ECUADOR LOOKING TO CONCLUDE FTA

UNCLAS QUITO 000403

SIPDIS

SIPDIS

STATE FOR WHA/AND
STATE PASS USTR FOR BHARMAN

E.O. 12958: N/A
TAGS: ETRD ECON PREL EC
SUBJECT: ECUADOR LOOKING TO CONCLUDE FTA


1. (C) Summary: According to the Ecuadorian Minister of
Trade, Ecuador is ready for a final FTA round. He hopes USTR
will schedule such a round for the near future. Ecuador is
ready to be flexible on agriculture, as well as other
outstanding issues. He said he did not want to hold a
partial round, excluding agriculture and intellectual
property in February. If the FTA could not be concluded
soon, he said he would resign the Ministry rather than finish
out the year. End Summary.


2. (C) Minister of Trade Jorge Illingworth, at his request,
met with the Ambassador on February 11 to discuss the status
of FTA negotiations with the U.S. Illingworth said he and
Chief Negotiator Manuel Chiriboga have spent the past few
weeks traveling throughout Ecuador consulting with the
various sectors and preparing to close the negotiations.
Ecuador is ready for a closing, he claimed, stating that he
has now obtained the flexibility necessary to conclude.


3. (C) Illingworth is aware that the Occidental Petroleum
dispute is playing a role in USTR,s stance at this time and
noted that he was not aware of the state-of-play on the Oxy
dispute (which is very close-hold within the Presidency).
Nor was it clear to him whether Colombia actually wished to
close in the round being held this week, given the electoral
situation in that country. USTR had contacted Chiriboga, he
said, suggesting that the U.S. would not close with Ecuador
until the Oxy situation was resolved. USTR had also
indicated that it may not have time for Ecuador on the dates
previously agreed (Feb 22-24). In any case, neither
agriculture nor intellectual property negotiators were
scheduled to meet at that time.


4. (C) Ecuador would like a single round, including all
issues, as soon as possible in order to conclude the
negotiations, Illingworth said. If that meant delay until
March, that was fine. A partial round to close out
relatively easy issues would to accomplish little and was not
worth holding.

Flexibility on Ag
--------------


5. (C) On agriculture, Illingworth said that Ecuador would
still like one exclusion from the agreement. If that were
impossible, the GOE would propose 25-year phase-outs.
However, he confided, he had obtained agreement for Ecuador
to accept 20-year phase outs if that were necessary. As for
tuna, he had been told by USTR that Ecuador's offer was being
examined. He hoped it would make a basis for agreement.
Ecuador was ready to conclude, and he would aim to do so
regardless of the status of negotiations with Colombia.


6. (C) Illingworth expressed his frustration about the pace
of negotiations. USTR had not engaged with Ecuador since
November, he said. He had taken this job in order to bring
the FTA to conclusion and get it through the Ecuadorian
Congress. He was willing to burn himself in order to
accomplish that. However, if the FTA was not going to be
concluded in the next couple of months the electoral season
would begin and it would be clear that the goal could not be
reached. If he was not going to get the FTA negotiated and
ratified, he would rather leave the ministry.


7. (C) Ambassador promised to pass on to Washington and USTR
Illingworth's concerns. She noted that the Oxy situation
does seem to be coming to a head, and that the wrong decision
on Oxy would make it impossible for the USG to continue to
negotiate with Ecuador. She also noted that, while they may
be overshadowed at the moment by the potential disaster of
Oxy, there are a number of other commercial disputes which
the GOE very much needs to resolve.
JEWELL