolve
to study" and light on "commit to." With pomp and
circumstance the GoE assuaged elites who seek Bolivarian
unity, while it skillfully avoided commitments likely to
dampen U.S. FTA enthusiasm. END SUMMARY.


3. (U) President of Brazil Ignacio "Lula" da Silva conducted
an official visit to Ecuador August 24-25, calling on the
president and foreign minister, receiving decorations from
Congress and the Executive, signing a joint presidential
declaration, and speaking briefly before media. A press
darling in Ecuador, pre-visit coverage treated Lula like a
conquering hero, playing up his supposed success "standing up
to the gringos." A South American counterweight to U.S.
hegemony was forming, columnists waxed, led by
internationalist Lula, a Hugo Chavez re-invigorated by recent
referendum results, and Argentina's wildly popular Nestor
Kirchner. Ecuador was smart to get aboard.


4. (U) Media accounts differed on specifics, but most
ventured that Lula's Quito talking points would include: 1)
seeking Ecuadorian support for regional integration, namely
tighter ties between Mercosur and the Andean Community of
Nations (CAN); 2) fomenting an economic bloc capable of
negotiating on level ground with the United States and
Europe; 3) inking deals in the energy and telecommunications
sectors, and 4) obtaining GoE buy-in for Brazil's bid for UN
Security Council permanent membership. A solitary article
pondered the risks to the FTA of a too-cozy Lula visit, its
authors correctly noting that Ecuadorian exports to the
United States were five hundred times greater than its
shipments to Brazil.


5. (C) Might a like-thinker exist at the foreign ministry,
cognizant that an open-arms welcome to FTA/FTAA basher Lula
could complicate ongoing free trade talks with the United
States? Perhaps. Foreign Minister Patricio Zuquilanda
telephoned the Embassy August 23, urgently seeking a meeting
with the Ambassador. At the ministry the next day,
Zuquilanda boastfully claimed he had convinced the Brazilians
to withdraw a Rio Group initiative to offer Cuba membership
(Reftel). "How could a group of democracies dialog with a
nation that rejects democracy?," Zuquilanda pondered. He
claimed that Gutierrez would deliver the same line to Lula,
should Cuba issues arise in bilateral discussions.


6. (U) Run-up atmospherics grew stranger still. Speaking
before press August 24, Acting Quito Mayor Antonio Ricaurte
protested that Lula would not receive the keys to the city,
owing to Gutierrez's opposition. "Quitenos reject the
president's attitude," Ricaurte exclaimed. Palace staff
responded, arguing that Lula's visit was "official, not
state." Stoking further conspiracy theorists, one newspaper
wrote that the presidential color guard did not deploy for
Lula's palace arrival, a definite snub.


7. (U) The Brazilian leader eventually obtained the city
keys, as well as congressional and presidential hardware, in
the 22-hour lovefest that followed. Introducing Lula before
a special session of Congress, chief legislator Guillermo
Landazuri praised the Brazilian's principled opposition to
U.S.-led free trade accords. "Signing the FTA must not in
itself be a goal, but rather we should be seeking clear
commercial advantages," Landazuri argued. Lula's subsequent
diatribe claimed that FTAs were hypocritical and unjust.
Surprising, in that Gutierrez praised free trade in his
retort to Hugo Chavez's similar remarks at the June OAS
General Assembly, the Ecuadorian president followed Lula's
remarks with his own bash on neoliberalism. "The current
world situation obliges the hemisphere's nations to seek a
new order," Gutierrez asserted. He added that "the
international community expends too much effort on security
considerations and not enough on fighting hunger."


8. (U) The Embassy August 26 obtained a copy of the
presidents' joint declaration. While lengthy (44 points),
mushy phrases like "resolve to study" and "express their
desires to" pepper the text. Highlights include references
to the nations' signings of side agreements on energy policy
and telecommunications, their intention to seek stronger
Mercosur-CAN ties, their determination to combat trafficking
in persons (TIP),and their agreement to seek an expanded UN
Security Council (with a permanent seat for Brazil).
Unilaterally, Brazil offered assistance to Ecuadorian
exporters, aiming to reduce the one-sided trade relationship,
and committed to helping revamp INECI, the Ecuadorian MFA's
bilateral assistance office. Of concern was the leaders'
commitment to make the 2005 South America-Arab League summit
"a new framework for cooperation and dialog between these
regions."


9. (U) Positive security-related themes also made the final
declaration cut. Both countries defense ministries will look
to augment cooperation, with Brazil possibly providing
Ecuador intelligence gathered by SIVAM, its Amazon region
collection platform. They hailed their peacekeeping
contributions in Haiti and implored the international
community to commit long-term to resolving that nation's
pressing problems. Compromise reined regarding Cuba, the
declaration recommending Rio Group dialog with Castro but
only after reaching agreement on a pro-democracy agenda.


10. (C) COMMENT: Lula's working-class roots, gringo
bashing, and rhetorical skills make him pop-star popular
here. Even Ecuadorian elites cut him slack over his dubious
domestic record and diplomatic ham-handedness. Gutierrez,
focused of late on October local elections, thus had no
choice but to welcome the Brazilian warmly - anything less
risked exposing his own political unpopularity. Similarly,
good sense dictates that Ecuadorian exporters look to expand
overseas markets, although Brazil, which produces many
competing products, looks particularly tough to crack.


11. (C) Calls for Latin solidarity notwithstanding, we see
no sea change in Ecuadorian foreign or trade policy resulting
from Lula's visit. Rhetoric alone cannot make Brazil
Ecuador's largest foreign investor, export destination,
assistance provider, or migrant destination, all roles
currently played by the United States. Gutierrez knows this.
While the state/official silliness was clumsy and
Zuquilanda's Ambassadorial call contrived, the signal seemed
clear: Ecuador desires southern allies, but requires
northern friends. END COMMENT.
KENNEY