Identifier
Created
Classification
Origin
05GUAYAQUIL1298
2005-11-15 17:00:00
UNCLASSIFIED
Consulate Guayaquil
Cable title:  

GUAYAQUIL BUSINESSES OPTIMISTIC ABOUT FTA

Tags:  PGOV ETRD EC 
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This record is a partial extract of the original cable. The full text of the original cable is not available.
UNCLAS SECTION 01 OF 02 GUAYAQUIL 001298 

SIPDIS

E.O. 12958: N/A
TAGS: PGOV ETRD EC
SUBJECT: GUAYAQUIL BUSINESSES OPTIMISTIC ABOUT FTA


UNCLAS SECTION 01 OF 02 GUAYAQUIL 001298

SIPDIS

E.O. 12958: N/A
TAGS: PGOV ETRD EC
SUBJECT: GUAYAQUIL BUSINESSES OPTIMISTIC ABOUT FTA



1. Summary: During her second visit to Guayaquil, the
Ambassador met with a wide range of business leaders, most of
whom expressed their belief that the GOE would sign the Free
Trade Agreement (FTA) it is currently negotiating with the
USG. From the Chamber of Industry president to AmCham Board
members, and even in a session with leading editors and
reporters from local media, conversations centered on the
prospects of the FTA. The general conclusion was that the
road to an FTA passage was filled with obstacles, but that
none of the challenges were insurmountable. However, Social
Christian (PSC) leader and member of congress Leon Febres
Cordero was non committal (septel). While in Guayaquil the
Ambassador also took the opportunity to call on leading
businesswoman and philanthropist Isabel Noboa, and to tour a
foundation for street children where a Peace Corps volunteer
has begun a bakery. End summary.

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FTA FORECAST: CLOUDY BUT PROMISING
--------------


2. The Ambassador's meetings with business leaders and
opinion makers on November 9 offered insight into private
sector concerns and expectations leading up to the final
round of FTA negotiations which began November 14.


3. The President of Guayaquil's Chamber of Industry and the
Ecuadorian Business Committee (CEE) for the FTA, Alberto
Dassum, told the Ambassador that he believes the negotiations
will end in signature by all parties involved. He explained
that his call for the removal of the team of political
advisors to Ecuador's FTA negotiators(reported that day in
all major Ecuadorian newspapers) stemmed from his belief that
several key members are working against the agreement. After
raising the issue several times with President Palacio, he
and the CEE had decided to go public with their view. By
doing so, they hoped to draw attention to the need for the
GOE to stand squarely behind the FTA. When questioned about
the possibility of the agreement being passed by the
Ecuadorian Congress, he conceded that it would not be easy,
particularly considering current political instability.
However, he went on to say that he was optimistic that in the
end Congress would recognize how crucial the FTA is for
Ecuador's future.


4. At her first meeting with the Board members of
Guayaquil's Ecuadorian American Chamber of Commerce (AmCham),

the Ambassador heard support for the FTA from a variety of
business leaders. AmCham is focusing on garnering support
for the agreement once negotiations conclude, and subsequent
implementation of the treaty. They view themselves as well-
placed to work with American companies that express interest
in investing in Ecuador after the agreement is signed. The
Ambassador emphasized the importance of convincing the
Ecuadorian Congress to ratify the treaty, and pointed out
that AmCham is in a unique position to do so.


5. When asked to comment on the likelihood that Ecuador will
be able to respond to U.S. Congressional criticisms of its
labor regime, an AmCham Board Member explained at length that
Ecuador's current labor regime is, in his view, extremely
generous to workers. He welcomed the opportunity to correct
elements of current labor law that impair Ecuador's
competitiveness, for example by eliminating the right of
workers to occupy premises during a strike (to be consistent
with Colombian practice) and proposing the elimination of
mandatory profit distributions to employees. In his view,
criticisms of Ecuador's labor regime are based on inaccurate
information, and should be addressed by correcting
misperceptions rather than reforming the labor code. The
Ambassador noted that the ILO believes the Ecuadorian labor
code does not adequately protect the right to organize, a
core USG interest.


6. Reporters and editors from leading Guayaquil newspapers
and news radio stations shared the business leaders' interest
in the FTA, if not their exact sentiments. Questions focused
on agriculture and intellectual property rights, as well as
Ecuador's pursuit of preferential treatment. The Ambassador
explained that in negotiations such as these, the most
difficult issues are always left for the end. She
acknowledged that the GOE will have to cede some positions,
but that overall the FTA will bring numerous benefits to the
country and that Ecuador and the U.S. have many products that
do not compete.

--------------
RESIDENTS DEMONSTRATE ENTREPENURIAL SPIRIT
--------------


7. Overcoming persistent political instability and repeated
cries that Ecuador cannot compete on the global market,
Isabel Noboa has developed a multinational, integrated
business conglomerate that stands out as one of the successes
of the country. During a courtesy call with the Ambassador,
Ms. Noboa and her dynamic group of executives described their
plans to aggressively expand the consortium's holdings, in
areas as far reaching as real estate development,
technological innovation, and investment in natural
resources. As the daughter of the country's most prominent
businessman, Luis Noboa, and sister of banana magnate and
perennial presidential candidate Alvaro Noboa, Ms. Noboa has
a strong entrepreneurial background. At the same time, she
is very committed to social projects, and her company's
foundation works with children and families throughout the
area, focusing on health and education programs.


8. Though not having as large a presence as the Noboa
consortium, Fundacion Crecer makes an important impact on the
lives of the children they work with. With their meager
resources, they have established an impressive facility that
takes children off the streets of Guayaquil and offers them a
place to eat, to learn, and to better themselves. The
Ambassador visited the foundation to observe a bakery that a
Peace Corps volunteer began about a year ago. After touring
the foundation and making bread with the children, the
Ambassador donated a set of scholastic books to the
organization's library.

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COMMENT
--------------


9. Port city Guayaquil will benefit from increased trade
under an FTA and its business, political, and media elites
are natural allies in favor of congressional ratification.
The Ambassador's visit reinforced pro-FTA sentiment, which we
hope to enlist to spur necessary reforms in labor and other
areas.

HERBERT