VZCZCXRO8596
PP RUEHCD RUEHGD RUEHHO RUEHMC RUEHNG RUEHNL RUEHRD RUEHRS RUEHTM
DE RUEHME #1523/01 1411227
ZNR UUUUU ZZH
P 201227Z MAY 08
FM AMEMBASSY MEXICO
TO RUEHC/SECSTATE WASHDC PRIORITY 1926
INFO RUEHXC/ALL US CONSULATES IN MEXICO COLLECTIVE PRIORITY
RUEHBO/AMEMBASSY BOGOTA PRIORITY 4060
RUEHGT/AMEMBASSY GUATEMALA PRIORITY 3694
RUEHPE/AMEMBASSY LIMA PRIORITY 1574
RUEHMU/AMEMBASSY MANAGUA PRIORITY 1028
RUEHZP/AMEMBASSY PANAMA PRIORITY 2315
RUEHQT/AMEMBASSY QUITO PRIORITY 1369
RUEHSJ/AMEMBASSY SAN JOSE PRIORITY 1825
RUEHSN/AMEMBASSY SAN SALVADOR PRIORITY 2583
RUEHSG/AMEMBASSY SANTIAGO PRIORITY 0626
RUEHDG/AMEMBASSY SANTO DOMINGO PRIORITY 0767
RUEHTG/AMEMBASSY TEGUCIGALPA PRIORITY 1781
RULSDMK/DEPT OF TRANSPORTATION WASHINGTON DC PRIORITY
RUEATRS/DEPT OF TREASURY WASHINGTON DC PRIORITY
RUCPDOC/DEPT OF COMMERCE WASHINGTON DC PRIORITY
RUEAHLA/DEPT OF HOMELAND SECURITY PRIORITY
RUEHRC/DEPT OF AGRICULTURE WASHINGTON DC PRIORITY
RHEHNSC/NSC WASHINGTON DC PRIORITY

UNCLAS SECTION 01 OF 04 MEXICO 001523 
 
SENSITIVE 
SIPDIS 
 
STATE FOR A/S SHANNON AND A/S SULLIVAN 
STATE FOR WHA/MEX, WHA/EPSC, EB/TPP 
USDOC FOR A/S BOHIGIAN 
USDOC FOR 4320/ITA/MAC/WH/ONAFTA/GERI WORD 
TREASURY FOR IA (LUYEN TRAN, RACHEL JARPE) 
DHS FOR CBP/PSO/MARTINEZ_FONTS 
NSC FOR RICHARD MILES, DAN FISK 
STATE PASS TO USTR (EISSENSTAT/MELLE) 
STATE PASS TO FEDERAL RESERVE (ANDREA RAFFO) 
STATE PASS TO GSA/PEPPLER 
 
E.O. 12958: N/A 
TAGS: ETRD ECON PBTS KTEX EAGR MX
SUBJECT: MEXICO PUBLICLY PUSHES FOR PROGRESS ON 
CROSS-BORDER TRUCKING, BORDER INFRASTRUCTURE, AND ALLIANCE 
FOR GROWTH AND PROGRESS-TYPE GOALS 
 
REF: (A) 08 SECSTATE 41895 (B) 07 MEXICO 6186 (C) 08 
     MEXICO 1333 
 
Summary 
-------- 
 
¶1. (U) In a May 14 briefing to the Trade and Investment 
Committe of the American Chamber of Commerce in Mexico, 
Mexican Under Secretary of International Trade Negotiations 
for the Ministry of Economy Beatriz Leycegui urged the 
business community to support GOM efforts to improve the 
competitiveness of North America. She said the top priorities 
were for the U.S. to meet its NAFTA obligation to open the 
border to cross-border trucking; facilitating border 
crossings and improving border infrastructure; and reducing 
trade barriers caused by differing technical norms and 
sanitary and phyto-sanitary standards (SPS). She reviewed 
Mexico's "vision" for confronting the declining 
competitiveness of North America, which focused on deepening 
trade integration within the Americas including through the 
Pacific Arc Forum (REF C), but included efforts to deepen 
trade ties with Europe and Asia. She explained that although 
there could be no renegotiation of NAFTA, the agreement would 
benefit from some specific revisions and improvements. End 
Summary 
 
 
¶2.  (U) Leycegui first presented an analysis of how North 
America was losing competitiveness compared to Brazil, 
Russia, India and China, and then laid out Mexican efforts to 
confront the problem. She said a top Mexican goal was the 
successful conclusion of the Doha Round because a failure of 
the Round risked increased global protectionism, especially 
given pressures stemming from the global crisis in food 
prices. 
 
Deepening Trade Integration Within North America 
--------------------------------------------- -- 
 
¶3. (U) With North America, Leycegui said Mexico's priorities 
were the cross-border trucking demonstration project, 
facilitating border crossing and improving border 
infrastructure, and regulatory cooperation. On trucking, she 
said the only NAFTA obligation not yet implemented was the 
U.S. obligation to fully open the border to cross-border 
trucking. She stressed the importance of meeting this 
obligation for North American competitiveness, noting that 
the current requirement to transfer cargo between three 
trucks when crossing the border posed a serious competitive 
disadvantage, negating the benefit of Mexico's location 
adjacent to the United States. 
 
¶4. (U) Leycegui explained that the purpose of the one-year 
cross border trucking demonstration project was to show that 
Mexican trucks are ready to enter the United States and 
comply fully with U.S. regulations. She said that under the 
program, Mexican trucks have crossed into the U.S. more than 
6000 times without any incident. She expressed concern that 
more companies were not participating in the program, noting 
that as long as it was only a one-year "pilot," companies 
 
MEXICO 00001523  002 OF 004 
 
 
would not make the required investment. She expressed 
gratitude for the Bush Administration's complete commitment 
to the demonstration project, and to moving from the one-year 
pilot to a completely free flow of trucks across the border 
as required by NAFTA.  She noted that the U.S. and Mexican 
governments were both  highly concerned that legal challenges 
could suspend the program.  She noted that once it becomes 
clear that the program will continue, the Mexican Trucking 
Association, CANACAR, will pressure the Mexican Senate to put 
restrictions on U.S. trucks reciprocal to those placed on 
Mexican trucks. (Note: CANACAR claims that U.S. regulations 
on Mexican trucks are currently more strict than vice versa. 
End note.) 
 
5.(U) Regarding the other two priorities, Leycegui noted that 
there were "very specific measures needed urgently" to 
improve border infrastructure, and explained that technical 
norms, sanitary and phyto-sanitary standards, and the failure 
of Mexico, the U.S., and Canada to recognize each others' 
certifications posed a major barrier to trade. 
 
¶6. (U) Leycegui stressed the importance of the Security and 
Prosperity Partnership (SPP) as a mechanism to overcome these 
challenges, especially its Presidential- and 
Ministerial-level meetings. She emphasized the need to deepen 
and institutionalize such regional integration in North 
America. 
 
¶7. (U) She urged the private sector to participate in the 
"Great Debate about NAFTA" in order to publicize its benefits 
for consumers and the overall economies of our three 
countries. She further urged the private sector to seek 
bilateral and trilateral synergies with the U.S. and Canada 
to expand the benefits of NAFTA.  She said that there could 
be no renegotiation of NAFTA, but NAFTA could use revision 
and improvement, for example to make its rules of origin more 
flexible, further integrate the sugar sectors, make 
much-needed improvements to the services chapters, and to 
expand recognition of professionals. 
 
Regional Trade Integration in Latin America 
-------------------------------------------- 
 
¶8.  (U) In contrast to the U.S., Leycegui said there was a 
favorable geopolitical environment in Latin America to deepen 
trade ties.  Her description of Latin American efforts to 
widen their integration was similar to what she gave Econoffs 
on April 29 (REF C).  She reviewed how certain Latin American 
countries, especially Mexico, Colombia, Peru and Chile, were 
working through the Pacific Arc Forum (PAF, a.k.a. Pacific 
Basin Initiative Forum) to establish cumulation of origin 
amongst common free trade partners, starting with texile 
cumulation with CAFTA.  She said the ultimate goal was 
convergence among the Latin American FTA's. She noted that 
those countries most interested were forging ahead, with 
others able to reserve the right to join up later.  She said 
that Canada was very interested in the Pacific Arc Forum, and 
the United States was positive about the idea of cumulation 
of origin, but not participating due to its domestic 
political environment. She noted that because the United 
 
MEXICO 00001523  003 OF 004 
 
 
States was the most 
important market for the Latin America countries now working 
to integrate their FTA's, the rules and standards these 
countries were seeking to harmonize naturally tended toward 
standards for the U.S. market. She said this fact would make 
it easier for the United States to join the process once U.S. 
domestic politics allowed. 
 
¶9. (U) In addition to efforts via the Pacific Arc Forum, 
Leycegui said Mexico and Colombia were deepening their FTA. 
Mexico was in an advanced state of negotiations on an FTA 
with Peru, was committed to negotiating an FTA with Panama, 
and should have an FTA with the Dominican Republic in about 
four years. She said Mexico was seeking to widen coverage of 
its "Economic Complementarity Agreements" with Brazil, 
Ecuador, Argentina and Cuba. 
 
 
Trade Integration with Asia 
---------------------------- 
 
¶10. (U) With Asia, Leycegui said Mexico was being careful in 
its FTA negotiations with South Korea, following the U.S. and 
Canadian examples of ensuring provisions to protect the auto 
sector. She asked the American Chamber to provide input for 
the GOM position in these negotiations. She explained that 86 
percent of what Mexico imports from South Korea is already 
liberalized, so Mexico is trying to take greater advantage of 
this already liberalized trade. 
 
¶11. (U) Leycegui said Mexico was optimistic about 
Strengthening its "Economic Association Agreement" with 
Japan.  With China, however, she said the "precarious" 
situation of bilateral trade with China prevents Mexico from 
negotiating an FTA right now.  She said the GOM was aware, 
however, that Chile had an FTA with China, and Peru and Costa 
Rica were negotiating FTA's, which meant those countries 
would receive trade benefits in the growing Chinese marker 
that Mexican exporters would not enjoy. Leycegui also noted 
that there are several upcoming meetings with China to 
address various trade concerns. 
 
Trade Integration with Europe 
---------------------------- 
 
¶12.  (U) With the European Union, she said Mexico was 
negotiating revisions to its chapters on agriculture, 
services and investment.  She said Mexico was also working 
with the EU program to facilitate trade under this FTA, and a 
separate EU program to support small- and medium-sized 
enterprises in Mexico. 
 
Comment 
------- 
 
¶13. (U) Leycegui's public comments are further affirmation 
that Mexican leaders remain committed to greater 
liberalization and integration as the best ways of ensuring 
national and regional competitiveness in the global 
marketplace of the 21st Century.  We underline Leycegui's 
 
MEXICO 00001523  004 OF 004 
 
 
public statement that the one-year demonstration project due 
to end in September will be followed by full liberalization 
of cross-border trucking.  Clearly Mexico sees this as 
important to improving North American competitiveness.  End 
comment. 
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