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Cablegate: Getting to Know You: Mexican President Fox Visits

This record is a partial extract of the original cable. The full text of the original cable is not available.

UNCLAS SECTION 01 OF 03 OTTAWA 002989

SIPDIS

SENSITIVE

E.O. 12958: N/A
TAGS: ETRD PREL ECON EINV CA MX
SUBJECT: GETTING TO KNOW YOU: MEXICAN PRESIDENT FOX VISITS
CANADA

REF: OTTAWA 1687

1. (U) Introduction and Summary: Mexican President Vincente
Fox marked the 60th anniversary of diplomatic relations and
the 10th anniversary of NAFTA with a working visit to Canada
October 24-26. Accompanied by eight cabinet-level officials,
three senators, and about 40 business leaders, the
President's schedule ranged from addressing a joint session
of Parliament to hosting a ballet gala and speaking to
university students. The most significant deliverable was
agreement on a Canada-Mexico Partnership, explicitly modeled
on the U.S.-Mexico Partnership for Prosperity. Both Mexican
and Canadian officials confirm that discussions focussed on
the bilateral relationship, with NAFTA issues to be raised in
the upcoming NAFTA deputy's meeting. Canada still has not
adopted Mexico's vision of a "strategic alliance" and active
engagement in NAFTA plus, but the visit does mark
re-invigoration of a neglected bilateral relationship. End
introduction and summary.

A complete success
------------------

2. (SBU) Officials at Foreign Affairs Canada report that
this was the most complex working visit they have ever hosted
(due to the size and diversity of the delegation and the
variety of events) and that "it couldn't have gone better."
The Prime Minister's personal commitment made possible
signing of the Partnership agreement and facilitated the
unusually broad involvement by cabinet members. PM Martin's
focus on the visit is especially noteworthy as the Provincial
Premiers were in Ottawa at the same time for negotiations on
federal-provincial finances. The PM went so far as to summon
the Director of the Mexico desk to add some Spanish to his
toast for the official dinner, so as not to be outdone by
Parliamentary leaders who had addressed President Fox in
Spanish during his visit to the Hill.

3. (SBU) The Mexican embassy characterized the visit,
positioned as an opportunity for political dialogue,
promoting business, and liaising with the (approximately
36,000 members of) the Mexican community in Canada, as a
complete success. Official functions included the Martin-Fox
bilateral followed by an expanded meeting with cabinet
ministers, a warmly-welcomed address to Parliament and
ministerial bilaterals. But the official side was leavened
with glamor and outreach. The Foxes started the visit Sunday
night by hosting the Prime Minister and his wife, as well as
other officials, at a glittering gala around the performance
of the Ballet Folklorico de Mexico. The Prime Minister
reciprocated the following night with a dinner for 900
guests. The visit also included outreach to the Mexican
Community (in which a surprising 500 members of Ottawa's
limited Mexican population participated), a speech at
Carleton University and a solid schedule for the business
community. A private sector retreat in Montreal for business
leaders on both sides was capped Monday with a lunch with
President Fox in Ottawa hosted by the Mexcian Ambassador.

4. (U) Fox also met with Opposition leaders of Parliament
and with Quebec Premier Jean Charest, who will shortly be
accompanying the French President to Mexico. This is Fox's
third visit to Canada, and had been postponed from July due
to the difficulty in scheduling so soon after the election.
Although the July visit would have included stops in several
cities (but not Ottawa), this visit covered the national
capital area only.

Canada-Mexico Partnership leads a long list of little
deliverables
--------------------------------------

5. (SBU) The headline deliverable was agreement on a
Canada-Mexico Partnership modeled on the US-Mexico
Partnership for Progress. A working group is being
established to identify areas for further cooperation through
a private-public partnership. Although the agreement does
not include specific commitments, we are told that the PM
does not sign such bilateral agreements lightly and this
signifies a renewed commitment to the neglected bilateral
relationship. Canadian business groups strongly supported the
intiative. GoC and business sources commented to us,
however, that Canada will resist duplicating the high-profile
(and expensive) P4P format favored by the Mexican side and
hopes to develop a format, e.g. with working groups, that
will provide some continuity and produce pragmatic results.
One contact commented that the Canadian side had also pushed
for a broadly economic theme but that the Mexicans had
insisted on an emphasis on development.

6. (U) In addition to this headline agreement, the visit
resulted in new money from Export Development Canada and
signature of letters of intent on climate change initiatives
and renewal of an LOU on health sector collaboration. There
were deliverables in 13 other areas, including medical
research, housing and sustainable cities, migration,
professional and academic exchanges, and tourism promotion.

Open Exchange With University Students
--------------------------------------
7. (U) President Fox addressed university students on
"Mexico's Vision of North America: Working Together for a
Common Future" but spoke instead on democracy and good
governance in Mexico. The speech drew a strong press
contingent, as well as representatives from the diplomatic
and academic community. Canadian and Mexican contacts were
impressed by the warmth of the President's connection with
the Mexican community, including the students. (Organizers
anticipated that if there were demonstrations or problems
they would occur at the university.) The Mexican students
clearly appreciated his responses to their pointed but
on-topic questions. The speech (given in English) did not
break new ground, but in response to questions President Fox
noted that:

--The GOM is working to provide health coverage for those
outside the formal economy. They are starting with the
poorest and hope to have 7 million people covered by the end
of this year, and about 25 million covered within three
years. That will require expanding medical infrastructure.

-- In response to a question on NAFTA institutions, such as
a North American court of justice, he said the three
governments are discussing the new vision for NAFTA. A court
is not yet on the radar, but things will move in that
direction.

-- On whether NAFTA is heading towards an EU-type
arrangement or something more laissez-faire, he said "Europe
is not yet the trilateral inspiration." Perhaps that will be
the case in 40-50 years, but for now we are working on
NAFTA-plus. All three NAFTA economies are losing jobs to
China, and need to react by increasing competitiveness and
productivity by uniting their resources.

-- Given US domination and the fact that there are, in fact,
two bilateral relationships, what are the realistic
possibilities for a North American Union? Fox responded that
often the most powerful have the biggest weaknesses and
painted an extremely gloomy picture of the fate of aging
populations in the US and Canada that will need to rely on
Mexico's abundant, talented, hardworking human resources.

-- Asked about what his government will do to halt
brain-drain, he admitted that right now Mexico has a
population boom and there is a lack of space: inadequate
educational opportunities, jobs or housing.

Trade Minister's Bilaterals: Introductory Calls, Not NAFTA
----------------------------------------

8. (SBU) Trade contacts on both the Mexican and Canadian
sides said the 45-minute bilateral between the two trade
ministers on Monday morning would include discussion of
ongoing NAFTA work-in-progress, such as rules of origin on
textiles, and a review of progress thus far. Canada's trade
minister Peterson was not briefed to raise "beyond NAFTA"
issues, and both sides noted that such discussions would be
inappropriate in the bilateral context, but would be
discussed at the upcoming NAFTA deputies meeting. Secretary
of Economy Canales' bilateral with Industry Minister Emerson
on Tuesday was even briefer, scheduled as a 30-minute
introductory call.

A "Strategic Alliance"? But without a Strategy
----------------------------------------

9. At a pre-visit conference on "Mexico & Canada at the turn
of the 21st Century: Sixty Years of Diplomatic Relations,"
Mexico's Ambassador to Canada opened the discussion with
remarks stressing the desire of both "strategic allies" for
deeper cooperation. She noted that since the early 1990s,
both Canada and Mexico have been seeking to diversify their
foreign relations and gain greater autonomy from the U.S.
She claimed that the greatest benefit in sharing such a long
border with the U.S. is the fact that it facilitates
rapprochement with Canada. There is, she said, a perception
that the US designs policy for itself, but world events have
reinforced the Mexico-Canada strategic alliance. The two
countries are looking for ways to reduce or eliminate the
power asymmetry, so should coordinate priorities, not just
react to policies imposed by the U.S.

10. (U) During the subsequent panel discussion, which the
Mexican Ambassador was not able to attend, academic panalists
characterized the bilateral relationship as "evolving but
embryonic," providing statistics to demonstrate the room for
growth. (Canada has 4% of the total stock of FDI in Mexico,
but that is 40 times more than all Mexican FDI in Canada.
Mexican FDI in Canada accounts for 0.8% of the total stock.)
The final panelist of the morning quipped that while Canada
and Mexico may have a "strategic alliance," it lacks a
strategy. He characterized the situation as two North
Americas, rather than one integrated market. He called for
strengthening relations at the elite level (which this visit
will do) and noted that while "managing the US is no cup of
tea," the two countries have much to celebrate as
demonstrated by the higher density of bilateral linkages over
the years.

11. (U) Canada's Assistant Deputy Minister of Foreign
Affairs Marc Lortie summed up the conference with a realistic
but hopeful assessment of Canada-Mexico relations. He said
that during the upcoming visit the two countries would launch
a new mechanism to deepen economic relations. He used the
term "strategic partnership", with the two countries trying
to establish strong links on trade, border issues, and
security. Lortie said it is still an open question how much
of this strategic partnership can be put in an institutional
framework and how much will continue to be carried out on an
ad hoc basis. Is there a place for EU style engagement, for
example? (He asked a number of open questions during his
remarks).

12. (U) Lortie said that after three years of trying to
manage the Americas, Fox realizes that he must be more
pragmatic and more precise. He now knows the limits of
trilateral mechanisms. Lortie said that Canada and Mexico
have each been overwhelmed since 9/11 in managing the
"relationship of all relationships," and have not dedicated
time in a strategic sense to their bilateral relations. They
both know that the economy will take a backseat to security.
On September 20th, 2001 FM Castaneda suggested to then-deputy
Prime Minister John Manley that they focus on trilateral
cooperation on the border, but Canada was also cool to the
idea of forming a strategic partnership with Mexico to
"manage" the United States.


List of (most) Mexican Ministerial Participants
--------------------------------------------- --
Economy Fernando Canales
Energy Fernando Elizondo
Environment and Natual Resources Alberto Cardena
Finance and Public Credit Francisco Gil
Health Julio Frenk
Labor and Social Welfare Carlos Abascal
Public Service Eduardo Romero

Visit Canada's Classified Web Site at
http://www.state.sgov.gov/p/wha/ottawa

CELLUCCI

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