WHO'S ON FIRST? PALACIO NAMES FIFTH TRADE MINISTER

C O N F I D E N T I A L QUITO 001860 SIPDIS SIPDIS DEPT PASS TO USTR E.O. 12958: DECL: 07/27/2016 TAGS: ECON EC ECON EFIN ETRD PGOV PINR PREL SUBJECT: WHO'S ON FIRST? PALACIO NAMES FIFTH TRADE MINISTER REF: QUITO 1773 Classified By: EconOff Josh M. Cartin for Reason 1.4(b) and (d) ¶1. (C) Summary: Two weeks after the embarrassment of Roberto Illingworth,s hasty resignation ended his tenure of less than one week (which in turn had followed the very brief turn in the office by Joaquin Cevallos),Ecuadorian President Alfredo Palacio named relative unknown Tomas Peribonio as his administration,s fifth Trade Minister. Peribonio, a 44-year-old native of Guayaquil, previously worked with Ecuador's Guayaquil-dominated export-promotion authority. His naming as minister can be seen as an indication of Palacio's further capitulation to the same Guayaquil-based political/economic forces that had forced the ouster of Illingworth. End summary. ¶2. (C) On July 27, the Government of Ecuador (GOE) announced its new Minister of Trade as Tomas Juan Peribonio Poduje. Ecuador had been without a trade czar since the resignation of Roberto Illingworth on July 13. Illingworth,s installation as minister had been seen as an affront to the powerful Guayaquil Chamber of Commerce, with which Illingworth was embroiled in a legal dispute (reftel). ¶3. (C) Peribonio, a 44-year-old native Guayaquileno, will be seen as a more palatable choice by Guayaquil's business community. He previously worked with Ecuador,s export-promotion authority, the Corporacion de Promocion de Exportaciones e Inversiones (CORPEI),which is dominated by Guayaquil-based commercial concerns. Peribonio was previously active in Guayaquil's chamber of aquacultural industries, indicating that he may have business interests in the shrimp or tuna sectors. ¶4. (C) The new minister's last post with CORPEI was as Commercial Director for Argentina, Chile and Uruguay, and he simultaneously served as the GOE's commercial counselor for its embassies in all three countries. Peribonio's links to Chile run deep: he obtained three business- and engineering-related degrees at Chilean universities, and he is believed to be a confidant of Ecuador's ex-Ambassador to Chile Gonzalo Salvador Holguin, who this week returned to Quito to become Under Secretary for Multilateral Affairs at the Foreign Ministry. (Comment: Sources tell us that Salvador Holguin is close to Palacio and has been influential in the selection of several recent government appointments. End comment.) ¶5. (C) Contacts in the Guayaquil Chamber of Commerce told EmbOff that Peribonio has not made previous public statements either for or against a Free Trade Agreement (FTA) with the United States, only mentioning that "other alternatives exist." According to the same contacts, Peribonio has said that he intends to seek a Free Trade Agreement with Chile. ¶6. (C) Executive Vice President of the Guayaquil Chamber of Commerce Teodoro Maldonado told ConGenOff that Peribonio is "a sensible, reasonable, very serious man of principle." Maldonado worried, however, that as Peribonio has spent his last two years in Chile, he will not understand the urgency of renewing FTA talks with the United States. Maldonado also said that he doubts Peribonio would be able to push forward with FTA negotiations even if he wanted to, because Palacio has no intention of renewing the negotiations. ¶7. (C) Comment: With the naming of Peribonio as Trade Minister, Palacio has played it safe with a choice acceptable to Guayaquil commercial interests. While he may be seeking to signal a commitment to pragmatic, pro-trade policies with an eye toward gaining ATPDEA extension, it may also just be that he wanted a person he could trust to cause no further political problems for the administration. End Comment. BROWN