GOM SEEKS BROAD-RANGING REGULATORY

UNCLAS MEXICO 002308 SENSITIVE, SIPDIS STATE PASS USTR/MURPHY, MELLE, O'CONNOR NSC FOR RESTREPO/O'REILLY USDA FOR FFAS/MILLER, FAS FOR OA/MICHENER, STOLL, - ADAMS; OCRA/HIGGISTON, ZANIN; OSTA/HAMILTON; - ONA/RIEMENSCHNEIDER, GRUNENFELDER PASS APHIS FOR SMITH, FSIS FOR ALMANZA HHS FOR FDA COMMERCE FOR ITA/MAC/DAS/AC/SKIP JONES AND - ITA/MAC/DAS/WH/WALTER BASTIAN E.O. 12958: N/A TAGS: EAGR ETRD NAFTA PREL MX SUBJECT: GOM SEEKS BROAD-RANGING REGULATORY HARMONIZATION SENSITIVE BUT UNCLASSIFIED ¶1. (SBU) SUMMARY: Mexico's Secretariat of the Economy (SE) seeks broad-ranging harmonization of regulations affecting international trade in North America. SE envisions a decades-long effort involving Mexico, Canada and the United States similar to the decades-long regulatory harmonization work in Europe that culminated in creation of the European Union's free trade zone. Addees should expect this issue to be raised at the upcoming Guadalajara North American Leaders' Summit (NALS) END SUMMARY. -------------- FIRST EFFORT -------------- ¶2. (SBU) SE Under Secretary for International Trade Negotiations Beatriz Leycegui advised the Embassy on August 4 that the draft trilateral Memorandum of Understanding on Regulatory Cooperation Issues floated to USTR and Commerce last week is a first stab at bringing to life a topic raised during the initial meeting between President Felipe Calderon and then-POTUS-elect Obama. It was, she noted, also on the agenda of the February and April bilateral summits. She added that Mexican veterinary, phytosanitary, and health authorities (SENASICA and COFEPRIS) were heavily involved in the drafting. ¶3. (SBU) Leycegui underscored that this is an initial draft document and is subject to further revision as the process moves forward, assuming Canada and the United States are interested. She added that sanitary and phytosanitary (SPS) issues could be carved out into a separate MOU. However, Mexico would prefer a general MOU on regulatory issues that includes SPS- as well as other TBT-related issues. -------------- SUSTAINED EFFORT FORESEEN -------------- ¶4. (SBU) Leycegui stated that the intent is to create a structure and boundaries for progress over the coming decades in harmonizing regulations that affect international trade. Knowing that the United States and Canada are averse to binding commitments in such a document, Leycegui said, Mexico seeks to identify priorities and perhaps 3 or 4 major projects to which we can jointly commit to work over a defined timeframe. Perhaps, she said, we will find that we cannot make progress on some of them, but we need to find those areas where we can agree and to move forward on them. The only binding commitment Mexico hopes for is a clear agreement on the issues that need to be worked. -------------- WHERE POSSIBLE, USE EXISTING STRUCTURES -------------- ¶5. (SBU) Leycegui noted that harmonization structures already exist but are in many cases dormant. She suggested that the NAFTA Free Trade Commission and its existing working groups could be revived, adding that it would be important in each country to identify a central point of contact responsible for coordinating the work. We can recognize the existing framework, she said, use it, then identify priorities and get to work. Mexican officials are willing to spend as much time in Washington as may be necessary to make progress. -------------- OPEN TO NEW IDEAS -------------- ¶6. (SBU) Leycegui said Mexico is open to new ideas, and posited as one example the U.S. tendency to include private-sector interests in the formulation of such policies. We could start, she suggested, with the work already done by the USA Poultry and Egg Export Council and its Mexican counterpart, Union Nacional de Avicultores, and incorporate it into the annexes to the MOU. NOTE: Leycegui as an attorney in private practice worked closely with USAPEEC and UNA and thus is well acquainted with this model. END NOTE. -------------- NEXT STEP -------------- ¶7. (SBU) The next step, Leycegui said, is to seek trilateral commitment to the concept of regulatory cooperation at the upcoming summit in Guadalajara. -------------- COMMENTS -------------- ¶8. (SBU) The GOM, and specifically SE, have made clear to us on multiple occasions that they believe economic integration of post-NAFTA North America will proceed regardless of what the national governments do. The question to them is whether we will have the foresight and political will to shape the ongoing integration in a way that is most positive for all concerned. This sweeping and ambitious proposal for broad-gauge regulatory cooperation and, ultimately, harmonization on the scale of the European Union's falls squarely into that philosophy of seeking to shape events. ¶9. (SBU) Rarely is a tree felled with a single stroke of the axe, and the Mexicans realize that the tree of regulatory harmonization could only be felled with a decades-long succession of many, many cuts. The GOM realizes just how ambitious its proposal is, but appears willing to start expending the effort, aware that the effort will have to be sustained over many years. FEELEY