334. Telegram From the Department of State to the Embassy in Ecuador 1

39022. Subject: PL–480 Sales Agreement. Ref: State’s 33719.2 Joint State/AID Message. For Coerr from Oliver.

1.
PL–480 memorandum covering 15,000 MT wheat and 582 MT tobacco and tobacco products has been approved in principle but not yet formally. Delay in obtaining approval reflects continuing concern at highest level over GOE’s criticisms of U.S. trade and AID policies expressed during Punta del Este Conference.3
2.
Accordingly, I am requesting Ecuadorean Ambassador to call upon me afternoon September 19, for purpose not only disclose high level approval but also indicate to Ambassador difficulties posed for USG by irresponsible statements of government receiving assistance from USG.
3.
I recognize this may eliminate some of impact which you hoped to gain by announcement there. However, I consider it essential disabuse Arosemena of assumption that he has special relationship with high level USG officials.
4.
Negotiating authorization re PL–480 Agreement will be forthcoming ASAP following September 19 meeting.
5.
Would appreciate any comments or suggestions you may have Prior to September 19 meeting.4
Rusk
  1. Source: National Archives and Records Administration, RG 59, Central Files 1967–69, AID(US) 15–8 ECUADOR. Confidential; Immediate; Limdis. Drafted by J.F. Smith; cleared by Berlin, Sayre, and Fowler; and approved by Oliver.
  2. In telegram 33719 to Quito, September 7, Oliver reported: “Final decision on PL–480 sales agreement highly unlikely this week. I am working on matter but could not assure you response will be favorable.” (Ibid.)
  3. According to Robert M. Phillips, chief of the Embassy’s political section, Johnson was so displeased at the thought of rewarding Arosemena with the PL–480 loan that “it was only on the fourth try that the President relented and then solely on condition that Covey Oliver would call in Carlos Mantilla and let him know that we were getting tired of Ecuadorean griping about the conditions of aid.” (Letter from Phillips to Coerr, September 26; ibid., ARA/EP/E Files: Lot 70 D 247, POL 15 Arosemena Government)
  4. Coerr’s comments are in telegrams 1033 and 1034 from Quito, September 19. (Ibid., Central Files 1967–69, AID(US) 15–8 ECUADOR) After receiving a written report on the meeting with Mantilla, Johnson approved Oliver’s recommendation “to inform Ambassador Coerr that he may proceed with negotiations.” (Memorandum from Rostow to the President, September 19; Johnson Library, National Security File, Country File, Ecuador, Vol. I, 12/63–11/68)