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 001407 
 
SIPDIS 
 
E.O. 12958: N/A 
TAGS: PGOV PREL EC
SUBJECT: VP Discusses FTA, Referendum, and Gutierrez 
 
 
¶1.  Summary.  Vice President Alejandro Serrano Aguilar met 
June 15 with the Ambassador for breakfast.  He discussed his 
support for the US-Andean Free Trade Agreement (FTA), the 
upcoming public dialogue process and referendum, and ex- 
President Gutierrez's anti-GOE commentary from Washington. 
Serrano said that the popular referendum would not address 
the FTA.  Serrano's daughter, Ana Maria Serrano, was also 
present and described her experience as a flower exporter to 
explain her support for Ecuadorian participation in free 
trade negotiations.  End summary. 
 
Despite No-Show, VP Supports FTA Agreement 
------------------------------------------ 
 
¶2.  Serrano opened the June 15 breakfast by discussing his 
and President Palacio's views of the FTA round that was held 
June 6-10 in Guayaquil, emphasizing that they considered 
this round to be a technical negotiation between trade 
ministries.  He claimed that neither Palacio nor he attended 
the session because they did not want to make it highly 
political, causing free trade opponents to organize 
protests.  Despite his absence, he firmly supports the FTA 
and believes that Ecuador critically needs this market 
access.  He said he was surprised by the amount of support 
that exists within Ecuador for free trade, including among 
artisans seeking new markets for their goods.  Serrano 
explained that his opinion on this is shaped by the fact 
that he is from Cuenca, which he compared to Chicago as an 
apolitical commercial center. 
 
¶3.  Serrano's daughter, Ana Maria Serrano, also participated 
in this conversation, explaining why the FTA negotiations 
are important to her as an exporter of flowers in Cuenca 
(Ecuador's third largest city).  She explained that while 
Ecuador produces flowers with more brilliant colors, they 
have much competition from Colombia, which has cheaper labor 
and is closer to the U.S.  She stressed the fact that 
Ecuador must participate in these rounds because they need a 
good trade deal to remain competitive.  She also mentioned 
the fact that Andean Trade Promotion and Drug Eradication 
Act (ATPDEA) trade benefits run out soon.  The Ambassador 
invited her to visit the Embassy to discuss free trade in 
more detail with the economic section. 
 
VP Working With Popular Assemblies on Referendum 
--------------------------------------------- --- 
 
¶4.  Serrano also discussed the upcoming popular referendum, 
currently scheduled for December 11, for which he is in 
charge of preparation.  He stressed that the FTA agreement 
will not be put on the referendum, as it is a treaty that is 
unsigned and does not officially exist; he has made this 
clear to many Ecuadorian political leaders.  In order to 
organize this referendum, he is working closely with the 
popular assemblies to create questions and a format for 
citizen input.  The assemblies agree with his vision for the 
referendum and are eager to participate in the process. 
Serrano mentioned that most of these representatives present 
wishlists to him while discussing the referendum, 
demonstrating that regional issues continue to dominate 
outside of Quito, mainly focused on economic progress. 
 
¶5.  Serrano said that it will be difficult to translate the 
referendum questions into language that the general 
population can understand.  He stated that the referendum 
will have very few questions.  When the Ambassador asked if 
that meant five or less, he replied affirmatively.  The 
Ambassador also mentioned that he will have to work with the 
Ecuadorian Congress on this process.  Serrano replied that 
he hoped that his prior service as a Congressman would help 
him in this coordination, as he understands the 
Congressional culture and protocol. 
 
Gutierrez Has Right to Free Speech 
---------------------------------- 
 
¶6.  The Ambassador introduced the topic of ex-President 
Lucio Gutierrez's comments from Washington disparaging 
Ecuador's current administration and his unconstitutional 
ouster.  She advised Serrano to allow Gutierrez to express 
his free speech, stating that the USG can only step in if he 
violates the terms of his visa.  Serrano responded by 
thanking the Ambassador for discussing the issue and 
agreeing that, while it is not a great situation, Gutierrez 
has the right to make whatever statements he wishes. 
 
Comment 
------- 
 
¶7.  The Ambassador was impressed with Serrano's common sense 
and mature approach to politics.  She especially noted the 
care with which Serrano is building the popular referendum 
with support from the popular assemblies.  The breakfast 
provided a good opportunity to build better relations with 
Serrano and his daughter, and the Embassy will continue to 
maintain close contact with Serrano to monitor the 
development of the referendum process. 
 
 
KENNEY