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Cablegate: Calderon Plays to Domestic Audiences in South

VZCZCXRO8517
RR RUEHCD RUEHGD RUEHHO RUEHMC RUEHNG RUEHNL RUEHRD RUEHRS RUEHTM
DE RUEHME #2483/01 2331806
ZNY CCCCC ZZH
R 211806Z AUG 09
FM AMEMBASSY MEXICO
TO RUEHC/SECSTATE WASHDC 7994
INFO RUEHXC/ALL US CONSULATES IN MEXICO COLLECTIVE
RUEHWH/WESTERN HEMISPHERIC AFFAIRS DIPL POSTS
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 03 MEXICO 002483

SENSITIVE
SIPDIS

E.O. 12958: DECL: 08/17/2019
TAGS: BR CO ECIN ECON EINT EPET MX PGOV PINR PREL
UY, VE
SUBJECT: CALDERON PLAYS TO DOMESTIC AUDIENCES IN SOUTH
AMERICA

MEXICO 00002483 001.2 OF 003


Classified By: Confidential by Deputy Political Counselor James Merz
Reason: 1.4 (b),(d).

Message Text:
1. (C) Summary: President Calderon visited Colombia,
Uruguay, and Brazil August 12-August 17 to advance economic
and political interests. The Mexican press published flashy
headlines from Calderon's stops in Colombia and Brazil -- one
speaking to an ongoing bilateral program on security and
another to a prospective public-private oil investment
partnership suggested by Calderon. Focusing on the economy,
Calderon and his Colombian counterpart agreed on adjustments
to the two countries' 1994 free trade accord. They also
signed memoranda eliminating double taxation in Uruguay and
Colombia. Notwithstanding a degree of traditional Mexican
competition with Brazil for economic and political space in
Latin America, Calderon signaled interest in pursuing a Free
Trade Agreement (FTA) with Brazil. Throughout the trip,
Calderon discussed Mexico's expanding role in the
multilateral sphere. Though this was an external visit, the
messaging played to domestic audiences. End Summary

---------
Headlines
---------

2. (C) Two major headlines came out of this trip: 1)
Colombian President Uribe announced that Colombia will send
enough police to train 10,00 Mexican federal police and 2)
Calderon announced that the Government of Mexico (GOM) seeks
an alliance between the two state-controlled oil giants,
Mexico's PEMEX and Brazil's Petrobas. The Mexican press
picked up part of Uribe's police announcement, but did not
report Uribe's key point: that the Colombian Government
already provides this critical training on an ongoing basis.
The announcement signified only an incremental increase in
the existing partnership. U.S. Embassy Mexico City NAS
verified that 24 Colombian investigators already instruct
1,500 SSP police as part of the USG training effort in San
Luis Potosi. (Note: It is not clear whether the
announcement refers to something new or is a reference to the
existing program. Colombian advisors are also involved in
independent programs in Ciudad Juarez and elsewhere. End
Note.)

3. (C) The second major headline from Calderon's South
American tour was the announcement that Mexico made progress
on an agreement between Petrobas and PEMEX. No definite
plans came out of the meetings, though Calderon may press GOM
ministries to follow-up quickly in response to falling oil
production. Calderon expressed interest in technology
exchange with Petrobas, a world leader on deep-sea drilling.
(Note: Given Mexico,s constitutional prohibition on private
investment in the oil sector and Petrobras, preoccupation
with deepwater drilling off the coast of Brazil, potential
areas for collaboration will be limited in scope and will not
include risk content. End Note) Calderon highlighted
GOM-GOB cooperation on a Working Plan on Fuel, under a joint
MOU signed in 2007. The two governments also established a
joint Brazilian-Mexican Business Forum, with the objective of
increasing bilateral commerce.

---------------------
Free Trade Agreements
---------------------

4. (C) Uribe announced to the Colombian press that Calderon
primarily came to Bogota to sign the "G-2 Free Trade
Agreement." The Group of Three, or "G-3" FTA was signed in
1994 between Mexico, Colombia, and Venezuela, but Venezuela
unilaterally pulled out of the agreement in November 2006.
The two presidents hailed the successful conclusion of
negotiations to modify the existing FTA. The modifications
included incorporating of new rules of origin, increasing the
powers of the Agreement's Administrative Commission, and
changing the name of the Agreement to reflect the departure
of the third party. Both the Mexican and Colombian
legislatures have to ratify these modifications.


MEXICO 00002483 002.2 OF 003


5. (C) In Brasilia, Calderon also talked publicly of his
blue-sky plans for a Mexican-Brazilian free trade plan.
However, Cuevas told PolOff no defined plans exist to move
forward with such a treaty. ProMexico (an agency focused on
attracting foreign investment and promoting Mexican exports)
and the Brazilian Agency of Imports and Foreign Investment
(APEX) signed an MOU to demonstrate their willingness to
promote bilateral trade.

---------------------------
Eliminating Double Taxation
---------------------------

6. (SBU) During his joint speech with Calderon, Uruguayan
President Vazquez stressed that bilateral trade had grown
240% since Uruguay and Mexico signed an FTA in 2004.
However, during Calderon's visit, the two countries
eliminated further barriers to investment: double taxation
and international tax evasion. Legislators will not have to
ratify this agreement into law. Calderon and Uribe signed a
similar memorandum, but Mexico does not appear ready to break
down such barriers with Brazil.

---------------
Multilateralism
---------------

7. (SBU) Calderon also demonstrated his desire for Mexico
to assume a more prominent profile in the multilateral arena.
In all three countries he visited, Calderon and/or each of
his counterparts stressed support for Honduras and the
importance of Zelaya's return. Uribe, Vezquez, and Lula
affirmed they would support Mexico's candidate for a vacancy
on the Inter-American Commission of Human Rights in
2010-2013. Publicly, Mexico announced its commitment to host
the following meetings in 2009-2010: the next Latin American
Pacific Arc (ARC) Summit (November 23-24); the Summit of
Latin America and the Caribbean on Integration and
Development; and the Summit of the Rio Group, which Mexico
chairs. Calderon pledged to work with Brazil on assistance
to Haiti. In Brazil, Calderon also stressed Mexico's
commitment to working closely with other developing countries
at the upcoming meetings of the G-5 and G-20.

------------------------------
Comment: Sending Messages Home
------------------------------

8. (C) President Calderon used this trip to send two signals
to domestic Mexican audiences: one political and one
economic. By quickly launching this trip to South America
after his Guadalajara meeting with POTUS and Canadian Prime
Minister Harper, Calderon clearly wanted to draw attention to
Mexico's leadership in Latin America. Calderon even proposed
a trade affiliation with Mexico's traditional rival, Brazil.
He thereby reinforced Mexico's partnership with other Latin
nations and de-emphasized Mexico's economic and political
reliance on the U.S., a message that plays well domestically.

9. (C) Mexico,s heavy dependence on the U.S. market has
played a significant part in Mexico's economic problems.
Polls show that while security remains a high priority for
the Mexican public, the economic downturn was the driving
issue behind the victory scored by the opposition PRI in last
month,s mid-term elections. After his meeting with Lula,
Calderon emphasized that "depending economically on only one
region is inadequate for any country" and "such dependency
explains why Mexico was so affected in this economic crisis."
By removing barriers to investment and establishing closer
ties between business communities, Calderon seeks to
diversify Mexico's economy, improve prospects for new markets
in Brazil and other Latin economies, and foster increased
investment from the region. As the PRI has significant
influence over the federal budget, looking for informal
economic agreements or those without difficult federal
ratification processes is one way in which Calderon can
demonstrate to the Mexican public that PAN is taking steps to
allay the pinch on their wallets.
Visit Mexico City's Classified Web Site at

MEXICO 00002483 003.2 OF 003


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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