Cablegate: Scenesetter for the Visit of Codel Reid to Mexico,

VZCZCXRO1564
PP RUEHCD RUEHGD RUEHHO RUEHMC RUEHNG RUEHNL RUEHRD RUEHRS RUEHTM
DE RUEHME #5880/01 3242003
ZNR UUUUU ZZH
P 202003Z NOV 07
FM AMEMBASSY MEXICO
TO RUEHC/SECSTATE WASHDC PRIORITY 9605
INFO RUEHXC/ALL US CONSULATES IN MEXICO COLLECTIVE
RUEHAC/AMEMBASSY ASUNCION 0118
RUEHBO/AMEMBASSY BOGOTA 3911
RUEHBR/AMEMBASSY BRASILIA 1458
RUEHGT/AMEMBASSY GUATEMALA 3568

UNCLAS SECTION 01 OF 02 MEXICO 005880

SIPDIS

SIPDIS

FOR CODEL REID FROM AMBASSADOR GARZA

E.O. 12958: N/A
TAGS: ECON MX PGOV PREL OVIP REID HARRY
SUBJECT: SCENESETTER FOR THE VISIT OF CODEL REID TO MEXICO,
NOVEMBER 28-30, 2007

1. Welcome to Mexico City. Mexico is key to USG success in
combating the trafficking of drugs, persons, arms and
precursors, terrorism, and other transnational threats.
Since entering office last December, Felipe Calderon's
government has moved with unprecedented speed to improve
public security.

Strengthening Law Enforcement
-----------------------------

2, Specific measure include: launching aggressive anti-drug
operations in ten states; raising pay for the military;
replacing numerous high-ranking federal police officers in an
anti-corruption campaign; launching a billion dollar project
to create real-time interconnectivity between all police and
prosecutors, as well as a unified national crime database;
and, proposing congressional bills to unify federal police
forces and reform the judicial system.

3. The GOM has greatly strengthened law enforcement
cooperation with the USG, while a more flexible attitude by
the courts has allowed for the extradition of a record 72
criminals to the U.S. this year, already exceeding 2006's
record level. The GOM is now extraditing cartel kingpins of
significance and has seized record hauls of cocaine,
methamphetamine precursors, and bulk cash and other assets.

4. The ongoing security campaign has reduced the broad
geographic range and legal impunity that the cartels have
traditionally enjoyed in Mexico, although progress is tenuous
and uneven. Addressing personal security challenges ranks
regularly as the number one priority in public opinion polls.
Calderon has accomplished more in his first year than almost
any other recent Mexican president in countering unlawfulness
and murder.

Stakes Rising for Security Officials
------------------------------------

5. The human price Mexico has paid has been high: in the
past 10 months, almost 250 police and military officials have
been killed. Mexican political leaders are not shy about
reminding us that U.S. demand for drugs, money laundering,
and illegal arms flows from our side of the border help fuel
Mexico's drug war.

Human Rights Issues
-------------------

6. Members of the political opposition and human rights
groups have expressed concern about the continued use of the
military for internal security and the potentially corrupting
influence this fight poses to the institution. The National
Human Rights Commission (CNDH) has investigated and reported
on several incidents.

7. To date, the Secretariat of Defense has shown a
willingness to deal with abuses committed by soldiers,
including investigating individuals accused of violations in
the state of Michoacan and prosecuting soldiers who killed a
family at a roadblock in the state of Sinaloa. Outstanding
allegations against members of a variety of federal, state
and local security elements remain unresolved.

Other Security Challenges
-------------------------

8. EPR attacks on Pemex pipelines in July and early
September have added another dimension to Mexico's security
concerns, raising the specter of home-grown terrorism.
Calderon also recognizes that Mexico's own southern border
remains extremely vulnerable to immigration, trafficking in
persons, and the smuggling of contraband, and that securing
this border is of vital importance to U.S. security. Mexico
faces a variety of security challenges -- both mature and
incipient.

Economy
-------

9. The Calderon administration has registered some
impressive economic accomplishments during its first year --
maintaining macroeconomic stability, keeping inflation at a
reasonable 4%, and lowering barriers to trade. The president
secured quick congressional approval of the 2007 and 2008
budgets, and won passage of an unpopular but necessary

MEXICO 00005880 002 OF 002

government workers' social security reform. His effort to
reform Mexico's tax system paid off on September 14 when
Congress approved a tax reform that will boost government
revenues by 2.1% of GDP by 2012. Much remains to be done,
however, to arrest Mexico's slipping global competitiveness.
The GOM's challenge is to implement structural reforms
required for growth sufficient to raise 40% of Mexicans out
of poverty.

President Facing Difficult Political Environment
--------------------------------------------- ---

10. Having completed nearly one year in office, Felipe
Calderon has crafted an image as an activist president,
consolidating his own political position and the power of the
Mexican state -- no small feat given tensions surrounding the
2006 elections and the law enforcement challenges the country
faces. The president faces a difficult political environment
here, with an active and vocal opposition challenging him
regularly.

11. Prosperity ranks with security as the key priority in
the minds of most Mexicans. If his programs and policies
prove unsuccessful in generating the kind of growth necessary
to create sufficient jobs and reduce poverty, Calderon could
quickly find himself vulnerable to a reinvigorated political
opposition. All three of the main political parties have
their eyes on bellwether 2009 congressional elections.

U.S.- Mexico Relations
----------------------

12. The Calderon government has demonstrated pragmatism in
its posture toward the United States and bilateral
cooperation, particularly in law enforcement, has never been
stronger. However, the failure of immigration reform in the
United States was a political setback for the president. The
result is that he enjoys less political space in which to
openly cooperate with the U.S. on issues of mutual bilateral
importance.

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 /
GARZA

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