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### Viewing cable 09MEXICO2264, SCENESETTER FOR PRESIDENT OBAMA'S VISIT TO

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Reference ID | Created | Released | Classification | Origin
--- | --- | --- | --- | ---
09MEXICO2264 | 2009-07-31 20:08 | 2011-03-02 12:12 | CONFIDENTIAL | Embassy Mexico
Appears in these articles: http://wikileaks.jornada.com.mx/notas/encuentros-entre-obama-y-calderon

`

    VZCZCXRO1625
    RR RUEHCD RUEHGD RUEHHO RUEHMC RUEHNG RUEHNL RUEHRD RUEHRS RUEHTM
    DE RUEHME #2264/01 2122055
    ZNY CCCCC ZZH
    R 312055Z JUL 09
    FM AMEMBASSY MEXICO
    TO RUEHC/SECSTATE WASHDC 7694
    INFO RUEHXC/ALL US CONSULATES IN MEXICO COLLECTIVE
    RHMFISS/DEPT OF JUSTICE WASHINGTON DC
    RUEHC/DEPT OF LABOR WASHINGTON DC
    RUEATRS/DEPT OF TREASURY WASHINGTON DC
    RUCPDOC/DEPT OF COMMERCE WASHINGTON DC
    RHMFISS/CDR USSOUTHCOM MIAMI FL
    RHMFISS/HQ USNORTHCOM
    RUEAHLA/DEPT OF HOMELAND SECURITY
    RUEABND/DEA HQS WASHINGTON DC
    RHEHAAA/NSC WASHINGTON DC

` `

    219064
    2009-07-31 20:55:00
    09MEXICO2264
    Embassy Mexico
    CONFIDENTIAL
    09MEXICO60
    VZCZCXRO1625
    RR RUEHCD RUEHGD RUEHHO RUEHMC RUEHNG RUEHNL RUEHRD RUEHRS RUEHTM
    DE RUEHME #2264/01 2122055
    ZNY CCCCC ZZH
    R 312055Z JUL 09
    FM AMEMBASSY MEXICO
    TO RUEHC/SECSTATE WASHDC 7694
    INFO RUEHXC/ALL US CONSULATES IN MEXICO COLLECTIVE
    RHMFISS/DEPT OF JUSTICE WASHINGTON DC
    RUEHC/DEPT OF LABOR WASHINGTON DC
    RUEATRS/DEPT OF TREASURY WASHINGTON DC
    RUCPDOC/DEPT OF COMMERCE WASHINGTON DC
    RHMFISS/CDR USSOUTHCOM MIAMI FL
    RHMFISS/HQ USNORTHCOM
    RUEAHLA/DEPT OF HOMELAND SECURITY
    RUEABND/DEA HQS WASHINGTON DC
    RHEHAAA/NSC WASHINGTON DC

    C O N F I D E N T I A L SECTION 01 OF 05 MEXICO 002264

    NOFORN
    SENSITIVE
    SIPDIS

    FOR THE PRESIDENT FROM CHARGE D'AFFAIRES JOHN FEELEY.
    NSC FOR DAN RESTREPO.
    WHA FOR ROBERTA JACOBSON, E.A. LEE.

    E.O. 12958: DECL: 12/21/2017
    TAGS: PGOV PREL PHUS PINR KCRM SNAR MX
    SUBJECT: SCENESETTER FOR PRESIDENT OBAMA'S VISIT TO
    GUADALAJARA, AUGUST 9-10,2009

    Classified By: CHARGE D'AFFAIRES JOHN FEELEY.
    REASON 1.4 (b), (d).

    ¶1.  (C) Key Points

    --President Calderon remains committed to forging a legacy
    based on the rule of law, where Mexico's criminal
    organizations are severely diminished, and the benefits of
    Mexico's wealth and trade are more widely shared among its
    citizens.  At the same time, he faces record levels of
    violence, continued financial distress, problems within his
    political party, and diminished power in Congress following
    his PAN party's loss in recent midterm elections.  Inequality
    and poverty are on the rise, and the Mexican public
    increasingly questions whether the war against drug
    trafficking and organized crime is winnable. Despite these
    challenges, President Calderon remains resolute.  He fully
    understands and appreciates that our commercial and law
    enforcement interdependence is complete and necessary.  He
    looks to build stronger strategic alliances with us to
    advance common goals in the areas of North American
    competitiveness, energy and the environment, and citizen
    security.

    --President Calderon will want to engage you on an impossibly
    wide range of issues, but he will focus most intently on the
    domestic security challenges Mexico faces from criminal
    violence.  He will convey appreciation for U.S. cooperation
    to date, but press hard for an explicit commitment to outyear
    funding beyond the original three years of the Merida
    Initiative.  He will also push for greater efforts to stem
    the flow of illegal arms and drug money into Mexico.  You
    should ask that the GOM provide a more transparent account
    for how it handles accusations of human rights violations,
    especially in the military court system, access by ATF to
    seized weapons caches, and the extradition of high profile
    cartel members, not just low-ranking lieutenants.

    --The United States and Mexico have a broad and growing
    relationship on energy that encompasses oil, gas, clean
    energy, and new collaboration on renewables, climate change,
    and carbon reduction.  Mexico is emerging as a leader among
    developing countries on clean energy and climate change and
    is a willing partner in expanding cooperation on such
    endeavors.  In fact, President Calderon would like to see
    greater U.S. engagement on environmental issues, recognizing
    it as an area of mutual interest.

    --While Mexico has taken significant steps to achieve
    macroeconomic stability and is the second largest economy in
    Latin America, GDP growth rates averaged only 2 percent over
    the past ten years, and reforms have been slow in coming.
    Despite the urgency of fighting the recession, structural
    tax, energy, and fiscal reforms and increased competitiveness
    are essential elements of a long-term, sustained recovery.
    We can join with Canada in urging the GOM to pursue a
    competitiveness agenda in the education, labor, trade and
    finance sectors, as well as encourage modern, efficient use
    of Mexico's petroleum and other energy sources.

    --Eighty-two percent of Mexico,s exports go to the United
    States, and we remain by far the country's largest source of
    foreign investment.  Mexico is the first or second largest
    trading partner for 22 U.S. states.  Mexico's long-term
    prospects for growth and prosperity are tied to ours, and
    President Calderon is particularly mindful of the positive
    impact NAFTA has had on both our economies.  Trade irritants
    still persist, such as the delay in reformulating a pilot,
    cross-border trucking program and our revised
    country-of-origin labeling (COOL) provisions for beef and
    pork products.  Nevertheless, the GOM wants to resolve these
    and other concerns without reopening the agreement.

    --Mexico and Canada seek to deepen diplomatic cooperation, as
    Canada has identified stronger ties with the Americas as a
    foreign policy priority. Canada is increasingly concerned

    MEXICO 00002264  002 OF 005

    about Mexico's security situation, and is looking for avenues
    to support President Calderon's efforts to reform the police,
    corrections, and judicial sectors.  Although Canada remains
    at times concerned that trilateralism comes at the expense of
    its bilateral relationship with the United States, Canada
    values the trilateral summit process and will seek to sharpen
    focus on the leaders' engagement on climate, energy and the
    environment.

    Citizen Security
    ----------------

    ¶2. (U) President Calderon continues to confront Mexico's
    difficult security environment with unprecedented commitment.
     Polling indicates that most Mexicans still approve of his
    efforts, which include deploying some 45,000 troops dedicated
    to counter-drug activities, yearly increases to the security
    budget, and the passage of important security and justice
    reforms to modernize and restructure the country's judicial
    system.  Mexicans also recognize the need to improve and
    better coordinate the country's disparate police forces.
    While polling indicates that the Mexican public believes that
    the cartels are winning, over half of the population supports
    President Calderon's security strategy and upwards of 80
    percent agree with the military's domestic deployment in the
    counter-drug fight.

    ¶3. (SBU) Nevertheless, the President faces significant
    challenges despite his myriad efforts to improve the
    country's security situation.  Levels of violence show no
    signs of decreasing, with organized crime-related homicides
    and casualties suffered by security forces in the counterdrug
    fight likely to surpass 2008's record figures.  Allegations
    of human rights abuses by soldiers deployed on counterdrug
    missions threaten to undermine continued public support.
    While there is general consensus on President Calderon's
    frontal assault strategy, the new political environment
    following the July 5 midterm elections, in which his rivals
    made significant gains, could embolden his opponents and make
    the passage and implementation of important legislation more
    complicated.

    ¶4. (C) In light of these complications, President Calderon
    needs our unalloyed support.  The Merida Initiative provides
    important material support to President Calderon's strategic
    goals.  As important, it demonstrates our shared
    responsibility and resolve in facing up to the challenges
    posed by transborder organized crime.  While this initiative
    was originally conceived of as a three-year plan, it is now
    clear that we and the Mexican government must continue our
    cooperation and assistance.  We now need to focus on the
    state and local level institution building, given Mexico's
    strong federal system and the need to address security issues
    locally.  U.S. assistance is modest compared to what Mexico
    is doing on its own, but it is critical to keeping the
    country moving in the right direction.  You should make the
    following points:

    -- We can expect that President Calderon will press the
    United States to take stronger measures to fight arms
    trafficking.  Reinforce with him that we have stepped up our
    deployment of resources under the Southwest Border Initiative
    to combat arms flows.  You should also note that success
    relies in large measure on tracing the weapons Mexico has
    seized from criminals.  We are making progress on developing
    protocols with Mexican law enforcement agencies to expand our
    access to seized weapons, but it would be helpful if you
    requested Calderon push the process along.

    -- You should also be prepared to speak to the status of
    Merida Initiative funds, including how reports of rising
    human rights abuses stand to impact their delivery and
    overarching support in Congress.  We have prepared a report
    to Congress on Mexico's human rights efforts to secure the
    release of the 15 percent of funding, as required by law.
    While the GOM, and particularly the military, must do more,

    MEXICO 00002264  003 OF 005

    we see their efforts beginning to take shape.  On July 24,
    the Mexican military (SEDENA) issued a press release stating
    it had convicted 12 soldiers for human rights abuses since
    ¶2006.  This kind of announcement is positive for the case
    SEDENA makes in response to charges of impunity, and it also
    flies in the face SEDENA's historical aversion to addressing
    such issues in public.  But more military transparency with
    us and the NGO community on human rights issues is needed.

    -- Mexico has extradited record numbers of criminals over the
    last two years and has sent back 63 wanted criminals already
    this year.  However, only one of these is a major cartel
    figure -- Miguel Caro Quintero.  While commending Calderon on
    extradition in general, push for the extradition of
    high-level figures, such as Benjamin Arrellano Felix and
    Sandra Avila Beltran.

    -- The Mexicans are hyper-sensitive to any notion of
    deploying National Guardsmen to our shared border.  You may
    consider briefing Calderon on this plan, its purpose and what
    it entails before it becomes public.

    --You should thank Calderon for Mexico's outstanding
    participation in the recently concluded National Level
    Exercise focusing on terrorism prevention.  Mexico's
    contribution to the program highlights its increased trust
    and willingness to work with us on important security issues.

    Energy, Health, and the Environment
    -----------------------------------

    ¶5. (C) We have a broad and growing relationship on energy
    that encompasses oil, gas, clean energy, and the beginnings
    of cooperation on renewables, climate change, and carbon
    reduction.  As our fourth largest supplier of oil, Mexico's
    production and exports are falling rapidly.  In late 2008,
    the Mexican Congress approved a modest energy reform package,
    breaking a taboo prohibiting past administrations from
    addressing the highly sensitive topic.  The reform does not,
    however, address the most pressing issues facing Mexico's
    state-owned oil company (PEMEX).  Since oil accounts for over
    one third of Mexican budget revenues, the Calderon government
    must find ways to offset declining oil revenues in order to
    keep the fiscal deficit under control.  Successful bilateral
    talks on Transboundary Reservoirs in the Gulf of Mexico might
    help lead over the long-term to more efficient exploitation
    of oil and help Mexico treat a pending fiscal crunch.

    ¶6. (C) Mexico is emerging as a leader among developing
    countries on clean energy and climate change and is a willing
    partner in expanding cooperation on such endeavors.
    President Calderon would like to see greater U.S. engagement
    on environmental issues, recognizing it as an area of mutual
    interest.  We are working to reach agreement on strategies
    for the December 2009 Copenhagen Conference of Parties on
    climate change.  The U.S. -- Mexico Framework on Clean Energy
    and Climate Change has established a formal mechanism for
    collaboration, information exchange, and facilitating common
    efforts to achieve clean energy economies.  Mexico is working
    at home to promote energy efficiency, the use of clean energy
    sources, and the reduction of its reliance on hydrocarbons.
    Mexico also recently announced a national energy transition
    and sustainable energy strategy that will funnel $1.5 billion
    to implement more than 50 projects in order to foster the use
    of new technologies to generate renewable energy, create
    standards for energy efficiency, and diversify energy
    sources.

    ¶7. (U) The outbreak in April of the H1N1 virus highlighted
    the value of and continued need for international
    collaboration on health issues.  Mexico's rapid response to
    the outbreak and transparency in communicating with
    international partners helped slow the spread of the virus
    and mitigated the loss of life.  Swift and efficient
    cooperation between the United States, Mexico and Canada
    during the outbreak demonstrated the value of trilateral

    MEXICO 00002264  004 OF 005

    preparations to address cross-border health threats, and
    Mexico was grateful to the United States for our balanced
    response and decision not to halt or slow cross-border
    activities.  Nevertheless, the Calderon government's swift
    response came also with high economic costs, particularly for
    tourism, small businesses and pork producers.  Mexico,s
    finance minister predicted that the economic impact of the
    crisis could be between 0.3 and 0.5 percent of Mexico,s GDP,
    which was US $1.14 trillion in 2008.  Following HHS Secretary
    Sebelius' successful visit to Cancun on July 2 at the
    W.H.O.'s  H1N1 conference, your public affirmation of the
    GOM's strong performance will help keep the government
    focused for the expected return of H1N1 this fall.

    Competitiveness
    ---------------

    ¶8. (SBU) Mexico has taken significant steps to achieve
    macroeconomic stability.  It is the second largest economy in
    Latin America and the region's top destination for U.S.
    foreign direct investment.  Mexico has long leveraged its
    cultural and geographic proximity to the United States market
    to its economic advantage. Despite this, Mexico,s GDP has
    grown just 2 percent annually over the past 10 years, totally
    insufficient to achieve the 7-8 percent growth rate necessary
    to address social inequities, make inroads against the
    40-plus percent poverty level, and modernize the economy.

    ¶9. (SBU) Structural reforms have been slow in coming due to
    political stalemates and powerful entrenched interests.
    Education levels, tax collection, and transparency remain low
    by both OECD and regional standards. In 2009, the World
    Economic Forum ranked Mexico 60 among 134 countries in its
    Global Competitiveness Index.  Mexico fell far short in labor
    market efficiency (110), institutions (97), innovation (90)
    and higher education and training (74).  Calderon knows this
    and wants desperately to improve Mexico's competitiveness,
    achieve dynamic growth, and increase prosperity.
    ¶10. (C) However, structural reforms and increasing
    competitiveness are essential elements of a long-term,
    sustained recovery regardless of the current recession or
    hoped-for 2010 recovery in the United States.  We and Canada
    can urge the GOM to pursue a competitiveness agenda in
    education, labor, trade and finance, as well as encourage the
    efficient use of Mexico,s petroleum and other energy sources
    to make them more competitive. Cross-Border Trade
    Facilitation is another area for improvement.  It is in our
    mutual interest for Mexico to increase trade with its
    neighbors and commercial partners.  The GOM must increase
    customs revenue and reduce customs revenue leakage caused by
    rampant corruption. With Canada, we can continue work to
    enhance Mexico,s capacity in customs and trade facilitation,
    which will improve the environment for international trade
    and transit.  Mexico also suffers from monopolies and
    oligarchies that should be addressed through strengthened
    competition authorities.  At the same time, Mexico must
    tackle head-on the politically difficult issue of education
    reform, or the next generation of Mexicans will not be
    prepared to respond to the needs of a changing,
    knowledge-based economy.

    Beyond the Bilateral Relationship
    ---------------------------------

    ¶11.  (C) President Calderon highly values the unique
    U.S.-Mexico relationship and has taken steps during his
    presidency to strengthen it.  He also seeks a larger role
    internationally for his country.  Mexico is using its two
    year tenure (2008-2010) on the UN Security Council to expand
    its growing engagement in the hemisphere and on the global
    stage.  So far, Mexico's tenure has been positive.  We work
    closely and constructively with its UN team both in Mexico
    City and New York, and Calderon will be receptive to
    suggestions where the GOM can be helpful on UNSC issues.
    ¶12.  (C) Regionally, Mexico views itself as a leader, and
    Calderon has capitalized on Mexico,s large commercial and

    MEXICO 00002264  005 OF 005

    cultural footprint.  While deeply suspicious of
    leftist-populism, he has avoided the bitter feuding his
    predecessor waged with Cuba and Venezuela and sought to
    normalize relations with both.  He is deeply concerned with
    lawlessness in Central America and seeks our cooperation,
    through the Merida Initiative and other programs, to bolster
    the security and stability of his southern border neighbors.
    At the same time, he is perhaps less proactively engaged in
    the region at the moment, focusing on security and economic
    woes at home.

    ¶13. (C) Canada is becoming increasingly concerned about the
    security situation in Mexico and is actively looking for ways
    to support President Calderon's efforts to reform the police,
    corrections, and judicial sectors.  Its bilateral security
    working group focuses on increasing cooperation and
    information exchange on migration, emergency management,
    marine security, and law enforcement, which Canada has
    characterized as "practical" and "results oriented."  Canada
    also seeks to coordinate closely with us to assist the
    Calderon government on security reform.  Although Canada is
    concerned that trilateralism comes at the expense of its
    bilateral relationship with the United States, it does value
    the trilateral summit process and will seek to place greater
    focus at NALS on climate, energy and the environment.
    Mexican-Canadian relations are currently strained in the wake
    of Canada's re-imposition of visa requirements for Mexicans
    to combat what Canada perceives as abuses of its liberal
    refugee process by Mexican applicants.  Both governments have
    pledged to work through this problem, and it is unlikely to
    have a lasting impact on their overall cooperation on other
    issues.

    Visit Mexico City's Classified Web Site at
    http://www.state.sgov.gov/p/wha/mexicocity and the North American
    Partnership Blog at http://www.intelink.gov/communities/state/nap /

    FEELEY

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