VZCZCXYZ0005
RR RUEHWEB

DE RUEHBU #1632/01 3361845
ZNR UUUUU ZZH
R 011845Z DEC 08
FM AMEMBASSY BUENOS AIRES
TO RUEHC/SECSTATE WASHDC 2583
INFO RUCNMER/MERCOSUR COLLECTIVE
RUEHCV/AMEMBASSY CARACAS 1905
RUEHME/AMEMBASSY MEXICO 1715
RHMFIUU/HQ USSOUTHCOM MIAMI FL
RHMFIUU/DEPT OF JUSTICE WASHINGTON DC
RUEKJCS/SECDEF WASHINGTON DC
RUEATRS/DEPT OF TREASURY WASHINGTON DC
RHEFDIA/DIA WASHINGTON DC
RUCPDOC/DEPT OF COMMERCE WASHINGTON DC

UNCLAS BUENOS AIRES 001632 
 
SENSITIVE 
SIPDIS 
 
E.O. 12958: N/A 
TAGS: PREL PGOV ECON SNAR ETRD EFIN AR MX
SUBJECT: ARGENTINA: MEXICAN PRESIDENT CALDERON'S VISIT 
SHARPENS FOCUS ON THE KIRCHNER ECONOMIC "MODEL" 
 
REF: BUENOS AIRES 1571 
 
¶1. (SBU) Summary: Mexican President Felipe Calderon paid a 
state visit to Argentina November 23-25, renewing a 
diplomatic relationship that had been relatively limited 
since the 2005 Summit of the Americas at Mar de Plata, 
despite growing commercial ties over that period.  GOA 
officials emphasized that Calderon was accompanied by over 40 
high-level Mexican entrepreneurs, placing the visit squarely 
in the context of Argentina's response to the global economic 
crisis.  The two presidents addressed a gathering of over 200 
business executives on November 24.  Calderon's pragmatic 
call for trade, integration, and judicial security stood in 
some contrast to President Fernandez de Kirchner's emphasis 
on state intervention and on blaming the United States (in 
all but name) for the economic pain being felt by developing 
countries.  Argentine Foreign Minister Taiana told the 
Ambassador that the visit demonstrated that governments with 
different world views can still cooperate well in concrete 
areas, and the Argentine Foreign Trade Secretary said the 
Mexican businessmen accompanying Calderon were eager to do 
business.  Argentina values its ties to Mexico, and the 
attentive public reacted to the visit positively.  For the 
GOA, it offered an important complement to other, sometimes 
challenging, hemispheric ties.  Taiana has in the past 
described the opening to Mexico as "strategic," economically 
and politically.  Coming amidst continuing Argentine 
headlines about the illicit trade in ephedrine, generally for 
diversion to Mexico where it is banned, the visit also 
featured a bilateral agreement to increase collaboration and 
consultation against the drug trade. End Summary. 
 
Contrasting Economic Discourse 
------------------------------ 
 
¶2. (U) Both Presidents addressed the high-level business 
seminar "Argentina-Mexico Opportunities in Trade and 
Investment" on November 24. Calderon's careful remarks on the 
global economic crisis received a positive response.  His 
statement that "where the law prevails, investment can 
flourish" stood in some contrast to President Fernandez de 
Kirchner's (CFK) approach to economic management during 
crises, which she said made clear that "the state will be the 
principal actor in the coming period." Calderon also warned 
that developing countries should not resort to protectionism 
in the face of the crisis. 
 
¶3. (U) CFK, who on November 25 announced elements of a GOA 
response to the crisis (septel), argued that "our societies 
cannot be allowed to suffer for the errors committed in other 
latitudes."  Still, she lamented that "our countries have to 
pay the consequences for actions for which we were not 
responsible."  Calling for "revisiting the model of economic 
development," which she called "strictly financial 
capitalism," CFK claimed that Argentina's six-year run of 
economic growth occurred because "we did the exact opposite" 
of the policy prescriptions propounded by the developed 
countries and the IMF. 
 
¶4. (U) She proposed that Mexico and Argentina "combine 
efforts, mechanisms, resources and intelligence" to mitigate 
as much as possible the crisis; her additional suggestion 
that the two countries combine "neurons" to find solutions 
attracted at least one headline writer.  South-south 
technology transfer, she claimed, was inherently superior to 
acquiring technology from what she called the "core 
countries," which she said only transfer their technology via 
a system that imposes "subordination and dependence" on 
developing countries.  "A unipolar system dominated by a 
hegemonic power," she said, "helps no one, not even the 
hegemon itself." 
 
¶5. (SBU) Press reports on the visit focused on the centrality 
of bilateral trade for both countries, noting that it had 
risen to almost USD 2.8 billion in 2007.  Mexico has also 
been a major source of direct investment in Argentina. 
Telmex, represented in Calderon's delegation by Carlos Slim 
and in Argentina through its "Claro" brand, owns a 35% share 
of the robust cellular telephone market (there is slightly 
more than one cell phone per capita in the country).  Also 
participating, along with about 40 other Mexican executives, 
was Carlos Salazar Lomelin of Coca-Cola FEMSA, the exclusive 
 
Coca-Cola distributor in Argentina (and also President of the 
Mexican-Argentine Business Committee).  FM Taiana told the 
Ambassador that Argentina's Foreign trade Secretary had said 
the Mexican businessmen traveling with Calderon were eager to 
do business.  The Mexican Ambassador told the Ambassador that 
the visit was "fruitful," singling out the bilateral 
narcotics agreement as particularly significant.  The Mexican 
Political Counselor added to Poloff that a lot of follow-up 
work is already being generated, especially on the commercial 
front. 
 
¶6. (U) Newspapers quoted sources in the GOA as emphasizing 
that the economic relationship with Mexico offers a valued 
counterweight to the necessarily dominant trade ties between 
Argentina and Brazil.  In addition to receiving significant 
investment from Mexico, Argentina ran a goods trade surplus 
with Mexico averaging nearly USD 450 million per year between 
2002 and 2006, led by a surplus in automobiles and auto 
parts.  In 2007, the surplus fell to USD 97 million, and 
through the first three quarters of 2008 Argentina ran a 
deficit of USD 276 million.  Imports from Mexico include 
telephone equipment and automobiles and auto parts as well. 
 
Bilateral Relations 
------------------- 
 
¶7. (U) Calderon spoke positively about the Argentine-Mexico 
 
bilateral partnership, saying "we are unquestionably allies." 
 Sources indicated that the two Presidents agreed in the 
their private meeting at the Casa Rosada to press for full 
inclusion of Cuba within the Rio Group.  Kirchner, for her 
part, referred to the gratitude of the many Argentines who 
received asylum in Mexico during the "dirty war" years in 
Argentina.  She suggested that Mexico should continue in its 
special observer role in Mercosur.  Foreign Minister Jorge 
Taiana told the Ambassador on November 26 that the visit 
demonstrated that a bilateral relationship involving two 
governments with different world views could, for reasons of 
national interest, work well together. 
 
Counter-Drug Cooperation 
------------------------ 
 
¶8. (U) With continuing government and press attention to the 
trafficking of ephedrine through Argentina to Mexico, 
counter-drug cooperation was a natural and potentially useful 
part of the visit.  Argentine Minister of Justice Anibal 
Fernandez and his counterpart, Attorney General Eduardo 
Medina Mora, signed a Memorandum of Cooperation which calls 
for the exchange of information over four years on drug 
routes, trends, trafficking networks and clandestine 
production, chemical precursor trade and money laundering. 
The agreement also calls for the two countries to work toward 
the conclusion of a bilateral extradition treaty.  Medina 
said publicly that Mexican cartels were seeking to open new 
routes through Argentina, an observation of interest in 
Argentina given Minister Fernandez's frequent and forceful 
denials that Mexican cartels are operating in the country 
(reftel). 
 
Buenos Aires Mayor and Congress 
------------------------------- 
 
¶9. (U) On November 25 President Calderon met with Buenos 
Aires mayor Mauricio Macri, whose Greater Buenos Aires based 
PRO party, noted the press, is a better ideological fit with 
the Mexican PAN.  Indeed, Macri joined Calderon in urging 
against a protectionist response to the global economic 
crisis, encouraging instead greater economic integration.  In 
his address to a joint session of the Argentine Congress, 
Calderon emphasized the two countries' shared economic 
future.  He spoke in favor of increased bilateral efforts to 
fight crime, narcotics trafficking, and corruption, and 
emphasized his government's commitment to protecting human 
rights. 
 
An Important Return 
------------------- 
 
¶10. (SBU) Comment: The Calderon visit offered Argentines an 
interesting contrast in styles, with CFK's more ideological 
economic discourse contrasting with Calderon's more pragmatic 
 
emphasis.  Commentators noted the very different political 
orientations of the two Presidents and their parties.  Still, 
as FM Taiana acknowledged to the Ambassador, the visit was 
useful for the GOA.  Since former Mexican President Vicente 
Fox took umbrage at Nestor Kirchner's theatrics at the 2005 
Mar de Plata Summit of the Americas, Argentine-Mexican 
diplomatic relations have been frigid despite continuing 
growth in private economic ties.  For the GOA, stronger 
diplomatic ties with Mexico offer a complement to and perhaps 
even occasional counterweight to the Brazil/Mercosur and 
Venezuela/Bolivarian axes.  For Mexico, it appears, Argentina 
is both an important access point to Mercosur and a bilateral 
commercial relationship with continued potential for growth. 
WAYNE