Foreign Relations of the United States, 1961–1963, American Republics; Cuba 1961–1962; Cuban Missile Crisis and Aftermath, Volumes X/XI/XII, Microfiche Supplement

104. Memorandum of conversation, July 24, between President Arosemena and Acting Secretary Ball and U.S. and Ecuadorean officials¹

July 24, 1962

SUBJECT

• Meeting between President Arosemena and Acting Secretary Ball

PARTICIPANTS

• Ecuador

  • President Carlos Julio Arosemena
  • Minister of Foreign Affairs Benjamin Peralta Paez
  • Ambassador Neftali Ponce-Miranda
  • Minister of Treasury Manuel Naranjo Toro
  • Former Minister of Economy Federico Intriago
  • Guillermo Arosemena Coronel, Manager of the Guayaquil Branch of the Central Bank
  • Dr. Germanico Subia, Technical Director of the National Planning Board

• United States

  • Acting Secretary George Ball
  • Assistant Secretary Edwin M. Martin
  • Ambassador Maurice M. Bernbaum
  • Mr. Moscoso, Assistant Administrator, AID
  • Mr. Belcher, Director of West Coast Affairs, State
  • Mr. Robinson, Director of West Coast Affairs, AID

Secretary Ball started the meeting by indicating that a joint group had been meeting earlier in the day to review some of the questions that had been raised during the White House meeting on July 23, and that Assistant Secretary Martin would proceed to brief President Arosemena with regard to the most recent developments.

Assistant Secretary Martin indicated that he had been very impressed with the outstanding character of the Ecuadorean delegation with which he and his advisers had discussed a number of fiscal and economic programs. These programs included a series of reforms that Ecuador had undertaken or was about to undertake and a review of some of the difficulties the country has had with the special emphasis on the need to control the expansion of credit and the economic repercussions of pending legislation affecting the collection of taxes and of import duties. There had also been a discussion of how Government income as a result of tax and tariff reforms would decrease during the next few months. The United States now felt that two specific questions would have to be answered in order to solve some of the difficulties that might be encountered in explaining the need for budgetary loans to Ecuador to the United States Congress. Mr. Martin reminded the President of the question that it so often asked; namely, why should the American taxpayer have to pay taxes to help other countries whose taxpayers refused to do the same? The two specific questions were: (1) To what extent can the amount of external budgetary support be decreased and still solve Ecuador’s basic problem? It was the understanding of the United States that a reduction from $14 million to $7 million would not seriously hamper Ecuador’s efforts and would still achieve the desired results. Secondly, in order to satisfy the American Congress and people, the United States would have to be assured that this would not become a permanent arrangement. The public should realize that this is a joint effort and that American assistance should go hand-in-hand with corrections of the causes of Ecuador’s present capital budget deficiency.

Ambassador Moscoso reemphasized the main points made by Mr. Martin and stated that it would be very desirable to reach a solution before the 4:00 o’clock meeting of the two Presidents today.

President Arosemena thanked the Acting Secretary for his briefing and stated that it confirmed the interpretation given him by the members of his delegation. He expressed the hope that specific conclusions would be reached this afternoon. He stated that the discussion of Ecuador’s problems had been very useful, that the time had come to solve the problems since another delay in their solution might well prove to be tragic. Ecuador understands that the United States has many problems in trying to aid all the countries in the world, and it also realizes that each country should solve its problems on the basis of its own efforts. However, without foreign assistance this process would be both slow and painful.

Mr. Salgado referred to a memorandum regarding Ecuador’s economic development with a summary of its past and future loan applications. He distributed copies to all present.

President Arosemena asked Ambassador Ponce to bring up the question of Ecuador’s sugar quota. Ambassador Ponce stated that Ecuador had been assigned a yearly quota of 25,000 tons of sugar which would benefit the country a great deal, although it was only a 2 or 2½ year arrangement. It was his understanding that during 1962 there would be a 300,000 ton deficit in supply of sugar to the United States which could not be covered by many of the supplying countries. The Ambassador therefore requested that sympathetic consideration be given to the possibilities of importing up to 41,000 tons of Ecuadorean sugar during this year which could be made available immediately since it was being stored in Guayaquil.

President Arosemena expressed his concern with regard to the recent Government changes in Peru and reiterated his fears as stated in his meeting with President Kennedy on July 23. He expressed his concern in the context of the United States position as one of the guarantors of the 1942 Rio Protocol. He said that Ecuador did not accept the Rio Protocol and considered it to be incompatible with the rule of law. However, the Peruvian-Ecuadorean dispute could and should be solved by peaceful means and Ecuador would drastically oppose the use of force to solve this paramount issue. “We will never become aggressors, but we will defend our country to the utmost”, said President Arosemena. This would have to be done to avoid what he described as his country’s mutilation in 1941.

Secretary Ball thanked the President and stated that he would take careful note of everything he had said and Assistant Secretary Martin emphasized that the United States could of course not approve any such action as the President feared.

Secretary Ball stated that he would like to bring up a problem of great interest to the United States—that of fisheries. During the month of June the Ecuadorean Government passed a decree setting up an area that was 125 miles long and 40 miles wide as an area in which, in effect, fishing by other than Ecuadoreans was prohibited. Aside from the fact that we do not agree on what constitutes territorial waters, tuna fishing off the coast of Ecuador was an important industry that benefited a number of western states in the United States. The United States realized that the Ecuadorean decree had not been enforced and we hoped that a satisfactory solution to this problem would be found through the efforts of the experts which we had sent to Ecuador to study the problem.

President Arosemena replied that he had discussed this problem with Ambassador Bernbaum in Quito and that he had reached an agreement with the Ambassador. The Ecuadorean decree would not be put into force until American experts in the field of fisheries had completed a study of the situation. He stated that the Ecuadorean decree was nothing but “a manifestation of a country’s criteria as to the extent of its territorial waters”. Ecuador was concerned with the possible disappearance of fish and the destruction of one of its richest natural resources. Ecuador could not oppose other countries if they wished to exploit the riches of the seas, but it would defend its own natural resources with a very logical sense of self-interest. He added that some experts in Ecuador, rightly or wrongly, claimed that “pirate ships” had been using dynamite in order to catch more tuna. This could cause great harm. Secretary Ball stated that it was his understanding that the report of the experts was about to be completed and he was certain that a satisfactory solution could be reached.

President Arosemena thanked the Secretary for giving him a chance to discuss some of his country’s problems.

1. Financial and economic situation in Ecuador. Confidential. 4 pp. Kennedy Library, NSF, Country Series, Ecuador, April–August, 1962.