US embassy cable - 05QUITO1096

UNCLAS QUITO 001096 
 
SIPDIS 
 
DEPT PASS USTR BENNETT HARMAN 
 
E.O. 12958: N/A 
TAGS: ETRD, PGOV, EINV, PREL, ECON, EC 
SUBJECT: GOE REPLACES FTA NEGOTIATION TEAM 
 
REF: QUITO 1047 
 
1. (U) Summary.  President Palacio issued an Executive Decree 
May 12 making wholesale changes to the GOE FTA negotiation 
team.  Trade Minister Oswaldo Molestina has been named lead 
negotiator, though former lead negotiator Cristian Espinosa 
has been kept on as Under Secretary for Foreign Trade and 
Integration in the Ministry.  It is unclear what, if any, 
role Espinosa will continue to play in the negotiations or 
how these changes will affect the GOE's capacity to continue 
with the negotiations.  The other most notable addition to 
the negotiating team is President of the Quito Chamber of 
Commerce Blasco Penaherrera, a vocal opponent of former 
President Gutierrez, but also a strong proponent of the FTA 
and IPR protections. 
 
Changing Horses Past Midstream 
------------------------------ 
 
2. (U) Despite assurances from Trade Minister Oswaldo 
Molestina that the GOE planned to keep the team largely the 
same (reftel) and confirming rumors to the contrary out of 
Guayaquil (septel), President Palacio issued an Executive 
Decree on May 11 (made public May 12) changing his free trade 
agreement (FTA) negotiating team.  The new lead negotiator is 
Trade Minister Molestina, who lacks experience in trade 
negotiations.  Molestina will lead the team in its meetings 
next week in Bogota with their Andean counterparts in 
preparation for the June 6-10 negotiation round in Guayaquil. 
 Quito Chamber of Commerce President Blasco Penaherrera Solah 
is replacing Mauricio Pinto, who resigned last month under 
President Gutierrez.  Penaherrera was a vocal opponent of 
President Gutierrez and one of the leaders who called for his 
ouster.  However, as President of the Quito Chamber, 
Penaherrera was a strong supporter of the FTA and 
intellectual property rights (IPR) protections. 
 
3. (U) Other new faces on the negotiation team are Francisco 
Alarcon Fernandez Salvador, Vinicio Baquero Ordonez, 
Francisco Pena Valle and Raul Lopez Paredes.  Palacio also 
appointed Dr. Eduardo Armendariz as Under Secretary for 
Small, Medium and Micro Enterprises and Artesania, Susana 
Gonzalez Rosado as Regional Under Secretary for the Coastal 
Region, Santiago Malo as Southern Region Under Secretary and 
Cristobal Mariscal as Under Secretary for Fishery Resources. 
 
4. (SBU) Guayaquil Chamber of Industries President Alberto 
Dassum (protect) told Econ Counselor May 12 that he tried 
several times to talk Palacio out of making the changes. 
Dassum said that Palacio had a personal grudge against 
Espinosa ever since the Cartagena round of negotiations that 
Palacio had attended as Vice President.  Palacio had been 
pushing Espinosa on IPR issues (likely on pharmaceuticals and 
patent protections) and had not liked how Espinosa had 
handled the situation. 
 
Comment 
------- 
 
4. (SBU) We are trying to ascertain what, if any, role former 
lead negotiator Espinosa will play in the negotiations.  We 
are also trying to learn more about the new negotiators and 
their trade negotiation experience, to determine how steep 
their learning curve will be and how the new team might 
change negotiating positions and strategies.  It is clear 
that, by joining the negotiations at this late stage, they 
will have a lot of catching up to do.  Their meetings next 
week in Bogota with their Colombian and Peruvian counterparts 
will give us a good indication of how prepared they are to 
conclude an FTA and how much leeway their counterparts will 
be willing to grant the new team. 
CHACON