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Cablegate: U.S.-Mexico Relations: Progress in 2009, Challenges in 2010

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FM AMEMBASSY MEXICO
TO RUEHC/SECSTATE WASHDC IMMEDIATE 0131
INFO ALL US CONSULATES IN MEXICO COLLECTIVE
WHA CENTRAL AMERICAN COLLECTIVE
RHEHAAA/NATIONAL SECURITY COUNCIL WASHINGTON DC
RHMFIUU/CDR USNORTHCOM PETERSON AFB CO
RHMFIUU/CDR USSOUTHCOM MIAMI FL
RHMFIUU/DEPT OF HOMELAND SECURITY WASHINGTON DC
RHMFIUU/DEPT OF JUSTICE WASHINGTON DC
RUCPDOC/DEPT OF COMMERCE WASHINGTON DC
RUEABND/DEA HQS WASHINGTON DC
RUEKJCS/SECDEF WASHINGTON DC

244771
2010-01-21 21:42:00
10MEXICO202
Embassy Mexico
UNCLASSIFIED//FOR OFFICIAL USE ONLY

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OO RUEHCD RUEHHO RUEHMC RUEHNG RUEHNL RUEHRD RUEHRS RUEHTM
DE RUEHME #0202/01 0212143
ZNR UUUUU ZZH
O R 212142Z JAN 10
FM AMEMBASSY MEXICO
TO RUEHC/SECSTATE WASHDC IMMEDIATE 0131
INFO ALL US CONSULATES IN MEXICO COLLECTIVE
WHA CENTRAL AMERICAN COLLECTIVE
RHEHAAA/NATIONAL SECURITY COUNCIL WASHINGTON DC
RHMFIUU/CDR USNORTHCOM PETERSON AFB CO
RHMFIUU/CDR USSOUTHCOM MIAMI FL
RHMFIUU/DEPT OF HOMELAND SECURITY WASHINGTON DC
RHMFIUU/DEPT OF JUSTICE WASHINGTON DC
RUCPDOC/DEPT OF COMMERCE WASHINGTON DC
RUEABND/DEA HQS WASHINGTON DC
RUEKJCS/SECDEF WASHINGTON DC

UNCLAS SECTION 01 OF 05 MEXICO 000202

SENSITIVE
SIPDIS
AMBASSADOR FOR THE SECRETARY
SENIOR ADVISOR ALEC ROSS
WHA A/S VALENZUELA AND DAS JACOBSON
AID ADMINISTRATOR SHAH
NSC RESTREPO AND BRENNAN
DOD/OSD STOCKTON
NORTHCOM CDR GENERAL RENUART
DHS ICE ASST SEC MORTON AND ASST SEC BERSIN
DEA A/ADMINISTRATOR LEONHART
DOJ ASSISTANT ATTY GEN BREUER
COMMERCE ITA U/S SANCHEZ

E.O. 12958: N/A
TAGS: PGOV PREL MASS ECON SNAR PHUM MX
SUBJECT: U.S.-Mexico Relations: Progress in 2009, Challenges in 2010

1. (SBU) Summary: The U.S.-Mexican bilateral relationship has
never been stronger. We ended 2009 with an unprecedented
commitment from the Mexican government to work closely with us on
an ambitious effort to move beyond a singular focus on high value
targets and address some of the institutional and socio-economic
constraints that threaten to undermine our efforts to combat the
cartels. A truly joint effort to implement a new U.S.-Mexico
strategy is yielding stronger organizational structures on both
sides and a deeper understanding of the threat posed by the drug
trafficking organizations. In the coming year, we will help Mexico
institutionalize civilian law enforcement capabilities and phase
down the military from street patrols, for which it has neither
legal authority nor training. A new dialogue on human rights with
the Mexican government and a defense bilateral working group will
reinforce that effort and help modernize the military.

2. (SBU) As we institutionalize the security agenda we will also
need to give more attention to the economic and social agendas.
Efforts to strengthen mutually beneficial competitiveness in 2010
will focus on identifying new cross border production
opportunities, spurring innovation, building a modern 21st century
border, and supporting an energy and environment agenda that is a
top priority for the Calderon administration and offers huge
potential for future investment and economic development. Our
economic recovery and Mexico's go hand in hand, and U.S. export-led
successes are depending increasingly on partnering with Mexico's
manufacturing capability. At the same time, we will have to
resolve the lingering trucking dispute and other trade irritants
while using carefully targeted and limited assistance to spur
additional spending on poverty alleviation by the Mexican
government, the IDB and the World Bank. End Summary

Some Operational Success

3. (SBU) Several successful operations by the Mexican government
against well known drug lords over the last month reflect both the
progress we are making in strengthening our bilateral relationship
and the challenges we face to expand those gains in 2010. The
Merida assistance money is flowing despite misleading public
reports -- 700 million in equipment and technology will be
delivered under Merida through 2010 plus more in technical
assistance and training -- and it is helping to deepen law
enforcement capabilities and translate critical intelligence into
more effective operations. The challenge is to use effectively the
capabilities we are creating.

4. (SBU) The integration of intelligence and operations is
improving. A failed operation in mid-December to capture Beltran
Leyva led to a brutally honest exchange with the Mexican
authorities. The following week Mexican Special Forces conducted a
well executed operation to track down Beltran Leyva. The week
before the Federal Police ran another operation launched from
Brownsville, Texas into Matamoros. Still, the drug traffickers are
not resting, as demonstrated by the tragic killing of the family of
a Mexican marine who participated in the raid on Beltran Leyva.
Senior Mexican officials, including President Calderon, have told
the Ambassador personally that they are not backing off, and if
anything Mexican resolve is stronger.

Political Context

5. (SBU) That resolve has to be seen in the context of Calderon's
political challenge. His numbers have dropped over the last year
but remain above fifty percent, in keeping with a Mexican tradition
of strong popular support for the President. He scores well for
his toughness and determination but economic worries still dominate
the electorate and on these issues he scores somewhat lower. This

MEXICO 00000202 002 OF 005


explains a new ordering in his public statements that is putting
jobs and recovery slightly ahead of the fight against DTO's. That
will actually support our efforts to broaden our approach and help
address some of the socioeconomic issues that are feeding into the
organized crime problem. Some of the other areas that we will be
working on - legal reform and our zero tolerance for violence with
citizen groups - will offer some inroads for delicate discussions
with the government on messaging, which at times forgoes themes of
modernization and rule of law for more sensational images which
confuse the public.

Expanded Vision

6. (SBU) The vision guiding our work is stronger, reinforced by the
President's trip to Guadalajara in August, the Secretary's meeting
with the Foreign Secretary Espinoza in September and nourished by
the many high level visitors - NSC Director John Brennan, Deputy
Secretary Lew, Undersecretary Otero, Assistant Secretary
Valenzuela, DNI Blair, Assistant Secretary of Defense Stockton,
Generals Renuart and Stutzreim and others - who visited Mexico in
the last quarter of 2009. We are no longer fixated on capturing
high-value targets, even though that remains necessary. Now we are
moving to assess and penetrate the drug trafficking organizations
(DTOs) as corporations, and to build the civilian institutions to
enforce the rule of law. This will require additional intelligence
capacity, especially on tracking money flows. We have an excellent
cadre of interagency experts at post and DNI and the interagency
are both engaged at senior levels. We need to develop a
comprehensive strategy to get at the DTO's money and not be driven
by uncoordinated individual cases.

Lowering Military Profile

7. (SBU) As a result of our expanded discussion, the GOM is looking
for ways to lower the profile of the military in the cities along
the border. Our joint bilateral assessment missions to Tijuana,
San Diego, Ciudad Juarez and El Paso, have helped with this and
generated a new willingness to look at ways to strengthen the role
of the police and local civilian authorities that will help
reinforce the weak connection between the military's efforts in the
cities and legal prosecutions. In Ciudad Juarez, the military
transferred its local command in the early part of 2010 to the
federal police. Already 1,600 federal police have deployed. We
are engaged with the Mexican authorities on new command and control
arrangements. The first stages will be messy, but this is a
massive step forward, influenced by our attention to performance
and human rights. The goal is to develop civilian enforcement
models that could help get the military into support functions.

Looking at Socioeconomic Factors

8. (SBU) The new strategy is also encouraging the Mexicans to look
at the poverty and marginalization of communities exploited by the
drug trafficking organizations (DTOs). For the first time, the GOM
agreed to engage on a socioeconomic agenda targeted at communities
to stop the flow of recruits to the DTOs. Pilot projects in Ciudad
Juarez and Tijuana could pave the way for other cities. USAID has
already had success with models to issue state and municipal bonds
to support job creation and infrastructure. But there is no means
to align federal, state and municipal programs, budgets and
policies into coherent community programs - a classic urban
planning conundrum. We are working out options to integrate urban
planners, and perhaps to leverage funds from the DoD
Counter-Narcotics budget.

Human Rights and Community Engagement

MEXICO 00000202 003 OF 005


9. (SBU) We have not neglected legitimate concerns in Congress and
the NGO community about missteps in the area of human rights.
Recent decisions at the Inter American court and the appointment of
new leadership at the Mexican National Commission on Human Rights
have opened up new space for discussion and programmatic efforts
that can help build transparency and reinforce legal protections.
We have worked out the details of a new bilateral dialogue on human
rights that will include the military, police and legal authorities
that will be launched in early February. We are consulting with
the NGO's as well through a regular dialogue focused on a set of
focused priorities aimed at improving the human rights situation in
the future and opening up new avenues for information about past
violations. This work is delicate and it must not be presented or
perceived as a vendetta against the Mexican military. A parallel
effort in a new bilateral defense working group, chaired on our
side by DoD/OSD Assistant Secretary Stockton, will be working with
the Mexican defense establishment on a broader agenda keyed to
modernization. NORTHCOM is also working on a human rights training
program that will address issues of military justice, and look for
ways to reinforce civilian protections in the military's doctrine
and training.

10. (SBU) Another element of our human rights strategy is focused
on citizen groups in an effort to build a national consensus that
is unambiguous in its rejection of criminality and violence. This
effort was given a big boost by the Alliance of Youth Movement
conference we held in October, which opened up new links with
individuals, NGOs and other organizations using social networking
media. This began a promising project to get Mexican cell phone
companies to make available free SMS messaging to "denounce" acts
of violence with security tips. The hot line project is moving,
but details are still to be worked out: information has to get from
cell phones to police stations anonymously and in real time; the
police need to be trained to respond; public awareness and
confidence needs to be built through a public information campaign;
and NGOs will have to monitor performance. We will need to engage
community NGOs and the media to reinforce national efforts and U.S.
experts will need a Mexican counterpart to run the local operations
and carry this forward. We have gotten critical support from
Senior Advisor Ross and hope to bring together all of the pieces by
the end of February.

Unprecedented Cooperation

11. (SBU) The considerable progress on all these fronts would not
be possible without the Mexican Government's commitment to work
with us in a way that is unprecedented. This is not only a huge
step forward for our bilateral relationship but it is also helping
to stimulate the creation of a genuine Mexican interagency
coordination process. The Mexicans have created a Deputies
Committee. They meet with our Embassy team and me at least every
two weeks, and usually more often. We have working groups on each
of our strategic goals. Assistant Secretaries in each program area
have met at least twice to ensure that those with policy and
implementation responsibilities engage directly. At the end of
January, NSC Director John Brennan and his Mexican counterparts
will review our strategic plans in a joint Policy Coordination
Group meeting that will launch the intensive work on implementation
and prepare for possible senior level visits in 2010.

Economic Agenda - Joint Competitiveness

12. (SBU) As we institutionalize the security agenda, we will
focus more on economic competitiveness and energy in 2010. To
date, macroeconomic recovery has absorbed 70% of the economic
agenda and trade disputes have taken up another 25%, leaving only a
small residual to advance Mexican and U.S. competitiveness in a

MEXICO 00000202 004 OF 005


global economy. It is striking that our major industrial and
service groups cannot today produce globally competitive cars and
tractors in the United States without integrating their production
lines with Mexico. We are working to document this - but the
anecdotal evidence is profound. While we may lose some jobs in
some sectors to Mexican labor, on the whole we would lose more to
other regions of the world if Mexico did not help us to reduce our
production costs. With Mexico's substantial portion of our imports
and as an important destination for U.S. investment, improving
Mexico's competitiveness is a mutually beneficial goal. These are
key areas where we will focus attention:

--Modern Border: We need to reconceptualize the border to extend
it to transit hubs throughout Mexico and the United States, and
move our security and customs operations to these decentralized
points. As long as border operations are limited to a geographic
line between the United States and Mexico, we will be bound by
physical space and infrastructure. If we create multiple customs
points in cities like Monterrey and Guadalajara, we can expand
processing capacity and accelerate transit. GPS technology will
let us track trucks and trains to confirm that they do not get
diverted and opened. Only by moving in this direction can we
shatter the physical stranglehold on our borders.

--Resolve Trucking: We have to resolve our trucking dispute with
Mexico. Every study has shown that Mexican truckers on U.S. hauls
have performed better than their U.S. counterparts. Our block on
transit flows from Mexico to the United States is hurting our
industry, and if we do not fix this, it will lead to more tariffs
under NAFTA against U.S. products. With health care reform on the
verge of passing, we need a high-level political push to get this
issue on track.

--Energy and Environment: The energy and environment agendas have
huge potential, especially with Mexico hosting the next UN
Framework Convention on Climate Change in December 2010. Already
we are gaining traction on commercial investment in renewables.
EXIM approved in December an $80 million guaranty for wind power to
accompany $150 million in Inter-American Development Bank (IDB)
funds. We will focus more on harmonized regulations and tariffs
that will create the incentives for investment in Mexico that can
supply renewable power north of the border and contribute to our
renewable portfolio standards.

--Poverty: Squarely a Mexican responsibility, but a country of 113
million with a 45% poverty rate on our border affects immigration
flows, DTO recruits and prospects for internal stability in Mexico.
Our community-based pilot programs on security provide an entry
point to engage. Small investments on our side will leverage
billions from the Mexican budget, the IDB and World Bank.

Comment

13. (SBU) These issues are hugely sensitive because they are at the
heart of Mexico's sovereignty. We will have to be sensitive to the
special historical significance of 2010, the two hundred year
anniversary of Mexico's independence and the centennial of its
revolution. The challenge will be to ensure that, at least as far
as we are concerned, the commemoration draw from history but
celebrate the future. Our bilateral relationship has never been
stronger or more mature. Many of the old anti-American shibboleths
are dead or dying, and the real political reform that many believe
will happen in the near future will sweep away a number of the
remaining vestiges of the "Yankee go home" sentiment. Our
cooperation in 2010 can take us a long way to create the kind of
partnership that will help us in regional and even global terms. We
will need the resources and continued senior engagement in order to

MEXICO 00000202 005 OF 005


implement our comprehensive strategy and consolidate the gains we
have achieved so far.
FEELEY

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