US embassy cable - 05QUITO914

C O N F I D E N T I A L SECTION 01 OF 02 QUITO 000914 
 
SIPDIS 
 
E.O. 12958: DECL: 04/22/2015 
TAGS: PGOV, PREL, ASEC, EC 
SUBJECT: ECUADOR: POSITIVE INITIAL MEETING WITH PRESIDENT 
PALACIO 
 
REF: QUITO 894 
 
Classified By: Amb. Kristie A. Kenney for reasons 1.4 (b) and (d) 
 
1.  (C) Summary:  In a cordial encounter with the Ambassador 
on April 25, President Alfredo Palacio stressed his personal 
links to the U.S., and his wishes for normal and open 
relations with the USG.  He asked the Ambassador to publicly 
express support for his government.  Palacio welcomed Embassy 
input to help him make informed cabinet appointments, said 
the budget was insufficient for his plans, and said his 
concerns about an FTA were limited to medical patent 
provisions.  The Ambassador told Palacio and the press later 
that the U.S. never broke formal diplomatic relations with 
Ecuador.  What is important is finding ways to help Ecuador 
move forward.  The OAS visit represented an opportunity for 
Ecuador's friends to help in a time of crisis.  Recognizing 
that friendly nations occasionally differ on issues, the 
Embassy would continue to engage with the Palacio cabinet. 
She suggested Palacio carefully consider who he selects as 
Ambassador to the United States.  The Ambassador also 
suggested Palacio consider calling President Toledo and 
President Uribe.  End Summary. 
 
Atmospherics 
------------ 
 
2. (C) A weary but dapper President Palacio received the 
Ambassador alone in his National Palace office.  The 
Ambassador was accompanied by PolChief (notetaker).  After a 
brief photo op, they had an amicable half-hour conversation. 
The Ambassador briefly met with press afterward. 
 
 
3.  (C) The Ambassador opened by expressing appreciation for 
Palacio's past good relations with her and the Embassy, and 
hope they would continue in his present position. 
Recognition is not the issue, she said, since relations have 
never been broken.  In these unsettled times, what is most 
important is for Ecuador to move forward and take advantage 
of opportunities available to it.  The imminent OAS 
delegation visit is one such opportunity to show GOE openness 
to the international community, and welcome its assistance. 
The Embassy would work with Palacio's cabinet to ensure 
mutual understanding and good relations. 
 
4.  (C) Palacio agreed that good relations should continue, 
and that the OAS visit could help Ecuador focus on the 
future.  After a lengthy exposition of his long-standing ties 
to the U.S., and a pro-forma denial that he had conspired 
against President Gutierrez, Palacio turned to his 
government.  He was nearly done assembling his team, he said, 
with the exception of the Energy portfolio, which he would 
offer to analyst Kurt Ruff.  He thanked the Embassy for 
(negative) input on another name which had been considered, 
and offered an open channel of communication with the Embassy 
on this and any other issues. 
 
Exchanging Suggestions/Requests 
------------------------------ 
 
5.  (C) Palacio asked that the Ambassador publicly pronounce 
on the legitimacy of his government.  He also asked for USG 
understanding on the national budget, which just "would not 
suffice" to meet his government's needs or goals.  It would 
have to be revised.  Finally, Palacio said that on the trade 
front, the only issue he had with an FTA was the provision on 
medicines (IPR).  He agreed with the Ambassador that friendly 
nations will differ on some issues, saying what is important 
is to have a relationship which permits respectful dialogue. 
 
6.  (C) The Ambassador thanked Palacio for the spirit of 
cooperation and friendship he had referred to, and offered 
her own suggestions for his consideration.  To ensure optimal 
relations, his choice of Ecuador's Ambassador the U.S. was a 
crucial one.  Ecuador would benefit from someone with close 
connections to Palacio and his Foreign Minister.  Palacio 
said he had offered the job to former VP Blasco Penaherrera, 
who had turned it down, preferring to return to the OAS post. 
 Palacio said he was now considering a diplomat with a German 
surname, which slipped his mind.  (Comment:  We wonder if 
this could be former FM Heinz Moeller.) 
 
7.  (C) The Ambassador also suggested Palacio call his 
counterparts in Colombia and Peru, to establish contact and a 
working relationship.  Palacio said he had expected Ecuador's 
neighbors to call him, but agreed it was a good idea to take 
the initiative. 
 
Comment 
------- 
 
8.  (C) Results of this initial meeting are encouraging. 
Palacio was well prepared to signal his government's 
willingness to engage with the USG on issues of mutual 
concern.  His pitch for recognition was surprisingly low-key. 
 He seemed satisfied by the Ambassador's response, which she 
repeated for the press:  ongoing relations, not recognition 
are key, and we want to help Ecuador move forward.  With a 
channel of communication to the President now established, we 
hope to help guide the Palacio government towards shared 
interests. 
KENNEY