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Cablegate: Ecuador Wants Usg to Join Wto Banana Dispute

VZCZCXYZ0000
OO RUEHWEB

DE RUEHQT #0377 0461855
ZNR UUUUU ZZH
O 151855Z FEB 07
FM AMEMBASSY QUITO
TO RUEHC/SECSTATE WASHDC IMMEDIATE 6330
INFO RUEHBO/AMEMBASSY BOGOTA PRIORITY 6440
RUEHCV/AMEMBASSY CARACAS PRIORITY 2370
RUEHLP/AMEMBASSY LA PAZ MAR 0417
RUEHPE/AMEMBASSY LIMA PRIORITY 1410
RUEHGL/AMCONSUL GUAYAQUIL PRIORITY 1882
RUEHZP/AMEMBASSY PANAMA PRIORITY 0687
RUEHTG/AMEMBASSY TEGUCIGALPA PRIORITY 0530
RUEHME/AMEMBASSY MEXICO PRIORITY 1522
RUEHGT/AMEMBASSY GUATEMALA PRIORITY 0811
RUEHSJ/AMEMBASSY SAN JOSE PRIORITY 1329
RUEHGV/USMISSION GENEVA PRIORITY 0358
RUEHBS/USEU BRUSSELS PRIORITY

UNCLAS QUITO 000377

SIPDIS

SENSITIVE
SIPDIS

USTR FOR MARK MOWREY
GENEVA PASS USTR

E.O. 12958: N/A
TAGS: ETRD EAGR ECON EC
SUBJECT: ECUADOR WANTS USG TO JOIN WTO BANANA DISPUTE

REF: 06 Quito 2513

1. (SBU) Ecuador will request the formation of a WTO dispute
settlement panel to hear Ecuador's complaint against the current EU
banana regime. Ecuador would like to see the U.S. join the case as
a full partner, since it believes that U.S. participation is
necessary to secure EU compliance with a WTO decision. End summary.


2. (SBU) Under Secretary for International Economic Policy Fernando
Yepez told EconCouns on February 14 that the GOE has decided to
request the formation of a WTO dispute settlement panel to consider
Ecuador's complaint against the current EU banana regime. Ecuador
requested consultations with the EU in November (reftel), and after
inconclusive consultations in December and January the GOE believes
that it needs to move forward with the dispute settlement process to
maintain pressure on the EU to lower its tariff on Latin bananas.
Yepez said that the Ministers of Agriculture, Industry, and Foreign
Affairs approved the decision to move forward with the WTO case on
February 13 and he had just requested that the GOE's U.S.-based
attorney prepare Ecuador's submission.

3. (SBU) Yepez noted that time is not on Ecuador's side. He said
that he understands that the EU is likely to conclude a free trade
agreement (FTA) in 2008 with the ACP (African, Caribbean, and
Pacific) countries that would grant the ACP countries preferential
access to the EU in the context of an FTA. An EU-ACP FTA, he said,
would undercut Ecuador's main arguments against the current EU
banana regime. Therefore Ecuador is anxious to maintain pressure on
the EU to lower its tariffs on Latin bananas before the EU-ACP trade
agreement enters into force.

4. (SBU) The GOE hopes to request the formation of a dispute
settlement panel at the February 20 meeting of the Dispute
Settlement Body (DSB). However, Yepez said, he believes that agenda
for the February 20 meeting may already be closed. If so, Ecuador
may request an extraordinary DSB meeting or may have to wait until
the March DSB meeting.

5. (SBU) Yepez urged the United States to join with Ecuador as a
full partner in the case, rather than continue as a third party. He
noted that only original parties to the initial WTO banana case can
be full parties to the current case. Of the initial group (U.S.,
Ecuador, Mexico, Honduras, and Panama) that could join Ecuador, he
said, the U.S. is the one country with sufficient weight to force
the EU to take notice. He added that if the case reaches the
retaliation phase, U.S. participation as a full party would be
particularly important since the size of the U.S. market would be
critical leverage in securing compliance from the EU.

JEWELL

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