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DE RUEHME #0104/01 0161930
ZNR UUUUU ZZH
R 161930Z JAN 08
FM AMEMBASSY MEXICO
TO RUEHC/SECSTATE WASHDC 0156
INFO RUEHXC/ALL US CONSULATES IN MEXICO COLLECTIVE
RUEAWJA/DEPT OF JUSTICE WASHDC
RUEHC/DEPT OF LABOR WASHDC
RUEATRS/DEPT OF TREASURY WASHDC
RUCPDOC/DEPT OF COMMERCE WASHDC
RHMFIUU/CDR USSOUTHCOM MIAMI FL
RHMFIUU/CDR USNORTHCOM
RUEAHLA/DEPT OF HOMELAND SECURITY
RHEHNSC/NSC WASHDC
RUEABND/DEA HQS WASHINGTON DC

UNCLAS SECTION 01 OF 03 MEXICO 000104 
 
SIPDIS 
 
SENSITIVE 
SIPDIS 
 
STATE FOR WHA/MEX, H 
 
E.O. 12958: N/A 
TAGS: PGOV PREL SNAR KCRM ECON MASS MX
SUBJECT: SCEENSETTER FOR THE VISIT OF CODEL CUELLAR TO 
MEXICO, JANUARY 20-22, 2008 
 
REF: MEXICO 06228 
 
 
¶1.  Welcome to Mexico City and Matamoros.  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 measures 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, which along with a more flexible 
attitude by the courts has allowed for the extradition of a 
record 83 criminals to the U.S. in 2007, 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 2007, 
over 300 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.  In October 
2007, eight soldiers were tried on charges relating to the 
beating of 7 policemen and the rape of some 14 women.  Four 
of the soldiers were acquitted; the other four were convicted 
and sentenced up to 41 years, marking the first time troops 
have been tried and convicted in civilian courts. 
Outstanding allegations against members of a variety of 
federal, state and local security elements remain unresolved 
and under 
investigation.  In January, Mexico's Army (SEDENA) create a 
Human Rights Office to address human rights concerns, promote 
greater respect for human rights and bring Mexico into 
compliance with its obligations under international 
humanitarian law. 
 
MEXICO 00000104  002 OF 003 
 
 
 
------------------------- 
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. 
 
-------------- 
Justice Reform 
-------------- 
 
¶9.  The Mexican Senate passed judicial reform legislation in 
December that would facilitate transition to an oral trial 
system, give law enforcement officials broader search and 
seizure authority, allow consensual monitoring of telephone 
calls, and give police more responsibility for conducting 
investigations.  Since the Senate modified several articles 
of the draft prior approved by the House of Deputies, the 
Senate version will return to the House for 
consideration in February.  Several leftist parties and human 
rights activists described the legislation as a "step 
backwards," giving the State excessive authorities at the 
expense of the accused.  Many jurists, however, believe 
effective implementation of the legislation will make the 
Mexican system work more transparently, expeditiously, and 
fairly. 
 
------- 
Economy 
------- 
 
¶10.  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 
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 
--------------------------------------------- --- 
 
¶11.  Having completed his first 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. 
 
¶12.  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 
---------------------- 
 
 
MEXICO 00000104  003 OF 003 
 
 
¶13.  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. 
 
-------------------------- 
Regional Focus:  Matamoros 
-------------------------- 
 
¶14.  The border region, including Matamoros, is a key 
economic conduit between the U.S. and Mexico. Matamoros is 
the third-largest city in the state of Tamaulipas behind 
Reynosa and Nuevo Laredo. As with other cities along the 
border, the economy on both sides is heavily influenced by 
the maquila industry with significant U.S. manufacturing 
investment. In addition to Mexico's heavy reliance on U.S. 
industrial investment for employment in the region, U.S. 
commerce along the border relies heavily on retail spending 
by visiting Mexicans as the majority of consumer items are 
less expensive and more readily available in the U.S. 
 
¶15.  The delicate balance of U.S. industrial investment and 
Mexican consumerism along the border is affected by the 
current issues of narcotrafficking in Mexico and increased 
security efforts by DHS. The recent increase in combating 
narcotrafficking has resulted in a number of 
highly-publicized confrontations between Mexico's Federal 
Police (AFI) and the Gulf Cartel in the region. In 
particular, firefights in Rio Bravo and Reynosa since the New 
Year have increased security concerns potentially inmpacting 
future investment decisions. Additionally, increased wait 
times at border crossings have produced increase delays and 
shipping costs for U.S. industrial interests in Mexico, as 
well as serving a possible deterrent for Mexican consumers 
that might cross the border into the U.S. market to shop. 
 
¶16.  Additional topics at the heart of many regional concerns 
and possible topics of conversation during your meeting in 
Matamoros include the proposed border wall, shared water 
resources and physical infrastructure. Contacts on both sides 
of the border fear economic and social backlash from the 
proposed border wall. In the agricultural community, in 
particular, Tamaulipas farmers allege that deliveries of Rio 
Grande water to the U.S. under the 1944 Treaty deprive them 
of needed water.  The latest flare-up, tiggered by deliveries 
to end the 2002-2007 water cycle without a deficit is 
currently being analyzed by the Mexican Supreme Court. (The 
shared water supplies that fall under the IBWC include Rio 
Grande resources such as the Falcon Dam reservoir in the 
northern portion of the Matamoros consular district.) A 
continued lack of sufficient public infrastructure in terms 
of highways, electricity and sanitation, among others, 
contributes to a cautious investment environment. 
 
 
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