VFM FRIENDLY BUT FIRM ON ECUADORIAN CONCERNS

C O N F I D E N T I A L QUITO 000977 SIPDIS SIPDIS E.O. 12958: DECL: 04/20/2016 TAGS: PREL UNSC ETRD EPET EINV ECON PGOV SNAR CO EC SUBJECT: VFM FRIENDLY BUT FIRM ON ECUADORIAN CONCERNS Classified By: ConOff Josh M. Cartin for reasons 1.4b and d. ¶1. (C) Summary: In a meeting with visiting WHA/AND Director Philip French on April 18, Vice Foreign Minister Diego Ribadeneira expressed GOE commitment for continued bilateral cooperation, but stressed the view that the USG needs to take into account some of the unique pressures of Ecuador's situation and the larger geopolitical stakes. French emphasized mutual interests in security, the war on drugs, regional stability and trade. End summary. ¶2. (U) WHA Director for Andean Affairs French and Ribadeneira engaged in an animated but friendly exchange of views on a range of issues of bilateral concern during an April 18 courtesy call. DCM, ConOff (notetaker) and MFA U/S for Bilateral Affairs Susana Alvear also attended the meeting. Elections in Peru -------------- ¶3. (C) The meeting opened with a discussion of the recent elections in Peru. Ribadeneira said he visited Lima last week, and believed that though logically Alan Garcia should win, the populist tide sweeping the region would be difficult to reverse, and that most of the Peruvian electorate identifies with Humala. He mentioned he had come across an interview with Humala from years earlier in which the Peruvian vote leader voiced some "barbarous, incendiary and frightening" ideas. VFM Ribadeneira said that whatever the outcome of the second round, relations with Peru have been good since 1998 and that trade has grown steadily since then. His hope was that "it is one thing to be a candidate, another to be President." Ecuador Important to U.S. -------------- ¶4. (C) French said that Washington recognizes the important cooperation between Ecuador and the U.S. on a wide range of issues, notably antinarcotics and migration, and that naval cooperation and the Manta base had made substantial contributions to confronting the transnational threats that endanger national sovereignty in the Andean region. VFM Ribadeneira suggested that, given the regional dynamics, Ecuador occupies an "increasingly important geopolitical position." He said that Ecuador has already endured its period of "political and economic crisis," and that although he believes the situation will normalize after this year,s elections, it will still be necessary to exercise caution on �A;a number of issues. FTA and Hydrocarbons -------------- ¶5. (C) Turning to trade, French told Ribadeneira that the USG seeks a free trade agreement which would be "ratifiable" by the U.S. and Ecuadorian legislatures. VFM Ribadeneira agreed, saying the FTA has become a major political issue in Ecuador, subject to manipulation by Ecuadorian opposition groups. Nevertheless, Ribadeneira said he left a Cabinet-level meeting on the subject on April 17 optimistic about FTA negotiations and also about the viability of the hydrocarbon law recently passed by the Ecuadorian Congress. ¶6. (C) VFM Ribadeneira said that major GOE stakeholders had concluded that the "timing" of the hydrocarbon law "was no good," but that "ethically and politically" the law was fine. The objective now is to find a way to make the law work so that foreign investors continue to have confidence in Ecuador. VFM Ribadeneira also thought that the passage of the law could help Ecuador politically. The DCM told Ribadeneira that the USG's concerns with the law were that unilateral legislative changes violate the sanctity of contracts, and changes to the contracts require the agreement of the companies affected. Occidental Petroleum Issue -------------- ¶7. (C) With respect to the long-running commercial dispute involving Occidental Petroleum, French said the dispute continues to affect negatively the climate for FTA negotiations in the U.S., undermining the political will to conclude a trade agreement with Ecuador. Ribadeneira said that there was increasing consensus within the government for a political solution by way of direct negotiation with the petroleum companies, including Oxy, whose dispute "was something that should have been resolved a long time ago." He said that the Foreign Ministry was pushing the idea of formalizing a mechanism for such negotiations, and that concrete steps toward a resolution be mandated as part of this mechanism. He believed that such a process would lend support to a positive outcome for the FTA talks. UNSC Seat--Leaning toward Chavez? -------------- ¶8. (C) French asked about the GOE,s stance on Venezuela,s and Guatemala,s candidacies for a UNSC seat, emphasizing the USG position that Venezuela would not contribute positively to the cooperative atmosphere necessary for the effective functioning of the Security Council. Ribadeneira said that although the GOE had not yet decided which candidacy to support, Ecuador was in a difficult position because Venezuela is a neighbor and a fellow Andean Community member. Ribadeneira admitted that Venezuela's hardline positions had created extremely difficult, counter-productive situations in several different regional meetings. But he also emphasized historically strong relations between Ecuador and Venezuela, "Chavez or no Chavez," and suggested that it was better for the GOE "to remain close to Venezuela, so as to better control them." He made clear that the GOE will delay this decision as long as possible. Ribadeneira noted that he enjoyed good personal relations with the Venezuelan Ambassador in Ecuador, whom he had met when serving as Ecuador's ambassador in Brasilia. Asked about Venezuelan government encouragement for recent protests in Ecuador, Ribadeneira admitted that it was possible, but no proof existed. It had been "counterproductive" for the GOE spokesman to voice suspicions, he believed, criticizing this as "an action of a weak government." Ecuador-Colombia Relations at Risk over Spraying -------------- -------------- ¶9. (C) Ecuador-Colombia relations, according to Ribadeneira, are good. FM Carrion has emphasized contacts on a wider range of issues, to blunt the effect of the more controversial or negative ones. Ribadeneira voiced concern, however, that the Colombian government would conclude that a resumption of glyphosate spraying in the border region was necessary, and that such action would "drop a bomb" on Ecuadorian-Colombian relations, erasing progress made on all other issues. He worried that certain elements in the Colombian military are "hard-headed" and do not have a proper understanding of the political consequences in Ecuador of such an action. U/S Alvear asserted that glyphosate spraying directly affected the crops of Ecuadorian farmers and could easily stir up domestic political turmoil. She also posited that too much emphasis was being placed on efforts to combat cocaine production when other drugs, notably synthetics, were becoming a serious problem in Ecuador. Comment -------------- ¶10. (C) Ribadeneira's take on the UNSC seat is worrisome, indicating that there is a chance at the end of the day that they will feel compelled to hold their nose and support Venezuela in the MFA. In previous discussions, GOE officials have acknowledged the worth of Guatemala's candidacy, and the fact it made its bid well before Venezuela did. Also of concern are Ribadeneira's comments on the impact of renewed aerial coca eradication in Colombia. With the UN set to issue its border health visit report to the GOE and a major bilateral meeting scheduled on April 24-25 (SepTel),this issue could cloud an otherwise clear joint border development horizon. JEWELL