VZCZCXRO9809
PP RUEHCD RUEHGD RUEHHO RUEHNG RUEHNL RUEHRD RUEHRS RUEHTM
DE RUEHMC #0445/01 3412053
ZNR UUUUU ZZH
P 072053Z DEC 09
FM AMCONSUL MONTERREY
TO RUEHC/SECSTATE WASHDC PRIORITY 4135
INFO RUEHME/AMEMBASSY MEXICO PRIORITY 5221
RUEHXC/ALL US CONSULATES IN MEXICO COLLECTIVE
RUCPDOC/DEPT OF COMMERCE WASHINGTON DC
RUEATRS/DEPT OF TREASURY WASHINGTON DC
RUEFHLC/DEPT OF HOMELAND SECURITY WASHINGTON DC
RUEHMC/AMCONSUL MONTERREY 9763

UNCLAS SECTION 01 OF 03 MONTERREY 000445 
 
SENSITIVE 
SIPDIS 
 
E.O. 12958: N/A 
TAGS: PGOV EIND EINV SOCI ASEC EAID ECON MX
SUBJECT: NUEVO LEON AND ZACATECAS GOVERNORS SEEK INFRASTRUCTURE 
DEVELOPMENT 
 
REF: MONTERREY 442 
 
MONTERREY 00000445  001.2 OF 003 
 
 
¶1.  (SBU)  Summary:  On the margins of the Mexico Business 
Summit, held in Monterrey November 8-10 (reftel), the Ambassador 
met (separately) with the Governors of Nuevo Leon and Zacatecas. 
 During a November 10 meeting, the Ambassador and Nuevo Leon 
Governor Rodrigo Medina (PRI) discussed innovative solutions to 
streamline cross-border trade and propel integration of the US 
and Mexican border state economies.  Medina outlined his vision 
for strengthening the state's export position via the 
construction of a regional logistics hub and inland port, with a 
dedicated rail link to Texas.  Medina further said the state had 
begun to gain back manufacturing jobs that it had lost during 
the earlier stages of the recession and was preparing to become 
a major medical tourism destination.  Separately, Governor 
Amalia Garcia (PRD) emphasized the ongoing highway projects 
undertaken during her administration which will link the state 
to key outside markets.  End summary. 
 
 
 
Innovative Solutions Key to Improving Bilateral Trade 
 
--------------------------------------------- -------- 
 
 
 
¶2.  (SBU)  At a November 10 breakfast, the Ambassador and newly 
installed Nuevo Leon Governor Rodrigo Medina assessed 
infrastructure constraints that resulted in customs delays and 
hindered business between the U.S. and Mexico.  They agreed that 
innovative and creative solutions would be the key to resolving 
these problems.  Improved infrastructure would strengthen both 
countries' competitive advantage in the hemisphere and 
internationally. 
 
 
 
Inland Ports Vital 
 
------------------ 
 
 
 
¶3.  (SBU)  Governor Medina briefed on the state's plans to 
establish an inland port in Sabinas-Hidalgo, Nuevo Leon, 
approximately 40 miles north of Monterrey and 70 miles south of 
the border, which would link Monterrey with Houston and Dallas, 
Texas.  Moving customs infrastructure away from the crowded 
border, the Ambassador responded, had the potential to reduce 
physical space constraints on the border and could help expand 
the capacity to undertake customs operations.  Medina stated 
that Nuevo Leon's concept envisioned the placement of U.S. CBP 
officials at the inland port in Sabinas-Hidalgo to pre-clear 
exports sent via train, truck or airplane to the U.S.  Such a 
program, he said, could help shippers avoid long delays at 
congested U.S. customs stations at the border - up to two days 
in some cases - that have hampered regional trade.  Medina 
estimated that around US$ 2.5 billion in total private and 
public investment would be available to fund the necessary 
infrastructure for the inland port.  He asked the Ambassador for 
assistance in pushing forward this project overall. 
 
 
 
The Stalled Colombia Rail Bridge Permit 
 
--------------------------------------- 
 
 
 
¶4.  (SBU)  Medina noted that in addition to the expansion of the 
current highway between Sabinas-Hidalgo and the border, which 
the Mexican federal government had already agreed to fund, an 
integral part of the overall inland port project was a proposed 
railroad crossing from Texas into Nuevo Leon's eight-mile 
stretch of the border.  He saw this bridge, connecting Webb 
County, Texas with Colombia, Nuevo Leon, as pivotal to Nuevo 
Leon's efforts to reinforce its position as a key regional 
logistics hub, and asked the Ambassador for help in obtaining 
USG approval of the rail link permit.  State Secretary of 
Economic Development Othon Ruiz anticipated that a 
public-private partnership (which would include the country's 
development bank NAFIN) would provide financing for the rail 
bridge.  However, he added, the GoM would not consider funding 
absent USG approval of the railroad permit. 
 
 
 
MONTERREY 00000445  002.2 OF 003 
 
 
 
Nuevo Laredo Dismissed as Alternative 
 
------------------------------------- 
 
 
 
¶5.  (SBU)  Ruiz said that an alternative rail route proposed by 
Kansas City Southern through Nuevo Laredo would add more 
congestion to an already busy crossing (where over 25 percent of 
Mexico's total international trade transits).  He opined that a 
new crossing at Colombia would reduce congestion in Nuevo Laredo 
and free up highways.  Another advantage, Ruiz said, is the 
small population in the Colombia area, which would result in 
less gridlock and improve trade at the country's 4th largest 
port where around 35 percent of Mexico's meat imports enter. 
(Note:  Kansas City Southern has the railway concession for the 
existing crossings in Laredo.  End note.) 
 
 
 
Economy a Priority 
 
------------------ 
 
 
 
¶6.  (SBU)  Medina explained that he has an ambitious economic 
development agenda, which included promoting the export of 
services.  Although he admitted that improving a "tense" 
security climate was important to improving economic prospects, 
he emphasized that the economic agenda was as important as the 
security agenda.  Underscoring the beginning of an economic 
recovery in the state, Medina said Nuevo Leon gained 8,000 jobs 
in October, mostly created by new investment from foreign owned 
manufacturing companies such as Whirlpool and Finlandia. 
 
 
 
Medical Tourism 
 
--------------- 
 
 
 
¶7.  (SBU)  Medina believed the state could take advantage of 
rising health costs and lack of insurance in the U.S. to become 
a major medical tourism destination.  To that end, the state is 
constructing five to six new (JACO certified) hospitals.  In 
order to move this project ahead, Medina called for Medicare 
reimbursements to Mexican hospitals, currently not allowed under 
U.S. guidelines.  Ambassador noted that President Obama had 
discussed this issue with President Calderon at their August 
meeting in Guadalajara, and both recognized that this issue 
would need to await passage of a U.S. health care bill. 
 
 
 
A Look at Zacatecas 
 
------------------- 
 
 
 
¶8.  (SBU)  During her meeting with the Ambassador, Governor 
Garcia characterized Zacatecas as a poor state with a limited 
manufacturing base.  As a result, under her administration, 
Zacatecas has sought to emphasis industries such as tourism and 
information technology.  She noted that, after nine months of 
lobbying, the state had just persuaded the U.N. to open one of 
its four cultural patrimony regional offices in the capital (the 
others will be in Bahrain, Chile, and Brazil).  In addition, the 
Governor declared that Zacatecas was one of five Mexican states 
which had registered employment increases during recent months, 
adding, however, that residents still felt the impact of the 
recession through price increases on staples such as 
electricity, gasoline, and food. 
 
 
 
¶9.  (SBU)  Garcia was especially proud of her record on highway 
infrastructure.  She stated that the federally-funded expansion 
of the previous two-lane highway (one lane in each direction) to 
Saltillo/Monterrey was nearly complete.  Meanwhile, 
equally-important projects included in-train linking of the 
Zacatecas capital to the nearby states of San Luis Potosi and 
Jalisco.  Finally, Garcia spoke at length on the state's 
 
MONTERREY 00000445  003.2 OF 003 
 
 
programs to attract remittances from the large Zacatecan 
diaspora living in the U.S.  Noting that more Zacatecans live 
outside the state than inside, she described the "3+1" program 
whereby the federal, state, and municipal governments match each 
dollar that Zacatecan community organizations in the U.S. send 
back for development projects.  Unfortunately, economic 
austerity will soon compel a suspension of this program, she 
stated. 
 
 
 
¶10.  (U) This cable has been cleared by the Ambassador. 
WILLIAMSONB