ECUADOR: POSITIVE INITIAL MEETING WITH PRESIDENT

C O N F I D E N T I A L SECTION 01 OF 02 QUITO 000914

SIPDIS

E.O. 12958: DECL: 04/22/2015
TAGS: PGOV PREL ASEC EC
SUBJECT: ECUADOR: POSITIVE INITIAL MEETING WITH PRESIDENT
PALACIO

REF: QUITO 894

Classified By: Amb. Kristie A. Kenney for reasons 1.4 (b) and (d)


1. (C) Summary: In a cordial encounter with the Ambassador
on April 25, President Alfredo Palacio stressed his personal
links to the U.S., and his wishes for normal and open
relations with the USG. He asked the Ambassador to publicly
express support for his government. Palacio welcomed Embassy
input to help him make informed cabinet appointments, said
the budget was insufficient for his plans, and said his
concerns about an FTA were limited to medical patent
provisions. The Ambassador told Palacio and the press later
that the U.S. never broke formal diplomatic relations with
Ecuador. What is important is finding ways to help Ecuador
move forward. The OAS visit represented an opportunity for
Ecuador's friends to help in a time of crisis. Recognizing
that friendly nations occasionally differ on issues, the
Embassy would continue to engage with the Palacio cabinet.
She suggested Palacio carefully consider who he selects as
Ambassador to the United States. The Ambassador also
suggested Palacio consider calling President Toledo and
President Uribe. End Summary.

Atmospherics
--------------


2. (C) A weary but dapper President Palacio received the
Ambassador alone in his National Palace office. The
Ambassador was accompanied by PolChief (notetaker). After a
brief photo op, they had an amicable half-hour conversation.
The Ambassador briefly met with press afterward.



3. (C) The Ambassador opened by expressing appreciation for
Palacio's past good relations with her and the Embassy, and
hope they would continue in his present position.
Recognition is not the issue, she said, since relations have
never been broken. In these unsettled times, what is most
important is for Ecuador to move forward and take advantage
of opportunities available to it. The imminent OAS
delegation visit is one such opportunity to show GOE openness
to the international community, and welcome its assistance.
The Embassy would work with Palacio's cabinet to ensure
mutual understanding and good relations.


4. (C) Palacio agreed that good relations should continue,
and that the OAS visit could help Ecuador focus on the
future. After a lengthy exposition of his long-standing ties
to the U.S., and a pro-forma denial that he had conspired
against President Gutierrez, Palacio turned to his
government. He was nearly done assembling his team, he said,
with the exception of the Energy portfolio, which he would
offer to analyst Kurt Ruff. He thanked the Embassy for
(negative) input on another name which had been considered,
and offered an open channel of communication with the Embassy
on this and any other issues.

Exchanging Suggestions/Requests
--------------


5. (C) Palacio asked that the Ambassador publicly pronounce
on the legitimacy of his government. He also asked for USG
understanding on the national budget, which just "would not
suffice" to meet his government's needs or goals. It would
have to be revised. Finally, Palacio said that on the trade
front, the only issue he had with an FTA was the provision on
medicines (IPR). He agreed with the Ambassador that friendly
nations will differ on some issues, saying what is important
is to have a relationship which permits respectful dialogue.


6. (C) The Ambassador thanked Palacio for the spirit of
cooperation and friendship he had referred to, and offered
her own suggestions for his consideration. To ensure optimal
relations, his choice of Ecuador's Ambassador the U.S. was a
crucial one. Ecuador would benefit from someone with close
connections to Palacio and his Foreign Minister. Palacio
said he had offered the job to former VP Blasco Penaherrera,
who had turned it down, preferring to return to the OAS post.
Palacio said he was now considering a diplomat with a German
surname, which slipped his mind. (Comment: We wonder if
this could be former FM Heinz Moeller.)


7. (C) The Ambassador also suggested Palacio call his
counterparts in Colombia and Peru, to establish contact and a
working relationship. Palacio said he had expected Ecuador's
neighbors to call him, but agreed it was a good idea to take
the initiative.

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


8. (C) Results of this initial meeting are encouraging.
Palacio was well prepared to signal his government's
willingness to engage with the USG on issues of mutual
concern. His pitch for recognition was surprisingly low-key.
He seemed satisfied by the Ambassador's response, which she
repeated for the press: ongoing relations, not recognition
are key, and we want to help Ecuador move forward. With a
channel of communication to the President now established, we
hope to help guide the Palacio government towards shared
interests.
KENNEY