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
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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
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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
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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
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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