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Cablegate: Guayaquil Business Leaders Fret Over Economic

VZCZCXYZ0009
RR RUEHWEB

DE RUEHGL #0234/01 2701520
ZNR UUUUU ZZH
R 261520Z SEP 08
FM AMCONSUL GUAYAQUIL
TO RUEHC/SECSTATE WASHDC 9548
INFO RUEHBO/AMEMBASSY BOGOTA 3399
RUEHCV/AMEMBASSY CARACAS 0481
RUEHLP/AMEMBASSY LA PAZ SEP LIMA 3820
RUEHQT/AMEMBASSY QUITO 0743

UNCLAS GUAYAQUIL 000234

SENSITIVE
SIPDIS

E.O. 12958: N/A
TAGS: ECON ETRD EINV ELAB PGOV EC
SUBJECT: GUAYAQUIL BUSINESS LEADERS FRET OVER ECONOMIC
MANAGEMENT AND ATPA RENEWAL

REF: QUITO 883

1. (SBU) Summary. On September 17, the Ambassador met for
the first time with leaders of the Guayaquil business sector
to hear views on the investment climate in Guayaquil,
Ecuador,s commercial center, and priorities for the
bilateral relationship between the U.S. and Ecuador. Most
participants expressed a pessimistic view of the economic
climate and the policies of the Correa Administration. They
repeatedly stressed the importance of renewing trade
preferences under ATPA. The Ambassador discussed the
bilateral dialogue, emphasized cooperation that increased job
creation and reduce poverty, and sought cooperation with the
private sector on shared goals. End Summary.

2. (U) On September 17, as part of the Ambassador,s first
visit to Guayaquil, 34 representatives of the Guayaquil
business community gathered to brief the Ambassador on the
business situation in Guayaquil, and to hear her views on the
bilateral relationship between Ecuador and the United States.
Maria Gloria Alarcon, President of the Guayaquil Chamber of
Commerce (COC) hosted and mediated the informal question and
answer session. Also present from the US Mission were Deputy
Chief of Mission, Guayaquil Consul General, Econ Counselor
and Commercial Attache,.

ATPA Renewal
------------

3. (SBU) Alarcon began the meeting expressing her
disappointment that the Free Trade Agreement (FTA)
discussions were never completed. She asked if any future
treaty between Ecuador and the US would happen and if ATPA
would be renewed. Carlos Andrade, Interim President of the
Guayaquil Chamber of Industry, emphasized that the GOE needed
to work on some kind of agreement, even if it was not an FTA.
Bruno Leone of the Chamber of Fisheries emphasized the tuna
industry,s long-term investments and the need for ATPA to be
renewed. Leone said that, "While the Correa government is
populist, we want the USG to be more aggressive on the
economic front. It,s not just tuna, it,s flowers,
broccoli-these are markets with long-term investment and we
need to keep that in mind.' He also noted that
anti-narcotics cooperation with Ecuador remained strong and
that the U.S. should renew ATPA to reward that cooperation.
Augustin Jimenez, President of the Chamber of Fisheries,
echoed the need for ATPA renewal, "If we don,t have
markets, nothing matters. We must insist on ATPA. We can go
on a pilgrimage to Washington if we have to." Alarcon noted
that Ecuadorian delegations from the fish and flower sectors
have gone to Washington to lobby for ATPA renewal.

Grim Outlook on Investment
--------------------------

4. (SBU) Executive Director of the Guayaquil Chamber of
Commerce Teodoro Maldonado told the Ambassador that the
business community felt threatened by the lack of private
investment as a result of concerns about the new constitution
and the resulting instability. AmCham President Maria
Phillips underlined the special relationship Guayaquil has
with the U.S. and the importance of Guayaquil as an
employment center. The Chamber of Industry,s Andrade
seconded the opinion: "There is no new investment and we
need new investment for more production. It is hard to see a
willingness to invest. This will depend on the GOE,s
ability to loan money and our problem now is that the current
government is not effective in its handling of funds."

U.S. Assistance and Views of Ecuador
------------------------------------
5. (SBU) Andrade asked what the USG was doing to promote job
creation in Ecuador. The Consul General responded by
discussing USAID projects that are being created to help
develop the business and private sector, in particular
micro-businesses. Maldonado pressed the Ambassador to please
emphasize to Washington that Ecuador was not the same as its
neighbors in Venezuela or Bolivia and that the economic
issues remain in the forefront of our bilateral relationship.
Richard Hall, a board director of the Chamber of Commerce,
said, "We are in a place where governments are populist.
This is their politics, but please don,t forget the business
sector."

6. (U) The Ambassador briefed the business representatives
on the Bilateral Dialogue between Ecuador and the United
States, noting its objective of emphasizing areas of

cooperation and exploring new areas of mutual interest where
the two governments could work together.

7. (SBU) Comment: The group,s focus on ATPA renewal was
notable. These business leaders have been through the
renewal process a number of times, and many have lobbied for
it personally. In a follow-on discussion, Chamber of
Commerce President Alarcon told the CG that business leaders
were mildly panicked about renewal this time. Regional
developments have the commercial sector very worried.
Alarcon said that as soon as the news hit over Ambassador
Goldberg,s removal from Bolivia, local business leaders were
calling Alarcon to ask for her analysis on the impact on ATPA
renewal.

8. (SBU) Comment continued: The Guayaquil business community
has consistently had a more distant and skeptical
relationship with the Correa Administration than has the
Sierra business communities in Quito and Cuenca. The
Ambassador's business interlocutors in Guayaquil focused on
the debilitating effects of economic uncertainty, and
evidently do not have much access to the Correa government.
In contrast, many members of the largely Quito-based U.S.
business community report that they can work with the Correa
administration, although they are also concerned about the
unpredictable business climate (reftel).
End comment.
GRIFFITHS

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