ENERGY INTEGRATION, AERIAL SPRAYING AND DEBT ON

C O N F I D E N T I A L QUITO 003062 SIPDIS SIPDIS E.O. 12958: DECL: 09/06/2014 TAGS: ETRD EPET EFIN EWWT EAIR EC CO SUBJECT: ENERGY INTEGRATION, AERIAL SPRAYING AND DEBT ON CORREA'S SOUTH AMERICA AGENDA REF: QUITO 2226 Classified By: PolOff Jarahn Hillsman, Reasons 1.4 (b&d) ¶1. (C) Summary. President-elect Rafael Correa has crisscrossed South America in recent weeks to establish contact with his counterparts in the region, pursuing Ecuadorian interest in oil refining and infrastructure projects under the guise of regional cooperation and integration. Basking in a pre-inaugural media and diplomatic honeymoon, Correa is proclaiming productive initial encounters with Brazilian president Lula da Silva, Peruvian president Alan Garcia, Bolivian president Evo Morales, Argentine president Nestor Kirchner, and Chilean president Michelle Bachelet. Correa will conclude his South American tour with meetings with counterparts in Venezuela on December 20 and in Colombia on December 22. In Caracas, Correa will again seek Venezuelan assistance from President Chavez for refining Ecuadorian crude. Correa's first real diplomatic test will come in Bogota, where he is expected to urge President Uribe to suspend aerial fumigation of coca crops along the Ecuador-Colombia border. Early in the new year, Correa is expected to shift gears by traveling to China and possibly Europe before his inauguration on January 15. End Summary. Correa Proposes Projects to Lula -------------- ¶2. (U) President-Elect Rafael Correa began his bilateral South American meetings with President Lula da Silva in Brasilia on December 7. The two presidents reportedly discussed mechanisms for deepening Ecuador-Brazil relations and South American integration. Correa reportedly pitched connection of the Ecuadorian port city of Manta with the Brazilian city of Manaus via road and waterways, suggesting that the Brazilian Development Bank fund the massive project. He also proposed regular flights between Quito and Manaus as another way to increase regional economic integration and development (see RefTel on development of the Manta port). As elsewhere, Correa also raised Ecuadorian interest in refining its oil in Brazil. Seeking South American Summit Support for ATPDEA Extension -------------- -------------- ¶3. (U) At the invitation of Bolivian President Evo Morales, Correa attended the South American Summit in Cochabamba, Bolivia December 8-9. In a side meeting with Morales, Correa reportedly discussed the need to jointly lobby the U.S. Congress for a permanent ATPDEA extension, as well as the need to deepen regional integration. Correa later declared that ATPDEA compensated the Andean contributions to the international drug fight, rejecting any conditionality related to free trade agreements as "unacceptable." Peru Pledges Support on APEC Bid -------------- ¶4. (U) Correa met with Peruvian President Alan Garcia in Lima on December 9, following the South American Summit in Bolivia. During the meeting, the two discussed the need to strengthen the Andean Community of Nations (CAN),while also agreeing to increase bilateral cooperation on a full range of issues. Garcia reportedly agreed to support Ecuador's APEC bid, while offering to study Correa's Ecuadorian oil refinement proposal. Correa Seeks Debt Advice from Kirchner -------------- ¶5. (U) Correa and Argentine President Nestor Kirchner met in Buenos Aires on December 13. Correa and Kirchner reportedly discussed regional cooperation and Ecuador's possible membership in MERCOSUR. Correa also reportedly solicited advice from Kirchner on external debt renegotiation, and secured Argentine support in urging Colombia to suspend aerial glyphosate fumigations along the Ecuador-Colombia border. While in Argentina, he suggested Ecuador should receive a discount on its external debt of up to 75 percent, drawing parallels to Argentina's deep discount on its commercial debt following its default. Correa Proposes FTA with Chile -------------- ¶6. (U) In a December 14 meeting with Chilean President Michelle Bachelet, Correa reportedly expressed interest in negotiating a bilateral trade agreement with Chile and solicited greater energy cooperation. He asked for Chilean help refining Ecuadorian oil, and asked Bachelet to help persuade Colombia to suspend aerial fumigations along Ecuador's Colombian border. Correa to Discuss Oil in Venezuela -------------- ¶7. (U) Correa will travel to Caracas on December 20 for his first post-electoral meeting with Venezuelan President Hugo Chavez. He is expected to renew discussions he led as Economy Minister enlisting Venezuelan refining of Ecuadorian crude, and seeking financing for energy sector projects. Fumigation Clouds Bogota Visit -------------- ¶8. (U) Correa on December 17 confirmed he would meet with Colombian President Alvaro Uribe in Bogota on December 22. Correa told the press that the meeting would likely focus on renewed aerial fumigation of coca crops within 10 km of the Ecuador-Colombia border, agreeing with President Palacio's and FM Carrion's characterization of the spraying as "a hostile act." Correa expressed hope that a frank and direct discussion would help resolve the issue. If not, he said, "we would obviously need to take other measures." ¶9. (U) The GOE has withdrawn its ambassador in Bogota for consultations and refuses to send him back until fumigation ceases, has called for OAS intervention on the fumigation issue and has announced it is preparing a case against Colombia for submission to the Inter-American Court of Human Rights. On December 18, MFA U/S for Multilateral Affairs Gonzalo Salvador told PolChief the GOE was uncertain whether Correa would travel to Bogota, given the current state of relations. Other MFA sources indicate that FM-designate Maria Fernanda Espinosa seemed uncertain whether to recommend going through with the Bogota visit, which comes at the invitation of President Uribe. Salvador said the GOE was encouraged by signs from Uribe of a willingness to pursue the terms of a UN study of health effects of glyphosate, the active ingredient used in aerial fumigation. Comment -------------- ¶10. (C) Correa's early travels have lacked much substance but hopefully he learned something from his more experienced and moderate South American counterparts. Correa's visit to Caracas seems strategically placed at the end of his South American forays to downplay Correa's radicalism and reputed affinity for Chavez. The Chavez meeting may also be used to make common cause in favor of Ecuador's fumigation demands. Correa's first real diplomatic test will come in Bogota. To do so without any concession from Uribe on spraying or a joint glyphosate study will be seen as a defeat here, and could promote a more assertive stance against Colombia from the incoming Correa government. JEWELL