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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 16:25 2011-05-02 00:00 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