VP Discusses FTA, Referendum, and Gutierrez

UNCLAS SECTION 01 OF 02 QUITO 001407

SIPDIS

E.O. 12958: N/A
TAGS: PGOV PREL EC
SUBJECT: VP Discusses FTA, Referendum, and Gutierrez



1. Summary. Vice President Alejandro Serrano Aguilar met
June 15 with the Ambassador for breakfast. He discussed his
support for the US-Andean Free Trade Agreement (FTA),the
upcoming public dialogue process and referendum, and ex-
President Gutierrez's anti-GOE commentary from Washington.
Serrano said that the popular referendum would not address
the FTA. Serrano's daughter, Ana Maria Serrano, was also
present and described her experience as a flower exporter to
explain her support for Ecuadorian participation in free
trade negotiations. End summary.

Despite No-Show, VP Supports FTA Agreement
--------------


2. Serrano opened the June 15 breakfast by discussing his
and President Palacio's views of the FTA round that was held
June 6-10 in Guayaquil, emphasizing that they considered
this round to be a technical negotiation between trade
ministries. He claimed that neither Palacio nor he attended
the session because they did not want to make it highly
political, causing free trade opponents to organize
protests. Despite his absence, he firmly supports the FTA
and believes that Ecuador critically needs this market
access. He said he was surprised by the amount of support
that exists within Ecuador for free trade, including among
artisans seeking new markets for their goods. Serrano
explained that his opinion on this is shaped by the fact
that he is from Cuenca, which he compared to Chicago as an
apolitical commercial center.


3. Serrano's daughter, Ana Maria Serrano, also participated
in this conversation, explaining why the FTA negotiations
are important to her as an exporter of flowers in Cuenca
(Ecuador's third largest city). She explained that while
Ecuador produces flowers with more brilliant colors, they
have much competition from Colombia, which has cheaper labor
and is closer to the U.S. She stressed the fact that
Ecuador must participate in these rounds because they need a
good trade deal to remain competitive. She also mentioned
the fact that Andean Trade Promotion and Drug Eradication
Act (ATPDEA) trade benefits run out soon. The Ambassador
invited her to visit the Embassy to discuss free trade in
more detail with the economic section.

VP Working With Popular Assemblies on Referendum
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4. Serrano also discussed the upcoming popular referendum,
currently scheduled for December 11, for which he is in
charge of preparation. He stressed that the FTA agreement
will not be put on the referendum, as it is a treaty that is
unsigned and does not officially exist; he has made this
clear to many Ecuadorian political leaders. In order to
organize this referendum, he is working closely with the
popular assemblies to create questions and a format for
citizen input. The assemblies agree with his vision for the
referendum and are eager to participate in the process.
Serrano mentioned that most of these representatives present
wishlists to him while discussing the referendum,
demonstrating that regional issues continue to dominate
outside of Quito, mainly focused on economic progress.


5. Serrano said that it will be difficult to translate the
referendum questions into language that the general
population can understand. He stated that the referendum
will have very few questions. When the Ambassador asked if
that meant five or less, he replied affirmatively. The
Ambassador also mentioned that he will have to work with the
Ecuadorian Congress on this process. Serrano replied that
he hoped that his prior service as a Congressman would help
him in this coordination, as he understands the
Congressional culture and protocol.

Gutierrez Has Right to Free Speech
--------------


6. The Ambassador introduced the topic of ex-President
Lucio Gutierrez's comments from Washington disparaging
Ecuador's current administration and his unconstitutional
ouster. She advised Serrano to allow Gutierrez to express
his free speech, stating that the USG can only step in if he
violates the terms of his visa. Serrano responded by
thanking the Ambassador for discussing the issue and
agreeing that, while it is not a great situation, Gutierrez
has the right to make whatever statements he wishes.

Comment
--------------


7. The Ambassador was impressed with Serrano's common sense
and mature approach to politics. She especially noted the
care with which Serrano is building the popular referendum
with support from the popular assemblies. The breakfast
provided a good opportunity to build better relations with
Serrano and his daughter, and the Embassy will continue to
maintain close contact with Serrano to monitor the
development of the referendum process.


KENNEY