SCENESETTER FOR UNDER SECRETARY KAREN HUGHES TRIP

UNCLAS SECTION 01 OF 02 MEXICO 000571

SIPDIS

SIPDIS

FOR WHA/MEX; WHA/PPD; R

E.O. 12958: N/A
TAGS: PREL PGOV KJUS MX
SUBJECT: SCENESETTER FOR UNDER SECRETARY KAREN HUGHES TRIP
TO MEXICO, FEBRUARY 12-15, 2007


1. Summary: Welcome to Mexico. Your visit comes at an
important time, with the Calderon administration in only its
third month in office. Notwithstanding the polarized
political climate in Mexico, President Felipe Calderon is off
to a strong start, demonstrating leadership at home and
abroad in a manner much appreciated by Mexican citizens, and
showing himself eager to build on an already strong U.S. -
Mexico relationship. Facing significant domestic challenges
in pursuing his security, economic and social agendas,
however, Calderon must also chip away at the historic Mexican
ambivalence toward the U.S. that has slowed progress on many
common fronts. Your visit will be a high profile event here;
you can advance bilateral relations by reinforcing in the
public mind the image of the U.S. as a worthy, credible
partner that is attentive to Mexico's interest and concerns.
End Summary.


2. No two countries on earth share a more profound bilateral
relationship than the United States and Mexico. We are tied
together by history, geography, economics and personal
relationships . We form the second largest trading
partnership in the world, doing close to half a trillion
dollars in business in 2006. We are bound by family ties as
a result of vast migration flows north. Even our problems
increasingly bring us together: transnational crime and
violence have engendered a common sense of menace as both
Mexicans and Americans come to realize the corrosive and
lethal effects of the trade in illegal drugs.


3. As Americans in the NAFTA era slowly adapt their view of
Mexico as an unknown and dangerous territory, for their part,
Mexicans continue to look at the U.S. with a traditional
mixture of admiration and suspicion. Polls repeatedly
demonstrate that the Mexican public generally admires the
United States, its relative economic stability and high
standard of living, the sense of fair play that underpins its
legal and economic systems and the opportunity it provides to
citizens and immigrants alike. Surveys also show that,
paradoxically, Mexicans are also uncomfortable with the
U.S.'s large cultural footprint here, fear the potential for
domination and believe that we treat their countrymen in the
United States poorly. These negative trends have been
reinforced in recent months by the public debate in the
United States over immigration and particularly by the
decision to erect a 700 mile security fence along the
southern U.S. border, which sparked strong public opposition.


4. Unfortunately, such ambivalence also has been reinforced
by Mexico's governing elites and opinion leaders keen to
demonstrate their independence from the United States even as
economic and law enforcement cooperation has grown in recent
years. Rather than help lead public opinion in a direction
that appropriately reflects the positive character of the
bilateral relationship, Mexican leaders have all too often
pandered to the sensitivities engendered by its most
troublesome aspects.


5. The good news is that President Calderon seems set to
break free of this mold. In his first weeks in office, he
has seized the initiative on several important issues,
particularly on the law enforcement front, demonstrating his
intent to forge an activist presidency. He has also
demonstrated pragmatism and maturity in his posture toward
the United States. His message to us, to his countrymen and
to the world is that Mexico will get what it needs from us on
the basis of equality and the close cooperation expected of
neighbors who share a common border, as well as common
problems.


6. Calderon has demonstrated particular acumen on the issue
of migration. President Fox led with his chin, raised
expectations domestically and indirectly contributed to a
sense of bitterness here that a bilateral accord could not be
reached on his watch. His successor has deliberately
downplayed migration's importance in the bilateral
relationship. Although he strongly criticized the border
security fence late last year, Calderon recognizes that
immigration reform is a U.S. domestic matter largely out of
his hands and has chosen to focus his public remarks on the
need to spur economic growth in Mexico as one way to confront
illegal migration to the U.S.


7. This issue is likely to come up frequently during your
visit here. You should acknowledge the controversy the
border fence has provoked in Mexico while emphasizing that
the initiative is just one element of a comprehensive package
of border security measures and other reforms to which
President Bush remains committed. You can also recognize the
contributions Mexicans make to the economies of both our
countries.

MEXICO 00000571 002 OF 002




8. How Calderon frames his expectations of the U.S. marks an
even more positive change. For example, he offers a frank
assessment of the scope of the illegal narcotics problem in
Mexico, calmly argues that the U.S., as the principal market
for the drugs transiting or originating in Mexico, is jointly
responsible for it, but freely acknowledges that Mexico
cannot confront it without our help and cooperation. He is
equally frank about his desire to see expanded assistance and
cooperation (although his government has yet to detail what
it is seeking). Such positive spin builds on former
president Fox's efforts to expand cooperation and moves us
further away from the often bitter bilateral blame-seeking
that characterized the issue during previous administrations.



9. Calderon's deeds in this area say even more. Major
counter-narcotics thrusts into narco-transit zones in
Michoacan, Guerrero, Baja California and other states have
met with general public approval. So too did the January 19
extraditions to the U.S. of 15 major criminals. While he
bore some criticism, Calderon's move did not spark a major
public debate; most accepted the extraditions as necessary.
Calderon correctly sized up the Mexican public's acceptance
of closer, more dynamic cooperation with the U.S. in an area
of fundamental importance and was willing to lead rather than
follow public opinion. Such bold initiative merits our
support, which you can reinforce through your public remarks
here.


10. Aside from law enforcment issues, President Calderon
faces a set of equally serious challenges in the economy,
which also impact on the bilateral relationship. He
inherited a stable, growing economy that is becoming tightly
linked our own as Mexico's exports to the U.S. continue to
grow. To ensure Mexico's ability to compete in a globalized
market, particularly in the face of increased competition
from Asia, however, Calderon will need to tackle a series of
essential structural reforms in the energy sector, in
finance, health and transportation and other key areas. A key
test for Calderon is whether he will be able to build the
political consensus to tackle the structural changes Mexico
needs. Many of his early initiatives will be focused on
addressing Mexico's core social problems of poverty and
inequality, while seeking to improve Mexico's competitiveness
through improvements in education and infrastructure.


11. In meetings with Embassy officials, Calderon's cabinet
has expressed its willingness to work closely with the United
States to encourage greater competition in the domestic
market and to address bilateral economic issues under the
auspices of the Security and Prosperity Initiative. Many in
Mexico remain deeply suspicious of the reform agenda,
however, and the U.S. role in setting it. Getting the optics
of reform right in a divided society may prove to be an even
more difficult undertaking than tackling crime and the new
administration needs our help. We need to recognize the need
to balance efforts to alleviate poverty with what are likely
to be painful structural reforms.


12. Your visit takes you to a wide range of cultural,
educational and economic venues. Your interest in reaching
out to all of Mexico - including constituencies among
indigenous and underclass Mexicans that President Calderon
himself seeks to engage - is the mark of the respect and
concern that Mexicans desire of their closest neighbor.


13. Calderon has a bold reform agenda intended to modernize
the Mexican state and enhance Mexico's economic
competitiveness. It is very much in our interest that he
succeeds. Your visit helps us reach out to the hand Calderon
has extended to the United States in the weeks since his
inauguration; it will highlight our support for an important
partner at a key juncture. If there is anything I or my
staff can do to make your trip to Mexico more productive and
rewarding, do not hesitate to let me know.


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