313. Airgram From the Embassy in Ecuador to the Department of State1 2

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[Omitted here is a table of contents]

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The new government has made clear that an improvement in U.S.-Ecuadorean bilateral relations, even the resumption of a military relationship, cannot take place while the FMS suspension remains in effect. We believe that the time has come when the U.S. should find some formula to take this symbolic step. At the same time we believe that AID loans approved prior to January 1971 should be implemented.

In regard to the role of the U.S. in the economic and social development of Ecuador, the Country Team is divided. The majority view holds that in view of the improvements that can be foreseen in the GOE’s financial situation, as well as the ongoing assistance from multilateral donors, the U.S. should now put the capital assistance program on an ever-declining scale. This view also contends that political problems intrude so heavily in our capital assistance program that it carries liabilities equal, or even disproportionate, to its benefits to U.S. interests.

The USAID Mission and the Chief of the Economic Section do not accept this view and recommend instead that the level of U.S.-capital assistance continue to be programmed at about $20 million annually.

We have made a promising beginning on a program of cooperation in drug control. However, greater U.S. assistance will be needed if we are to achieve the ambitious goal of halting drug trafficking to the U.S.

Apart from our direct interests in Ecuadorean oil (and, potentially, natural gas) and the preservation of at least non-hostile bilateral relations, the U.S. stake in Ecuador is limited. Nonetheless, the U.S. profile in Ecuador remains high, with U.S. agencies and U.S. personnel active in many areas of Ecuadorean life. Our large presence in Ecuador not only reinforces traditional attitudes that the U.S. is responsible for everything that happens in Ecuador, but also suggests itself as a lever by which the GOE can attempt to [Page 3] influence the U.S. Several times in the past two years, specific recommendations for reductions have gone forward to Washington, but no affirmative action was ever taken on them. We should continue to be alert to opportunities to reduce our presence, and, at a minimum we should seek to maintain official U.S. activities and personnel at no greater than current levels.

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Ecuador continues to be important to the U.S. national interest in two respects.

First, the U.S. has a positive interest in continued access to Ecuador’s petroleum and gas reserves. The growing concern over U.S. energy requirements underlines the significance of the oil and gas deposits.

Secondly, the U.S. desires to avoid bad relations with Ecuador which might have adverse effects on U.S. relations and interests elsewhere in the hemisphere and which might also lead the Ecuadoreans to seek close relations with states hostile to the U.S. The obstacle to good U.S.-Ecuadorean relations continues to be the fisheries dispute. This dispute not only threatens indirectly to affect our access to Ecuadorean oil, but also serves as a point of tension which strains U.S. relations with Latin America in general.

For over a year since January 1971, the U.S. has concentrated on finding a solution to the fisheries dispute, as the most direct approach to protecting U.S. interests in Ecuador. During that period, foreign ministers came and went and eventually the government itself was taken over by the military. Despite these changes and despite U.S. efforts, the dispute is no closer to a solution than it was a year ago.

Under these circumstances, it would seem wise to lessen our exclusive emphasis on fisheries and seek ways to protect our other interests. The recommended approach is based on the belief that better relations can be achieved even in the absence of a settlement of the fisheries problem. The key to such better relations will be our relations with the Ecuadorean military.

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1. In the absence of a definitive solution to the fisheries dispute, how should the US plan to preserve satisfactory government-to-government relations with Ecuador in order to protect and advance its other interests?

2. How should the US plan to preserve its traditionally close relationship with the Ecuadorean military establishment?

3. How should the US plan to advance its interest in the economic and social development of Ecuador?

4. How can the US help to minimize the risk of a large-scale confrontation between the GOE and Texaco-Gulf when the T–G concession is renegotiated in 1972, knowing full well that such a confrontation, with its attendant risks of expropriation and retaliations, could jeopardize all US interests in Ecuador?

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[Omitted here is a FY 1973 Policy and Resource Planning Table; Section II, “Analysis of Major Issues;” Section III, “Policy and Resource Analysis;” and Annex A.]

  1. Source: National Archives, RG 59, Central Files 1970–73, POL 1 ECUADOR–US. Secret. Background information on Rodríguez’s takeover is in telegrams 680 and 1462 from Quito, February 18 and April 13, respectively; ibid., POL 15 ECUADOR.
  2. This section of the Country Analysis and Strategy Paper (CASP) assessed U.S.-Ecuadorian relations since General Rodríguez led a military take-over of the Ecuadorian Government on February 16. The main interests of the United States in Ecuador were to maintain access to oil and gas reserves and to avoid acrimonious relations with Ecuador in order to prevent it from establishing ties to countries hostile to the United States. A key component of maintaining harmonious relations with Ecuador was a resolution of the fishing dispute.