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Cablegate: Minister of Agriculture On Fta, Eu Banana Tariff

This record is a partial extract of the original cable. The full text of the original cable is not available.

UNCLAS SECTION 01 OF 02 QUITO 002938

SIPDIS

PASS TO USDA/FAS/FAA/BAILEY, USDA/FAS/ITP/MACKE/BERTSCH,
LIMA REGIONAL AGATT, USTR/HARMAN/LATIMER

E.O. 12958: N/A
TAGS: EAGR ETRD ECON EAID EC FTA
SUBJECT: MINISTER OF AGRICULTURE ON FTA, EU BANANA TARIFF
AND WEATHER EMERGENCY

1. SUMMARY: In a December 15 courtesy call on Minister of
Agriculture Pablo Rizzo, Ambassador Jewell stressed that
Ecuador would need to improve its agricultural proposals in
the FTA negotiations. Rizzo stated that Ecuador wants to sign
an FTA with the United States but is still looking for
exceptions on a number of agricultural products. Rizzo also
requested U.S. assistance of $4 million to counter the
effects of the recent drought and freezes. Finally, Rizzo
voiced concern that the EU continues to call for high tariffs
on bananas. End Summary.

2. On December 15, Ambassador Jewell paid a courtesy call on
Ecuadorian Minister of Agriculture Pablo Rizzo. The current
emergency in the agricultural sector, the European Union (EU)
banana tariff issue and the status of the FTA agriculture
negotiations were the main points of the cordial
conversation. On the EU banana tariff issue, Rizzo expressed
dismay with the results of negotiations during the Hong Kong
WTO meetings. Rizzo indicated that Ecuador is willing to sign
an FTA with the United States, but that some agricultural
products should be excluded. The Ambassador said that Ecuador
should improve its agricultural proposal before negotiations
continue in 2006. In addition, Rizzo explained about the
current agricultural sector emergency and requested
assistance from the United States. The meeting also included
Vice Minister of Agriculture Hernan Chiriboga, Advisor to the
Minister, Marco Uzca, and USDA Agricultural Specialist, Rene
Alarcon.

EU BANANA TARIFF
-------------------------------

3. Minister Rizzo began the meeting with Ambassador Jewell by
expressing the Government of Ecuador's (GOE) gratitude to the
United States for its continued support to Ecuador's position
in its debate with the EU regarding bananas. Rizzo expressed
dismay with the EU offer of 176 euros per ton. He doubted
that the issue would be resolved at the WTO Ministerial
meeting in Hong Kong and indicated that the Ecuadorian
Minister of Trade, Jorge Illingworth, would need to have
further negotiations with the EU. The Ambassador sympathized
with the Ecuadorian's problem with the EU, citing the U.S.
battle over export subsidies.

AGRICULTURE AND THE FTA
--------------------------------------------- -

4. (U) Rizzo said that Ecuador is willing to sign an FTA with
the United States, but with certain exclusions. Although he
recognized that the conclusion of Peru's negotiation with the
United States would limit Ecuador's margin of negotiation, he
maintained that the agricultural sectors of Ecuador and Peru
are different. Rizzo stated that Peru is a net agricultural
importer and therefore would be in a position to open its
markets for products that are too sensitive for Ecuador such
as rice, dairy and beef. (Comment: Ecuador's favorable
balance of agricultural trade is based on its sales of
bananas, seafood and flowers. Their argument for exceptions
is based on maintaining protectionist policies for the
agricultural sector. End Comment.) Rizzo said that one of
his concerns in case Ecuador does not sign the agreement is a
possible increase in smuggling of products from Peru into
Ecuador. Rizzo also asked about the USG,s response to the
last offer made by Ecuador on agriculture.

5. (U) The Ambassador said that Colombia had recently made an
improved offer to USTR, which was being reviewed. She said
that it is unlikely that negotiations would move forward with
the terms of Ecuador's last offer and that it would be
advisable for Ecuador to deliver an improved offer before
setting a date for new negotiations in 2006.

DECLARATION OF EMERGENCY IN THE AGRICULTURAL SECTOR
--------------------------------------------- ------

6. (U) Following a request by the Ministry of Agriculture
(MAG), the GOE declared a state of emergency for the
agricultural sector of Ecuador due to recent weather
problems. Emergency relief funds of approximately $30 million
will be made available to farmers in both the coastal and
sierra regions. Drought conditions in the coastal areas have
caused the death of approximately 2,000 head of cattle in the
past few weeks and delays in the planting season of crops
such as rice and corn. At the same time, the lowest
temperatures in 25 years in the central highlands caused crop
freezes that destroyed nearly 20,000 hectares of crops,
mostly fruits, vegetables and flowers. Minister Rizzo
requested $4 million worth of U.S. assistance for irrigation
projects to relieve the drought situation on the coast. The
Ambassador responded that current assistance funds are
limited and that it would be difficult to finance such a
large amount of money, but promised to look into the matter.
JEWELL

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