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06MEXICO3378 2006-06-19 23:27:00 CONFIDENTIAL//NOFORN Embassy Mexico
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1. (C) Summary: In the wake of A/S Shannon's visit to Asia
post met separately with Japanese and Chinese embassy and
Foreign Ministry (SRE) officials, all of whom welcomed
increased consultation with the U.S. on Mexico's relations
with Asia. Japanese diplomat Noriteru Fukushima echoed Tokyo
officials' (ref B) satisfaction with the Free Trade Agreement
but noted a similar agreement with Korea was pending.
Embassy of China Political Counselor Shen Zhilang commented
on the rapidly expanding exchange of visits between Mexico
and China, but acknowledged the China-Mexico BiNational
Commission meeting held in May had been long on agreements
and short on real programs. SRE Director General for Asia
Julian Ventura explained that Mexico's relationship with
Japan is built on long-standing ties and complementary
markets. With China, he acknowledged, there was greater
suspicion and greater opportunity. In the next ten years
Mexico would seek to maximize cultural and economic exchanges
with both (and Korea), but was already looking to SE Asia as
the area of future growth. He lamented that the Mexican
Congress was reluctant to support an invigorated opening to
Asia, but said institutionalized consultations in the G-8
Plus Five and APEC were valuable and likely to continue. End

At Ease with Japan

2. (SBU) Japanese Political Counselor Noriteru Fukushima was
aware of A/S Shannon's successful visit to Tokyo and welcomed
greater embassy-to-embassy communication in Mexico City. He
described a productive, collaborative relationship with
Mexico fueled by the success of the free trade agreement,
which he claimed had increased trade between the two
countries by 40 percent (SRE documents cite 30 percent). The
boom was likely only to last a few years, he said, as Mexico
was negotiating a free trade agreement with Korea (unlikely
to be signed this year however) which would eat into Japanese
market share. China's interest in trade with Mexico would
also edge out the Japanese, he predicted. Fukushima noted
that Japanese concerns about security issues, especially in
Mexico City, had eased considerably over the last year as the
result of a dialogue with Mexican officials which resulted in
better security at the airport, a venue where Japanese
businessmen had been particularly targeted. Japanese
officials met regularly with GOM counterparts to discuss the
investment climate and generally found a responsive audience.
SRE DG Ventura noted that the trade and political
relationship with Japan was built on complementary markets
and confidence. Mexico was exporting agricultural products
to Japan with good success. The two countries were also
cooperating on jointly-administered assistance projects to
the Caribbean and Central America, with Japan providing much
of the finance and Mexico the technical expertise. Fukushima
noted the successful visit of Prince Naruhito last March as
emblematic of the good relations between the countries.

Cautious with China

3. (C) Chinese Political counselor Shen Zhiliang opened by
citing the large number of government visitors from China to
Mexico over the five months he has been here -- over 80, not
counting the May 2006 Binational Commission meeting which
brought a delegation of close to 100 Chinese government and
business leaders to Mexico City. While this second biannual
BNC included agreements on energy, education, transportation,
infrastructure and technology, Zhiliang noted that there was
more good intent than concrete action behind the agreements.
Tourism was likely to be the sector of greatest opportunity
he said, with China looking into direct flights from Mexico,
and Mexico opening a tourist information office in Beijing.
The two countries agreed on a five year plan, and to meet
again in Beijing in 2008. While China was interested in
investing in the energy sector, Zhiliang noted, for the time
being there was little opportunity to do so. He described
Chinese investment in Mexico as very small. China was
interested in the North American market primarily, and in
Mexico as an entryway. SRE official Ventura confirmed that
Mexico traditionally views China with some suspicion although
an active Mexican visitors program with China over the past
decades has paid off, and every major political player in
China has visited Mexico in the last three years. China was
more interested in exploitative industries, and Mexico was
wary of dealing with the Chinese on those terms. China and

MEXICO 00003378 002 OF 002

Mexico do have profitable political consultations in the
context of the G-8 Plus Five, in APEC and in annual
multilateral consultations in Geneva and New York. Ventura
felt that one of the successes of the bilateral relationship
was China's agreement this year to feature Mexican performers
and works in the many state-sponsored cultural festivals
taking place in 2006 throughout China.

4. (SBU) Ventura noted that relations with Korea were also
well-established, but Korea faced an uphill marketing battle
in Mexico, which tended to view Korean products with
suspicion. Korean President Roh Moo-Hyun visited Mexico in
September 2005 celebrating the centenary of the first Korean
migration to Mexico. Mexico and Korea were at the early
stages of discussing a free trade agreement, and a round of
talks is scheduled for later this month. From SRE's
perspective, Ventura added, the benefits of the Japanese and
eventual Korean FTAs were finite and would decrease
geometrically as China played a more important role in the
North American market. He was already looking to South-East
Asia as a target for Mexican commerce.

Suspicious of Lopez Obrador

5. (C) Both Japanese official Fukushima and Chinese official
Zhiliang separately and spontaneously expressed concern over
presidential candidate Andres Manuel Lopez Obrador, noting he
prided himself on his lack of global experience and interest.
Zhiliang noted the Chinese ambassador had tried several
times to get a meeting with the leftist candidate, but had
never even received a reply. Both expressed the hope that
Mexico would continue to look outwards if Lopez Obrador did
win the July 2 election -- but their voices betrayed a
certain amount of doubt. Ventura, for his part, lamented
that the Mexican congress was suspicious of SRE efforts to
engage more in Asia, and reluctant to support those efforts
with appropriate budgets.

6. (SBU) Comment: All three officials were aware of A/S
Shannon's trip to Asia and welcomed the chance to compare
notes on a local basis more regularly. The Japanese were
even open to meetings including the other Asian embassies,
the Chinese were more reserved.

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