US embassy cable - 04QUITO2399

C O N F I D E N T I A L SECTION 01 OF 02 QUITO 002399 
 
SIPDIS 
 
E.O. 12958: DECL: 08/25/2014 
TAGS: PREL, PGOV, ETRD, ECON, EFIN, EC, BR, UN 
SUBJECT: FAWNING THRONGS GREET LULA IN QUITO 
 
REF: QUITO 2332 
 
Classified By: Ambassador Kristie A. Kenney, Reasons 1.5 (b), (d) 
 
1.  (C) SUMMARY:  Cheering crowds met Brazilian President 
Lula da Silva at every stop during his August 24-25 visit to 
Quito.  Pre-arrival press was universally positive, 
portraying the ex-labor leader as a third-world savior and 
counterweight to the United States.  Concurrently, editorials 
ravaged Ecuador President Lucio Gutierrez for hitching 
Ecuador's fortunes solely to the United States and the Free 
Trade Agreement.  Perhaps sensing that rolling out the 
reddest carpet for Lula might offend the USG (and derail the 
FTA), GoE protocol downgraded the visit from "state" to 
"official."  Along similar lines, Ecuador's foreign minister 
sought an urgent meeting August 24 with the Ambassador to 
trumpet Ecuador's earlier refusal to back a pro-Cuba 
Brazilian initiative. 
 
2.  (C) In public remarks Lula predictably promoted his 
vision for a new economic model, South American unity, and a 
LatAm economic bloc capable of confronting the U.S. and 
European Union.  Gutierrez seconded the Brazilian's 
discourse, asserting the international community should fight 
hunger with the same vigor and united front now reserved for 
combating terror.  Media lauded the scope of the 44-point 
joint declaration, although the text seems heavy on "resolve 
to study" and light on "commit to."  With pomp and 
circumstance the GoE assuaged elites who seek Bolivarian 
unity, while it skillfully avoided commitments likely to 
dampen U.S. FTA enthusiasm.  END SUMMARY. 
 
3.  (U) President of Brazil Ignacio "Lula" da Silva conducted 
an official visit to Ecuador August 24-25, calling on the 
president and foreign minister, receiving decorations from 
Congress and the Executive, signing a joint presidential 
declaration, and speaking briefly before media.  A press 
darling in Ecuador, pre-visit coverage treated Lula like a 
conquering hero, playing up his supposed success "standing up 
to the gringos."  A South American counterweight to U.S. 
hegemony was forming, columnists waxed, led by 
internationalist Lula, a Hugo Chavez re-invigorated by recent 
referendum results, and Argentina's wildly popular Nestor 
Kirchner.  Ecuador was smart to get aboard. 
 
4.  (U) Media accounts differed on specifics, but most 
ventured that Lula's Quito talking points would include:  1) 
seeking Ecuadorian support for regional integration, namely 
tighter ties between Mercosur and the Andean Community of 
Nations (CAN); 2) fomenting an economic bloc capable of 
negotiating on level ground with the United States and 
Europe; 3) inking deals in the energy and telecommunications 
sectors, and 4) obtaining GoE buy-in for Brazil's bid for UN 
Security Council permanent membership.  A solitary article 
pondered the risks to the FTA of a too-cozy Lula visit, its 
authors correctly noting that Ecuadorian exports to the 
United States were five hundred times greater than its 
shipments to Brazil. 
 
5.  (C) Might a like-thinker exist at the foreign ministry, 
cognizant that an open-arms welcome to FTA/FTAA basher Lula 
could complicate ongoing free trade talks with the United 
States?  Perhaps.  Foreign Minister Patricio Zuquilanda 
telephoned the Embassy August 23, urgently seeking a meeting 
with the Ambassador.  At the ministry the next day, 
Zuquilanda boastfully claimed he had convinced the Brazilians 
to withdraw a Rio Group initiative to offer Cuba membership 
(Reftel).  "How could a group of democracies dialog with a 
nation that rejects democracy?," Zuquilanda pondered.  He 
claimed that Gutierrez would deliver the same line to Lula, 
should Cuba issues arise in bilateral discussions. 
 
6.  (U) Run-up atmospherics grew stranger still.  Speaking 
before press August 24, Acting Quito Mayor Antonio Ricaurte 
protested that Lula would not receive the keys to the city, 
owing to Gutierrez's opposition.  "Quitenos reject the 
president's attitude," Ricaurte exclaimed.  Palace staff 
responded, arguing that Lula's visit was "official, not 
state." Stoking further conspiracy theorists, one newspaper 
wrote that the presidential color guard did not deploy for 
Lula's palace arrival, a definite snub. 
 
7.  (U) The Brazilian leader eventually obtained the city 
keys, as well as congressional and presidential hardware, in 
the 22-hour lovefest that followed.  Introducing Lula before 
a special session of Congress, chief legislator Guillermo 
Landazuri praised the Brazilian's principled opposition to 
U.S.-led free trade accords.  "Signing the FTA must not in 
itself be a goal, but rather we should be seeking clear 
commercial advantages," Landazuri argued.  Lula's subsequent 
diatribe claimed that FTAs were hypocritical and unjust. 
Surprising, in that Gutierrez praised free trade in his 
retort to Hugo Chavez's similar remarks at the June OAS 
General Assembly, the Ecuadorian president followed Lula's 
remarks with his own bash on neoliberalism.  "The current 
world situation obliges the hemisphere's nations to seek a 
new order," Gutierrez asserted.  He added that "the 
international community expends too much effort on security 
considerations and not enough on fighting hunger." 
 
8.  (U) The Embassy August 26 obtained a copy of the 
presidents' joint declaration.  While lengthy (44 points), 
mushy phrases like "resolve to study" and "express their 
desires to" pepper the text.  Highlights include references 
to the nations' signings of side agreements on energy policy 
and telecommunications, their intention to seek stronger 
Mercosur-CAN ties, their determination to combat trafficking 
in persons (TIP), and their agreement to seek an expanded UN 
Security Council (with a permanent seat for Brazil). 
Unilaterally, Brazil offered assistance to Ecuadorian 
exporters, aiming to reduce the one-sided trade relationship, 
and committed to helping revamp INECI, the Ecuadorian MFA's 
bilateral assistance office.  Of concern was the leaders' 
commitment to make the 2005 South America-Arab League summit 
"a new framework for cooperation and dialog between these 
regions." 
 
9.  (U) Positive security-related themes also made the final 
declaration cut.  Both countries defense ministries will look 
to augment cooperation, with Brazil possibly providing 
Ecuador intelligence gathered by SIVAM, its Amazon region 
collection platform.  They hailed their peacekeeping 
contributions in Haiti and implored the international 
community to commit long-term to resolving that nation's 
pressing problems.  Compromise reined regarding Cuba, the 
declaration recommending Rio Group dialog with Castro but 
only after reaching agreement on a pro-democracy agenda. 
 
10.  (C) COMMENT:  Lula's working-class roots, gringo 
bashing, and rhetorical skills make him pop-star popular 
here.  Even Ecuadorian elites cut him slack over his dubious 
domestic record and diplomatic ham-handedness.  Gutierrez, 
focused of late on October local elections, thus had no 
choice but to welcome the Brazilian warmly - anything less 
risked exposing his own political unpopularity.  Similarly, 
good sense dictates that Ecuadorian exporters look to expand 
overseas markets, although Brazil, which produces many 
competing products, looks particularly tough to crack. 
 
11.  (C) Calls for Latin solidarity notwithstanding, we see 
no sea change in Ecuadorian foreign or trade policy resulting 
from Lula's visit.  Rhetoric alone cannot make Brazil 
Ecuador's largest foreign investor, export destination, 
assistance provider, or migrant destination, all roles 
currently played by the United States.  Gutierrez knows this. 
 While the state/official silliness was clumsy and 
Zuquilanda's Ambassadorial call contrived, the signal seemed 
clear:  Ecuador desires southern allies, but requires 
northern friends.  END COMMENT. 
KENNEY