MINISTER OF TRADE REPLACEMENT NOT YET NAMED

C O N F I D E N T I A L QUITO 001773

SIPDIS

SENSITIVE
SIPDIS

TREASURY FOR SGOOCH
DEPT PASS TO USTR

E.O. 12958: DECL: 07/19/2016
TAGS: ECON ETRD PGOV PREL
SUBJECT: MINISTER OF TRADE REPLACEMENT NOT YET NAMED

REF: QUITO 1669

Classified By: EconOff Sara Ainsworth, for reasons 1.4 (b&d)


1. (C) Summary. President Palacio accepted Minister of
Trade Roberto Illingworth's resignation on July 13, after
only a week in office for the latter. Illingworth had been
facing pressure from the Guayaquil Chamber of Commerce since
being named on July 7 (reftel). Teodoro Maldonado, Executive
Vice-President of the Guayaquil Chamber of Commerce, told the
Consulate Poloff in Guayaquil he is being considered for the
position as well as Cuenca Chamber of Industry President
Xavier Abad Vicuna. End Summary.

Illingworth's Days Numbered
--------------


2. (U) After less than a week in office, Minister of Trade
Roberto Illingworth resigned on July 13, making him the
shortest-lived minister in Palacio's revolving door cabinet.
Illingworth had been facing pressure from the Guayaquil
Chamber of Commerce (GCC) since being named on July 7
(reftel). Most of Illingworth's week in office was spent
away from his desk. Immediately after taking office, he flew
to Geneva for ongoing World Trade Organization talks to
determine a new reference price for Ecuadorian bananas and
shrimp. He was in Quito again July 12 and tendered his
resignation the following day.

Legal Dispute Led To Ouster
--------------


3. (U) Illingworth was an inappropriate government
interlocutor for Ecuador's business community. He earlier
had filed a lawsuit against the GCC due to his dismissal by
former GCC President Eduardo Maruri after working for the
organization for 22 years. The lawsuit prevented him from
becoming Deputy Minister under his predecessor Joaquin
Zevallos and caused him to fall out of favor with the GCC.
In addition to the GCC, the Guayaquil Chamber of Industry
opposed Illingworth's appointment from the beginning.


4. (U) The two Guayaquil chambers publicly described
Illingworth's resignation as a clear signal that the
government wanted to resume dialogue with the business
community.

One Of Many, Surely Not The Last
--------------


5. (U) This personnel change marks the latest for a
government that has seen more than 300 officials serve during
Palacio's 15 months in office. Gallup International's Centro
de Estudios y Datos (CEDATOS) published a study on July 12
which indicates economic positions have been the most
unstable, with 7 high-level changes at Petroecuador, 5 at the
Ministry of Economy and 4 at the Ministry of Trade. The
Ministers of Agriculture, Environment and Tourism are the
only three who remain from last April.

Palacio Considering Two Replacements
--------------


6. (C) Teodoro Maldonado, Executive Vice-President of the
Guayaquil Chamber of Commerce, told the Consulate Poloff in
Guayaquil on July 18 that Leon Febres Cordero's Social
Christian Party (PSC) is pressuring Palacio to make him
Ecuador's new Minister of Trade. Maldonado's family has
close ties to Palacio, and his father, Teodoro Maldonado Sr.,
was recently named Ecuadorian Ambassador to Great Britain.
Maldonado told us that Palacio, however, is unhappy with his
public criticism of the GOE's Oxy decision and is therefore
reluctant to appoint him. If selected, Maldonado said that
he would work with Palacio to outline objectives for the
remainder of his term, and try to resolve pending investment
disputes. While he considers the Oxy case too politically
difficult to address, he said that resolving smaller cases
might ease relations with the U.S. and pave the way for
renewed FTA negotiations under the next government.


7. (U) Unlike his short-lived predecessor, Maldonado has
close ties to Ecuador's business community and to the U.S.
Since 2004, Maldonado has been the Executive Vice-President
of the Guayaquil Chamber of Commerce. He previously spent
six years in Washington, DC at the Ecuadorian Embassy as an
Economics Officer and then worked for Fleishman-Hillard
Government Relations, a private consulting firm in DC. At
the Ecuadorian Embassy, he lobbied for ATPDEA, the Andean
Regional Initiative, and increased funding available to
Ecuador via Plan Colombia. From 1987 to 1997, he held
various legal positions within the Ministries of Trade and
Agriculture, ABN AMRO Bank, Estudio Juridico Noboa, and the
Banco de Credito.


7. (U) Born September 26, 1960 in Guayaquil, Maldonado has a
Masters in International Public Policy from Johns Hopkins
University School of Advanced International Studies (2001),a
JD from the London School of Economics (1995),and an
undergraduate degree in Law from Catholic University of
Guayaquil (1977). He speaks fluent English and some French.


8. (C) Maldonado told us Palacio is also considering Xavier
Abad Vicuna, the Executive President of the Cuenca Chamber of
Industry, where has been since 2005. Rumored in the press as
Illingworth's replacement, Abad was Deputy Minister of Trade
for Industry under former President Gutierrez' government.
He served in various local government positions in Cuenca
from 1995-2002, and conducted legal studies for Estudio
Juridico Argudo y Asociados from 1991-1995. Abad received
both a JD and bachelors in Political Science from the
University of Cuenca (1985-1991).

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


9. (SBU) The Consulate in Guayaquil reports a strong,
productive relationship with Maldonado. His ties with the
business community and experience in the U.S. would enhance
our relationship with the Ministry of Trade. Xavier Abad is
also very much a known quantity to the Embassy and would also
be a positive appointment. Given an expected limited tenure
in office, however, we do not expect any major
accomplishments from either man.
JEWELL