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DE RUEHME #4017/01 2112241
ZNR UUUUU ZZH
P 302241Z JUL 07
FM AMEMBASSY MEXICO
TO RUEHC/SECSTATE WASHDC PRIORITY 8200
INFO RUEHXC/ALL US CONSULATES IN MEXICO COLLECTIVE PRIORITY
RUCPDOC/DEPT OF COMMERCE WASHDC PRIORITY
RUEHRC/DEPT OF AGRICULTURE WASHDC PRIORITY
RHEBAAA/DEPT OF ENERGY WASHINGTON DC PRIORITY
RUEHC/DEPT OF LABOR WASHDC PRIORITY
RUEATRS/DEPT OF TREASURY WASHINGTON DC PRIORITY
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UNCLAS SECTION 01 OF 02 MEXICO 004017 
 
SIPDIS 
 
SENSITIVE 
SIPDIS 
 
STATE FOR A/S SHANNON 
STATE FOR WHA/MEX, WHA/EPSC, EB/IFD/OMA 
STATE FOR WHA GSPROW 
STATE FOR EB/ESC MCMANUS AND IZZO 
USDOC FOR 4320/ITA/MAC/WH/ONAFTA/GWORD 
USDOC FOR ITS/TD/ENERGY DIVISION 
TREASURY FOR IA (ALICE FAIBISHENKO) 
DOE FOR INTERNATIONAL AFFAIRS KDEUTSCH AND ALOCKWOOD 
STATE PASS TO USTR (EISSENSTAT/MELLE) 
STATE PASS TO FEDERAL RESERVE (CARLOS ARTETA) 
NSC FOR DAN FISK 
 
E.O. 12958: N/A 
TAGS: ECON ECPS EFIN ELAB MX PGOV PREL
SUBJECT: MEXICO ECONOMIC NOTES, JULY 14 - JULY 27 
 
Summary 
------- 
 
¶1.  (SBU)  Senior Mexican officials told Commerce Assistant 
Secretary Bohigian they wanted more participation from U.S. 
 
SIPDIS 
Cabinet level officials to push the prosperity agenda at the 
upcoming North America SPP Summit.  While the Confederation 
of Mexican Workers (CTM) publicly announced its support for 
President Calderon's fiscal reform initiative, other CTM 
members do not support it.  Pemex reported that Mexico has 
less than seven years of oil production remaining at current 
rates.  The USG trained more than 50 Mexican officials in IPR 
enforcement.  Consumer price inflation rose 0.25% in the 
first half of July. 
 
Need More Ministerial Senior Participation 
------------------------------------------ 
 
¶2.  (SBU) Representatives from the Economy Secretariat used a 
meeting with Commerce A/S David Bohigian to again express 
their desire for the upcoming Leader's meeting in Canada to 
be under the auspices of the Security and Prosperity 
Partnership (SPP).   Undersecretary for Trade, Beatriz 
Leycegui, and Chief Advisor to the Minister of Economy 
Alberto Ortega both said that the SPP is the proper forum for 
the meeting and asked for U.S. support in making sure the SPP 
agenda is advanced.  They further said that the current 
agenda is too focused on security without a proper balance of 
prosperity issues.  They requested that there be more 
participation from Cabinet level officials to push the 
prosperity agenda and requested Commerce Secretary 
Guittierrez's participation as a complement to Economy 
Secretary Sojo, who will be attending. 
 
SIPDIS 
 
CTM Supports Fiscal Reform, but members differ 
--------------------------------------------- - 
 
¶3.  (SBU) Joaquin Gamboa Pascoe, the national leader for the 
Confederation of Mexican Workers (CTM), the largest labor 
federation in Mexico has publicly announced his 
organization's support for President Calderon's fiscal reform 
initiative.  According to Gamboa, the reform is a necessary 
measure and, in his view, does not negatively affect the 
interests of Mexico's workers.  In the same public statement 
Gamboa indicated that he had met with Mexico's Treasury 
Secretary, Agustin Carstens, to discuss the reform and 
 
SIPDIS 
received assurances from him that the proposed reform would 
protect the current legal rights of workers.  Gamboa's public 
position on the GOM's fiscal reform initiative is at odds 
with the private positions of some members of the CTM 
National Executive Committee.  One member of the Committee in 
particular, who is also a federal deputy who will vote on the 
initiative, is reportedly very much opposed to the reform. 
At this point it is not clear whether the federal deputy has 
changed his view, is going to quietly oppose his union's 
national leader, or will follow Gamboa's orders in this 
matter despite his own reservations on the issue. 
 
 
Embassy Trains Mexican Customs Officials 
---------------------------------------- 
 
¶4.  (SBU) The Embassy, together with the Departments of 
Justice and Homeland Security, and supported by the World 
Customs Organization, held a five-day training course on 
detecting and detaining imports of pirated and counterfeit 
goods for more than 50 Mexican customs and law enforcement 
officials at the Port of Veracruz July 23-27.  See septel for 
a detailed read-out. 
 
Pemex: Only Seven Years of Oil Left 
 
MEXICO 00004017  002 OF 002 
 
 
----------------------------------- 
 
¶5.  (U)  In an SEC filing, Pemex reported developed proven 
oil reserves of 8.978 billion barrels and annual production 
of 1.332 billion barrels implying that Mexico has less than 
seven years of production remaining at current rates. 
Previously, Pemex had reported 9.3 years of reserves 
remaining at current production rates.  A Pemex spokesman 
noted that the SEC filing did not include 3.92 billion 
barrels of reserves "under development," which would add an 
additional 2.9 years to Pemex's remaining production. 
Meanwhile Mexican private sector organizations called for 
changes in the country's restrictive energy policy.  The 
Businessmen's Coordinating Council (CCE) called on the 
government and congress to open hydrocarbon development to 
the private sector, making it a "real platform for 
development."  The Mexican Businessman's Council proposed 
changing Pemex's legal framework to permit the company access 
to new technologies, financial resources, and specialized 
personnel. 
 
Inflation Up 
------------ 
 
¶6.  (U) Consumer price inflation rose 0.25% in the first half 
of July, resulting in increased annual inflation rate of 
4.08%.  A Bank of Mexico (BOM) report said the prices of 
dairy, tomatoes, and other food products rose and thus 
resulted in overall higher consumer prices.  Analysts believe 
that the BOM will face continued pressure to raise interest 
rates by a quarter percentage point to 7.5%.  The BOM has 
stated that it will resist the urge to hike interest rates, 
as their predictions see inflation rates dropping below 4% by 
mid-August.  Core inflation rose 0.20% in the first half of 
the month of July. 
 
 
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