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Cablegate: Missouri Governor Promotes Smart Port

VZCZCXRO0711
PP RUEHCD RUEHGD RUEHHO RUEHMC RUEHNG RUEHNL RUEHRD RUEHRS RUEHTM
DE RUEHME #0804/01 0472059
ZNR UUUUU ZZH
P 162059Z FEB 07
FM AMEMBASSY MEXICO
TO RUEHC/SECSTATE WASHDC PRIORITY 5400
INFO RUEHXC/ALL US CONSULATES IN MEXICO COLLECTIVE PRIORITY
RUCPDOC/DEPT OF COMMERCE WASHDC PRIORITY
RUEAHLA/DEPT OF HOMELAND SECURITY PRIORITY

UNCLAS SECTION 01 OF 02 MEXICO 000804

SIPDIS

SIPDIS

SENSITIVE

E.O. 12958: N/A
TAGS: ECON ECIN ELTN ETRD EINV MX
SUBJECT: MISSOURI GOVERNOR PROMOTES SMART PORT


Summary
-------

1. (SBU) The Governor of Missouri visited Mexico City with a
delegation to discuss the Kansas City Smart Port, a proposed
Mexican government customs house in Kansas City. The group
met with Ambassador Garza, Embassy representatives, the
Secretary of Finance accompanied by representatives from

SIPDIS
Mexican Customs and the Tax Administration Service (SAT) the
Secretary of Transportation, and President Calderon. The

SIPDIS
Governor also participated in a signing ceremony between
Kansas City Southern de Mexico and the State of Michoacan.
While Mexican officials were clear that the Smart Port
project is stalled, and are making demands that include a
similar facility in Mexico, the delegation remained
optimistic. Post anticipates that Smart Port supporters will
seek to follow-up with Washington.

Kansas City Smart Port
----------------------

2. (SBU) Kansas City Smartport is a non-profit coalition of
shippers, exporters, and warehouse operators promoting Kansas
City as an "inland Port" for multimodal shipping, drawing on
the city's extensive railroad, highway, air and river line
infrastructure. Backers of the initiative have lobbied the
USG and GoM to station U.S. Customs and Border Patrol (CBP)
and Mexican Custom officials at the Smartport in Kansas City
to perform expedited "pre-clearance" customs processing.
This would allow goods to be shipped directly from Kansas
City to the Mexican port of Lazaro Cardenas for international
export, while also allowing goods arriving in Lazaro Cardenas
to be forwarded to Kansas City for customs clearances,
without stopping at the border.

Missouri Governor Visits on News of Delay
-----------------------------------------

3. (SBU) On February 11-13, Governor Matt Blunt of Missouri
visited Mexico City in response to information that the
project was not moving ahead. The Smart Port Coalition had
been informed by CBP in Washington that CBP was not
interested in posting inspectors at the Smart Port, and that
the Mexican government had not submitted a request to the
Department of State to negotiate the diplomatic status of any
Mexican inspectors working there. The Governor's visit was
an attempt to continue pushing the project forward with the
new Mexican administration.

4. (SBU) The Governor also used the visit to support Kansas
City Southern de Mexico and to promote Missouri-Mexican
trade. He was the honorary witness during a agreement
signing ceremony between Kansas City Southern de Mexico and
the State of Michoacan. The agreement was for an 80 million
USD inter-model terminal at the port of Lazaro Cardenas. At
the signing ceremony, Kansas City Southern de Mexico
announced additional investments of 300 million USD.

5. (SBU) Accompanying the Governor was his chief of staff, Ed
Martin; the Director of the Missouri Department of Economic
Development, Greg Steinhoff; Jr.; President of Kansas City
Smart Port, Chris Gutierrez; the Chairman of Kansas City
Smart Port's Board of Directors, John Wagner; Kansas City
Smart Port Board Members, Ken Hoffman and Al Figuly; and CB
Richard Ellis Senior Associate for Industrial Services, Brian
Staton. Also attending meetings were Jose Zozaya Delano,
President of Kansas City Southern de Mexico and David Eaton,
Vice President for Corporate Affairs, Kansas City Southern de
Mexico.

CBP: Thanks but no Thanks
-------------------------

6. (SBU) During Embassy briefings, representatives from CBP
reiterated that the agency would not participate directly in
the Kansas City Smart Port project. They further indicated
that CBP does not have the resources and manpower to station
inspectors in Kansas City for pre-clearance. They informed
the group that the next step would be to ask the Mexican
Government to submit a written proposal outlining its
interest in moving forward with the project. (Note: The same
information was previously provided by CBP Headquarters in
Washington to U.S. Sen. Kit Bond who had inquired into the
project delay. End Note)

Tellez and Calderon Provide Generic Support
-------------------------------------------

7. (SBU) During the 15 minute meeting with Secretary of

MEXICO 00000804 002 OF 002


Communications and Transportation Luis Tellez, Tellez
discussed his support for Kansas City Southern de Mexico and
the continuing strong relations between Mexico and Missouri.
During the 20 minute meeting with Calderon, who was
accompanied by Secretary of Foreign Relations Patricia
Espinosa and Under Secretary for North American Affairs
Carlos Rico, Calderon did not directly express his backing of
the program, but said he supports facilitating cross border
trade and thereby increasing Mexico's global competitiveness.


Ministry of Finance Team Wants More than Smart Port
--------------------------------------------- ------

8. (SBU) The most extensive meeting was with Secretary of
Finance Agustin Carstens who was accompanied by the Director
General of SAT Jose Maria Zubiria and Mexican Customs
Director Juan Jose Bravo. Carstens said that the Mexican
government is looking forward to economic integration and an
increase in trade, but deffered to his two directors for
specific details. Zubiria said he was aware that the project
request has been going on for several years. He said that in
order for the Mexican government to move forward and decide
how much money would be needed to fund such a project, they
require a comprehensive business plan that would show the
anticipated traffic of the facility. Bravo commented that,
so far, Mexican Customs has not seen the volume necessary to
sustain the Smart Port and that without information on the
expected client base it would be difficult for the Mexican
government to support the project.

9. (SBU) Zubiria then said that the Mexican government is
following developments at CBP, and is looking for ways to
deal with problems at the border and transportation. He noted
that the Mexican government views problems for trains
crossing the border and trucks crossing the border as parts
of the same problem, and that this problem needs to be
solved. He made a direct reference to the inability of
Mexican trucks to take their loads into the U.S. He also
requested the support of the delegation in "promoting a
similar facility in Mexican so that we (GoM and Smart Port)
can move on a mutual agreement". Carstens supported this
position saying that, the project supporters "need to find a
way to incorporate it with our (GoM) workings with U.S.
Customs and find a way for the idea to be applied in Mexico".


Comment
-------

10. (SBU) Mexican officials were very cordial, although their
message was that the Smart Port project is not making
progress. The Finance Ministry seems to have tied the
support of Smart Port to broader cross border transportation
issues and getting a reciprocal agreement. At a minimum, the
Finance Ministry may be seeking to use the Smart Port project
as leverage to get a pre-clearance facility in Mexico.
Despite the daunting gauntlet thrown by the Mexican
government, the Smart Port delegation remained optimistic.
They talked of gaining more congressional backing and
investing more money to move the project forward. We expect
Smart Port supporters to raise these issues in Washington.


Visit Mexico City's Classified Web Site at
http://www.state.sgov.gov/p/wha/mexicocity
GARZA

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