ECUADORIAN, CHILEAN FM'S TALK BORDERS, TRADE

UNCLAS QUITO 002891

SIPDIS

E.O. 12958: N/A
TAGS: PREL PGOV ECON ETRD EC CH
SUBJECT: ECUADORIAN, CHILEAN FM'S TALK BORDERS, TRADE

REF: QUITO 2874


1. Summary. Chilean Foreign Minister Ignacio Walker met
with Ecuadorian officials in Quito on October 28. In a
subsequent joint declaration, the countries committed to
begin FTA negotiations in 2004, respect existing
international treaties (in reference to Chile's maritime
disagreements with Peru and Bolivia),and investigate ways to
increase Chilean investment in Ecuador. Walker spoke
publicly in support of Gutierrez and Ecuadorian democracy,
and Chilean and Ecuadorian officials later told Emboffs they
believed the comments could strengthen Gutierrez's hand
against possible impeachment. End Summary.


2. Chilean FM Ignacio Walker visited Quito October 28,
seeking Ecuadorian support in Chile's territorial disputes
with Peru and Bolivia, and searching for opportunities to
increase Chilean investment in Ecuador. Media reported the
following day that Walker had met with President Gutierrez,
Ecuador's Foreign Minister Patricio Zuquilanda, President of
Congress Guillermo Landazuri, the Congressional Committee on
International Subjects and National Defense, the
Ecuadorian-Chilean Parliamentary Committee, and Quito Mayor
Paco Moncayo. To obtain a more direct readout, Poloff
October 28 called on Chilean Ambassador Nelson Haddad.


3. Haddad claimed Walker had achieved three major
breakthroughs in the bilat. The foreign ministries signed an
agreement to begin negotiating an FTA at the end of 2004 and
sign the agreement by 2005. Both governments affirmed the
importance of respecting international law and the maritime
treaties that Chile, Ecuador, and Peru had signed in 1952 and

1954. Finally, Chile's National Petroleum Company will
strengthen its relations with Petroecuador and invest in
additional petroleum infrastructure and exploration in
Ecuador. The last point is of particular sensitivity in
Ecuador, as Chilean investment here has decreased since 2001.
Recent press reports note the countries will begin a
dialogue over ramping up Chilean investment, particularly in
infrastructure projects along Ecuador's southern border.


4. During public appearances, Walker expressed support for
Gutierrez and Ecuadorian democracy and institutions. In
later readouts, Chilean and Ecuadorian diplomats told poloffs
they believed the Chilean FM's statements could strengthen
the Gutierrez government, as Chile's leaders and democracy
are well respected in Ecuador.


4. Comment: Ecuadorians do respect Chile. In fact, we've
often suggested Gutierrez seek bilats with Ricardo Lagos,
hoping the latter's statesman status would rub off on the
younger GoE leader. Yet we're dubious the Chilean FM's
comments will do much to lower political temperatures here,
currently running hot. And while we applaud free trade and
the GoE's efforts to seek an FTA with Chile, we doubt Ecuador
has the staff or capacity to simultaneously negotiate deals
with that nation and the United States. End Comment.
KENNEY