VZCZCXRO8517
RR RUEHCD RUEHGD RUEHHO RUEHMC RUEHNG RUEHNL RUEHRD RUEHRS RUEHTM
DE RUEHME #2483/01 2331806
ZNY CCCCC ZZH
R 211806Z AUG 09
FM AMEMBASSY MEXICO
TO RUEHC/SECSTATE WASHDC 7994
INFO RUEHXC/ALL US CONSULATES IN MEXICO COLLECTIVE
RUEHWH/WESTERN HEMISPHERIC AFFAIRS DIPL POSTS
RHMFISS/DEPT OF JUSTICE WASHINGTON DC
RUEHC/DEPT OF LABOR WASHINGTON DC
RUEATRS/DEPT OF TREASURY WASHINGTON DC
RUCPDOC/DEPT OF COMMERCE WASHINGTON DC
RHMFISS/CDR USSOUTHCOM MIAMI FL
RHMFISS/HQ USNORTHCOM
RUEAHLA/DEPT OF HOMELAND SECURITY
RUEABND/DEA HQS WASHINGTON DC
RHEHAAA/NSC WASHINGTON DC

C O N F I D E N T I A L SECTION 01 OF 03 MEXICO 002483 
 
SENSITIVE 
SIPDIS 
 
E.O. 12958: DECL: 08/17/2019 
TAGS: BR CO ECIN ECON EINT EPET MX PGOV PINR PREL
UY, VE 
SUBJECT: CALDERON PLAYS TO DOMESTIC AUDIENCES IN SOUTH 
AMERICA 
 
MEXICO 00002483  001.2 OF 003 
 
 
Classified By: Confidential by Deputy Political Counselor James Merz 
Reason: 1.4 (b),(d). 
 
Message Text: 
¶1.  (C) Summary:  President Calderon visited Colombia, 
Uruguay, and Brazil August 12-August 17 to advance economic 
and political interests.  The Mexican press published flashy 
headlines from Calderon's stops in Colombia and Brazil -- one 
speaking to an ongoing bilateral program on security and 
another to a prospective public-private oil investment 
partnership suggested by Calderon.  Focusing on the economy, 
Calderon and his Colombian counterpart agreed on adjustments 
to the two countries' 1994 free trade accord.  They also 
signed memoranda eliminating double taxation in Uruguay and 
Colombia.  Notwithstanding a degree of traditional Mexican 
competition with Brazil for economic and political space in 
Latin America, Calderon signaled interest in pursuing a Free 
Trade Agreement (FTA) with Brazil.  Throughout the trip, 
Calderon discussed Mexico's expanding role in the 
multilateral sphere.  Though this was an external visit, the 
messaging played to domestic audiences.  End Summary 
 
--------- 
Headlines 
--------- 
 
¶2.  (C) Two major headlines came out of this trip:  1) 
Colombian President Uribe announced that Colombia will send 
enough police to train 10,00 Mexican federal police and 2) 
Calderon announced that the Government of Mexico (GOM) seeks 
an alliance between the two state-controlled oil giants, 
Mexico's PEMEX and Brazil's Petrobas.  The Mexican press 
picked up part of Uribe's police announcement, but did not 
report Uribe's key point: that the Colombian Government 
already provides this critical training on an ongoing basis. 
The announcement signified only an incremental increase in 
the existing partnership.  U.S. Embassy Mexico City NAS 
verified that 24 Colombian investigators already instruct 
1,500 SSP police as part of the USG training effort in San 
Luis Potosi.  (Note:  It is not clear whether the 
announcement refers to something new or is a reference to the 
existing program.  Colombian advisors are also involved in 
independent programs in Ciudad Juarez and elsewhere.  End 
Note.) 
 
¶3.  (C) The second major headline from Calderon's South 
American tour was the announcement that Mexico made progress 
on an agreement between Petrobas and PEMEX.  No definite 
plans came out of the meetings, though Calderon may press GOM 
ministries to follow-up quickly in response to falling oil 
production.  Calderon expressed interest in technology 
exchange with Petrobas, a world leader on deep-sea drilling. 
(Note:  Given Mexico,s constitutional prohibition on private 
investment in the oil sector and Petrobras, preoccupation 
with deepwater drilling off the coast of Brazil, potential 
areas for collaboration will be limited in scope and will not 
include risk content.  End Note)  Calderon highlighted 
GOM-GOB cooperation on a Working Plan on Fuel, under a joint 
MOU signed in 2007.  The two governments also established a 
joint Brazilian-Mexican Business Forum, with the objective of 
increasing bilateral commerce. 
 
--------------------- 
Free Trade Agreements 
--------------------- 
 
¶4.  (C) Uribe announced to the Colombian press that Calderon 
primarily came to Bogota to sign the "G-2 Free Trade 
Agreement."  The Group of Three, or "G-3" FTA was signed in 
1994 between Mexico, Colombia, and Venezuela, but Venezuela 
unilaterally pulled out of the agreement in November 2006. 
The two presidents hailed the successful conclusion of 
negotiations to modify the existing FTA.  The modifications 
included incorporating of new rules of origin, increasing the 
powers of the Agreement's Administrative Commission, and 
changing the name of the Agreement to reflect the departure 
of the third party.  Both the Mexican and Colombian 
legislatures have to ratify these modifications. 
 
 
MEXICO 00002483  002.2 OF 003 
 
 
¶5.  (C)  In Brasilia, Calderon also talked publicly of his 
blue-sky plans for a Mexican-Brazilian free trade plan. 
However, Cuevas told PolOff no defined plans exist to move 
forward with such a treaty.  ProMexico (an agency focused on 
attracting foreign investment and promoting Mexican exports) 
and the Brazilian Agency of Imports and Foreign Investment 
(APEX) signed an MOU to demonstrate their willingness to 
promote bilateral trade. 
 
--------------------------- 
Eliminating Double Taxation 
--------------------------- 
 
¶6. (SBU) During his joint speech with Calderon, Uruguayan 
President Vazquez stressed that bilateral trade had grown 
240% since Uruguay and Mexico signed an FTA in 2004. 
However, during Calderon's visit, the two countries 
eliminated further barriers to investment: double taxation 
and international tax evasion. Legislators will not have to 
ratify this agreement into law.  Calderon and Uribe signed a 
similar memorandum, but Mexico does not appear ready to break 
down such barriers with Brazil. 
 
--------------- 
Multilateralism 
--------------- 
 
¶7.  (SBU)  Calderon also demonstrated his desire for Mexico 
to assume a more prominent profile in the multilateral arena. 
In all three countries he visited, Calderon and/or each of 
his counterparts stressed support for Honduras and the 
importance of Zelaya's return.  Uribe, Vezquez, and Lula 
affirmed they would support Mexico's candidate for a vacancy 
on the Inter-American Commission of Human Rights in 
2010-2013.  Publicly, Mexico announced its commitment to host 
the following meetings in 2009-2010: the next Latin American 
Pacific Arc (ARC) Summit (November 23-24); the Summit of 
Latin America and the Caribbean on Integration and 
Development; and the Summit of the Rio Group, which Mexico 
chairs.  Calderon pledged to work with Brazil on assistance 
to Haiti.  In Brazil, Calderon also stressed Mexico's 
commitment to working closely with other developing countries 
at the upcoming meetings of the G-5 and G-20. 
 
------------------------------ 
Comment: Sending Messages Home 
------------------------------ 
 
¶8.  (C) President Calderon used this trip to send two signals 
to domestic Mexican audiences:  one political and one 
economic.  By quickly launching this trip to South America 
after his Guadalajara meeting with POTUS and Canadian Prime 
Minister Harper, Calderon clearly wanted to draw attention to 
Mexico's leadership in Latin America.  Calderon even proposed 
a trade affiliation with Mexico's traditional rival, Brazil. 
He thereby reinforced Mexico's partnership with other Latin 
nations and de-emphasized Mexico's economic and political 
reliance on the U.S., a message that plays well domestically. 
 
¶9.  (C) Mexico,s heavy dependence on the U.S. market has 
played a significant part in Mexico's economic problems. 
Polls show that while security remains a high priority for 
the Mexican public, the economic downturn was the driving 
issue behind the victory scored by the opposition PRI in last 
month,s mid-term elections.  After his meeting with Lula, 
Calderon emphasized that "depending economically on only one 
region is inadequate for any country" and "such dependency 
explains why Mexico was so affected in this economic crisis." 
 By removing barriers to investment and establishing closer 
ties between business communities, Calderon seeks to 
diversify Mexico's economy, improve prospects for new markets 
in Brazil and other Latin economies, and foster increased 
investment from the region.  As the PRI has significant 
influence over the federal budget, looking for informal 
economic agreements or those without difficult federal 
ratification processes is one way in which Calderon can 
demonstrate to the Mexican public that PAN is taking steps to 
allay the pinch on their wallets. 
Visit Mexico City's Classified Web Site at 
 
MEXICO 00002483  003.2 OF 003 
 
 
http://www.state.sgov.gov/p/wha/mexicocity and the North American 
Partnership Blog at http://www.intelink.gov/communities/state/nap / 
 
FEELEY