US embassy cable - 04QUITO2301

UNCLAS QUITO 002301 
 
SIPDIS 
 
SENSITIVE 
 
E.O. 12958: N/A 
TAGS: PGOV, EAID, SENV, EC, Economy 
SUBJECT: BREAKFAST WITH GUTIERREZ: ECONOMIC ISSUES 
 
Sensitive but Unclassified. 
 
1.  (SBU) Summary:  In a breakfast meeting on August 18, 
President Gutierrez told the Ambassador that Ecuador will 
resolve its business disputes with the U.S.  He expressed 
appreciation to the U.S. for its economic assistance, stated 
that he had instructed Minister of Trade Ivonne Baki to work 
more closely with the Ecuadorian Congress on the Free Trade 
Negotiations, and said he supported the Carter initiative to 
organize a conference on the protection of the Galapagos 
Islands.  He was conspicuous in his uncharacteristic coolness 
toward Minister of Economy and Finance Mauricio Yepez.  End 
Summary. 
 
2.  (U) Ambassador and DCM breakfasted with Gutierrez on 
August 18 at his request.  Gutierrez clearly had several 
issues on his mind (see septel for political discussion). 
With the appeal of the Occidental arbitration case in the 
news, he made a point of re-stating his commitment to the 
resolution of commercial disputes.  (He did not specifically 
mention the Occidental case, and Occidental has requested 
that the Embassy not press its case with the GOE, so 
Ambassador did not raise it either, but his statement seemed 
intended to imply that the GOE would respect the outcome of 
the appeal.) 
 
3.  (U) Gutierrez noted the difficulties his administration 
has had with the Ecuadorian Congress.  He stated that he has 
instructed Minister of Trade Baki to work more closely with 
Congress as negotiations progress on the FTA.  Ambassador 
complimented this initiative, emphasizing the importance of 
an inclusive public and congressional relations strategy to 
the final approval of the FTA.  Gutierrez agreed. 
 
4.  (SBU) Ambassador told Gutierrez that we continue to have 
an excellent relationship with Minister of Economy and 
Finance Mauricio Yepez, who is doing a great job.  Gutierrez, 
was uncharacteristically and visibly cold on the subject, and 
made no comment. 
 
5.  (U) Gutierrez thanked Ambassador for U.S. assistance. 
Ambassador responded by telling him that the Department of 
Defense intends to increase the number of MEDRETE's for 
Ecuador this year, as many as 14 may take place.  Ambassador 
asked Gutierrez what he thought of the proposal by Jimmy 
Carter to have the Carter Center host a conference on 
protection of the Galapagos.  Gutierrez responded that he 
thought it a very good idea and would support it. 
 
6.  (SBU) Comment:  This meeting was not as wide-ranging as 
others, probably because Gutierrez had made many of his 
points in the meeting with Codel Weller and the Ambassador 
just the evening before.  We expect the notable coolness of 
Gutierrez to mention of Yepez may reflect tensions related to 
Yepez' effort to maintain budget discipline during what 
Gutierrez sees as a crucial political campaign (upcoming 
municipal elections).  His statements on commercial disputes 
and the Galapagos confirm his continued support for important 
U.S. initiatives. 
KENNEY