1. (SBU) Summary: A subdued Geronimo Gutierrez used his
October 2 meeting with A/S Shannon to voice Mexico's deep
frustration with last week's Senate vote to fund a border
fence, saying it was a "bitter pill" at a bad time that would
complicate bilateral relations. Nevertheless, Gutierrez was
hopeful that senior level contacts would continue and help
move the relationship forward. SRE's Undersecretary for
North America took the opportunity to thank A/S Shannon for
the scheduled November 9 meeting between president-elect
Calderon and President Bush, and briefly touched on pending
IO issues, such as the upcoming vote for the GRULAC UNSC
seat. End Summary



2. (SBU) Gutierrez began by thanking A/S Shannon for his
early a.m. Televisa interview, which was focused in part on
the Senate vote and Mexican reaction. He said that Shannon's
comments, which placed the vote in the context of a national
debate on immigration and emphasized president Bush's ongoing
commitment to a broader immigration reform, might help defuse
some of the anger felt in Mexico at the congressional
decision to go forward with construction. Nevertheless, he
said, last week's vote was a bitter pill for Mexican's to
swallow that complicated the relationship. His biggest
worry, he stated, was that during a critical period, the
fence would box in transition leaders and make it more
difficult for them to take decisions that would move Mexico
closer to the United States on a range of issues. Foreign
affairs decisions, he noted, always involved heavy
expenditures of political capital in Mexico. Calderon would
now be paying double. He hoped that A/S Shannon was correct
in that the fence was not the last chapter in the immigration
story.



3. (SBU) A/S Shannon assured Gutierrez that the
administration remained committed to broader immigration
reform. Given the debate in the U.S. about border security,
many in Congress felt the need to act on getting a fence in
place in the short-term. The president maintains a more
far-sighted regard for the need for broader reform, however.



4. (SBU) By way of offering local context in which the
Senate vote was taken, Gutierrez outlined the domestic
challenges both the current administration and
president-elect Calderon face. (Embassy comment: Gutierrez
painted a far more pessimistic picture than Calderon's own
advisors provided Shannon in a meeting just prior to his
visit to SRE, noted in SEPTEL End comment) He provide a
brief, and by-now familiar sketch of Mexico's post-electoral
scene and underscored the particular difficulties the current
Oaxaca-related unrest present the Fox administration. He
noted also that Calderon's transition team was taking great
pains to avoid moves that might radicalize government
opponents, but that the president-elect will face difficult
challenges early on in his administration.



5. (SBU) Elevating his gaze beyond the fence and the
difficulties it poses for Mexico, Gutierrez looked toward the
schedule of high-level meetings slated for this fall. He
thanked A/S Shannon in particular for the November 9 meeting
offered by the White House to president-elect Calderon.
This was an important opportunity that both sides needed to
take maximum advantage of; SRE will be coordinating closely
with Calderon's transition team and the USG in order to shape
it. Both sides agreed that such high-level encounters remain
key to the relationship. Shannon noted the recent North
American Forum in this regard and that said such encounters
should be backed up by good public diplomacy. Gutierrez said
they help educate elites and public about what closer
bilateral engagement can offer -- and that it does not
represent an erosion of Mexican sovereignty. Mexican elites
are broadening their vision of foreign policy and national
security engagement, but there needs to be more work done to
shore up public support.



6. (SBU) A/S Shannon raised the upcoming UNSC vote with
Gutierrez, noting that he had had a good meeting in New York
with SRE's Undersecretary for Latin American, Jorge Chen.
While Chen remains worried about Venezuela's prospects for
gaining a seat on the security council, Shannon noted that
the U.S. believed Chavez has not marshaled sufficient votes
for a first round win, and that his inflammatory UN speech
had probably cost him support. He urged Mexico to continue to
work hard on Guatemala's behalf. Gutierrez reaffirmed
Mexico's support for Guatemala's candidacy. Venezuela's
presence on the Security Council, he said, would undermine

MEXICO 00005698 002 OF 002


both the U.N. and the GRULAC.



7. (SBU) At the meeting's close, SRE officials reminded A/S
Shannon of the November election for the World Health
Organization's Director Generalship and repeated Mexico's
request for USG support for the candidacy of Public Health
Secretary Julio Frenk.

SIPDIS



8. (SBU) Assistant Secretary Shannon has cleared this
message.





Visit Mexico City's Classified Web Site at
http://www.state.sgov.gov/p/wha/mexicocity

GARZA