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Cablegate: Argentina: Mexican President Calderon's Visit

VZCZCXYZ0005
RR RUEHWEB

DE RUEHBU #1632/01 3361845
ZNR UUUUU ZZH
R 011845Z DEC 08
FM AMEMBASSY BUENOS AIRES
TO RUEHC/SECSTATE WASHDC 2583
INFO RUCNMER/MERCOSUR COLLECTIVE
RUEHCV/AMEMBASSY CARACAS 1905
RUEHME/AMEMBASSY MEXICO 1715
RHMFIUU/HQ USSOUTHCOM MIAMI FL
RHMFIUU/DEPT OF JUSTICE WASHINGTON DC
RUEKJCS/SECDEF WASHINGTON DC
RUEATRS/DEPT OF TREASURY WASHINGTON DC
RHEFDIA/DIA WASHINGTON DC
RUCPDOC/DEPT OF COMMERCE WASHINGTON DC

UNCLAS BUENOS AIRES 001632

SENSITIVE
SIPDIS

E.O. 12958: N/A
TAGS: PREL PGOV ECON SNAR ETRD EFIN AR MX
SUBJECT: ARGENTINA: MEXICAN PRESIDENT CALDERON'S VISIT
SHARPENS FOCUS ON THE KIRCHNER ECONOMIC "MODEL"

REF: BUENOS AIRES 1571

1. (SBU) Summary: Mexican President Felipe Calderon paid a
state visit to Argentina November 23-25, renewing a
diplomatic relationship that had been relatively limited
since the 2005 Summit of the Americas at Mar de Plata,
despite growing commercial ties over that period. GOA
officials emphasized that Calderon was accompanied by over 40
high-level Mexican entrepreneurs, placing the visit squarely
in the context of Argentina's response to the global economic
crisis. The two presidents addressed a gathering of over 200
business executives on November 24. Calderon's pragmatic
call for trade, integration, and judicial security stood in
some contrast to President Fernandez de Kirchner's emphasis
on state intervention and on blaming the United States (in
all but name) for the economic pain being felt by developing
countries. Argentine Foreign Minister Taiana told the
Ambassador that the visit demonstrated that governments with
different world views can still cooperate well in concrete
areas, and the Argentine Foreign Trade Secretary said the
Mexican businessmen accompanying Calderon were eager to do
business. Argentina values its ties to Mexico, and the
attentive public reacted to the visit positively. For the
GOA, it offered an important complement to other, sometimes
challenging, hemispheric ties. Taiana has in the past
described the opening to Mexico as "strategic," economically
and politically. Coming amidst continuing Argentine
headlines about the illicit trade in ephedrine, generally for
diversion to Mexico where it is banned, the visit also
featured a bilateral agreement to increase collaboration and
consultation against the drug trade. End Summary.

Contrasting Economic Discourse
------------------------------

2. (U) Both Presidents addressed the high-level business
seminar "Argentina-Mexico Opportunities in Trade and
Investment" on November 24. Calderon's careful remarks on the
global economic crisis received a positive response. His
statement that "where the law prevails, investment can
flourish" stood in some contrast to President Fernandez de
Kirchner's (CFK) approach to economic management during
crises, which she said made clear that "the state will be the
principal actor in the coming period." Calderon also warned
that developing countries should not resort to protectionism
in the face of the crisis.

3. (U) CFK, who on November 25 announced elements of a GOA
response to the crisis (septel), argued that "our societies
cannot be allowed to suffer for the errors committed in other
latitudes." Still, she lamented that "our countries have to
pay the consequences for actions for which we were not
responsible." Calling for "revisiting the model of economic
development," which she called "strictly financial
capitalism," CFK claimed that Argentina's six-year run of
economic growth occurred because "we did the exact opposite"
of the policy prescriptions propounded by the developed
countries and the IMF.

4. (U) She proposed that Mexico and Argentina "combine
efforts, mechanisms, resources and intelligence" to mitigate
as much as possible the crisis; her additional suggestion
that the two countries combine "neurons" to find solutions
attracted at least one headline writer. South-south
technology transfer, she claimed, was inherently superior to
acquiring technology from what she called the "core
countries," which she said only transfer their technology via
a system that imposes "subordination and dependence" on
developing countries. "A unipolar system dominated by a
hegemonic power," she said, "helps no one, not even the
hegemon itself."

5. (SBU) Press reports on the visit focused on the centrality
of bilateral trade for both countries, noting that it had
risen to almost USD 2.8 billion in 2007. Mexico has also
been a major source of direct investment in Argentina.
Telmex, represented in Calderon's delegation by Carlos Slim
and in Argentina through its "Claro" brand, owns a 35% share
of the robust cellular telephone market (there is slightly
more than one cell phone per capita in the country). Also
participating, along with about 40 other Mexican executives,
was Carlos Salazar Lomelin of Coca-Cola FEMSA, the exclusive

Coca-Cola distributor in Argentina (and also President of the
Mexican-Argentine Business Committee). FM Taiana told the
Ambassador that Argentina's Foreign trade Secretary had said
the Mexican businessmen traveling with Calderon were eager to
do business. The Mexican Ambassador told the Ambassador that
the visit was "fruitful," singling out the bilateral
narcotics agreement as particularly significant. The Mexican
Political Counselor added to Poloff that a lot of follow-up
work is already being generated, especially on the commercial
front.

6. (U) Newspapers quoted sources in the GOA as emphasizing
that the economic relationship with Mexico offers a valued
counterweight to the necessarily dominant trade ties between
Argentina and Brazil. In addition to receiving significant
investment from Mexico, Argentina ran a goods trade surplus
with Mexico averaging nearly USD 450 million per year between
2002 and 2006, led by a surplus in automobiles and auto
parts. In 2007, the surplus fell to USD 97 million, and
through the first three quarters of 2008 Argentina ran a
deficit of USD 276 million. Imports from Mexico include
telephone equipment and automobiles and auto parts as well.

Bilateral Relations
-------------------

7. (U) Calderon spoke positively about the Argentine-Mexico

bilateral partnership, saying "we are unquestionably allies."
Sources indicated that the two Presidents agreed in the
their private meeting at the Casa Rosada to press for full
inclusion of Cuba within the Rio Group. Kirchner, for her
part, referred to the gratitude of the many Argentines who
received asylum in Mexico during the "dirty war" years in
Argentina. She suggested that Mexico should continue in its
special observer role in Mercosur. Foreign Minister Jorge
Taiana told the Ambassador on November 26 that the visit
demonstrated that a bilateral relationship involving two
governments with different world views could, for reasons of
national interest, work well together.

Counter-Drug Cooperation
------------------------

8. (U) With continuing government and press attention to the
trafficking of ephedrine through Argentina to Mexico,
counter-drug cooperation was a natural and potentially useful
part of the visit. Argentine Minister of Justice Anibal
Fernandez and his counterpart, Attorney General Eduardo
Medina Mora, signed a Memorandum of Cooperation which calls
for the exchange of information over four years on drug
routes, trends, trafficking networks and clandestine
production, chemical precursor trade and money laundering.
The agreement also calls for the two countries to work toward
the conclusion of a bilateral extradition treaty. Medina
said publicly that Mexican cartels were seeking to open new
routes through Argentina, an observation of interest in
Argentina given Minister Fernandez's frequent and forceful
denials that Mexican cartels are operating in the country
(reftel).

Buenos Aires Mayor and Congress
-------------------------------

9. (U) On November 25 President Calderon met with Buenos
Aires mayor Mauricio Macri, whose Greater Buenos Aires based
PRO party, noted the press, is a better ideological fit with
the Mexican PAN. Indeed, Macri joined Calderon in urging
against a protectionist response to the global economic
crisis, encouraging instead greater economic integration. In
his address to a joint session of the Argentine Congress,
Calderon emphasized the two countries' shared economic
future. He spoke in favor of increased bilateral efforts to
fight crime, narcotics trafficking, and corruption, and
emphasized his government's commitment to protecting human
rights.

An Important Return
-------------------

10. (SBU) Comment: The Calderon visit offered Argentines an
interesting contrast in styles, with CFK's more ideological
economic discourse contrasting with Calderon's more pragmatic

emphasis. Commentators noted the very different political
orientations of the two Presidents and their parties. Still,
as FM Taiana acknowledged to the Ambassador, the visit was
useful for the GOA. Since former Mexican President Vicente
Fox took umbrage at Nestor Kirchner's theatrics at the 2005
Mar de Plata Summit of the Americas, Argentine-Mexican
diplomatic relations have been frigid despite continuing
growth in private economic ties. For the GOA, stronger
diplomatic ties with Mexico offer a complement to and perhaps
even occasional counterweight to the Brazil/Mercosur and
Venezuela/Bolivarian axes. For Mexico, it appears, Argentina
is both an important access point to Mercosur and a bilateral
commercial relationship with continued potential for growth.
WAYNE

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