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### Viewing cable 05QUITO2938, MINISTER OF AGRICULTURE ON FTA, EU BANANA TARIFF

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Reference ID | Created | Released | Classification | Origin
--- | --- | --- | --- | ---
05QUITO2938 | 2005-12-27 16:04 | 2011-05-02 00:12 | UNCLASSIFIED | Embassy Quito

`

    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

`