OBAMA-CALDERON MEETING RAISES EVENTUAL POSSIBILITY

UNCLAS SECTION 01 OF 02 MEXICO 000288 SIPDIS STATE FOR DRL/AWH AND ILSCR, OES, EEB AND WHA/MEX - WOLFSON, USDOL FOR ILABE E.O. 12958: N/A TAGS: ELAB SENV PGOV PINR CEC KSTT MX SUBJECT: OBAMA-CALDERON MEETING RAISES EVENTUAL POSSIBILITY OF IMPROVING NAFTA SIDE AGREEMENTS REF: MEXICO 0131 ¶1. Summary: As noted in reftel, the January 12 meeting between then President-elect Obama and Mexican President Felipe Calderon generated extensive coverage and commentary in Mexico,s national media. A significant portion of this media coverage focused on NAFTA and President Calderon,s opposition to a wholesale renegotiation of the free trade agreement. This opposition notwithstanding, President Calderon has publicly expressed a willingness to build on NAFTA,s accomplishments by strengthening the side accords connected to the free trade agreement in the areas of labor and environmental standards. The only one of Mexico,s major national labor organizations to react publicly to Calderon,s comments did so in a positive fashion. While it is undoubtedly encouraging that the GOM is prepared to discuss the labor standards associated with NAFTA, the politics surrounding Mexico,s 2009 mid-term congressional elections may prevent any serious action on the matter until at least September of this year. End Summary PRESS COVERAGE OF OBAMA ) CALDERON MEETING -------------- ¶2. The January 12 meeting between then President-elect Obama and Mexican President Felipe Calderon generated extensive coverage and commentary in the country,s national media (reftel). One of the main points stressed in the reporting on the meeting was President Calderon,s strong opposition to a renegotiation of NAFTA. Calderon was repeatedly quoted as saying that the topic of renegotiating the free trade agreement (FTA) did not specifically come up during the meeting because then President-elect Obama was well aware of Mexico position on re-opening NAFTA. However, during interviews following the meeting President Calderon did express his government,s willingness to build on the accomplishments of NAFTA by focusing on those areas that were clearly of interest to both countries. ¶3. The Mexican President was quoted as specifically citing labor and environmental issues as areas of mutual interest. In elaborating on his openness to the idea of revising those aspects of the FTA that reflects the values of both countries, President Calderon made reference to the NAFTA side agreements on labor and the environment. Many of the media reports covering the Obama/Calderon meeting touched on the idea of the NAFTA countries participating in some form of consultative group as a possible forum for revising the labor elements connected to the FTA. ¶4. Mexico,s Official Presidential website cited President Calderon describing to the press his concurring with President Obama on the need for our countries to lead together on environmental issues, one from among the developing and the other from among the developed. President Calderon told President Obama about Mexico,s environmental agenda and he described to the press how Obama had already been informed about these issues and had then congratulated Mexico on the steps it had taken and its decision to continue on this positive path. NAFTA,S LABOR SIDE AGREEMENT -------------- ¶5. In its reporting on the Obama/Calderon meeting the newspaper Reforma, one of Mexico,s largest national dailies, included a brief discussion and analysis of the NAFTA side agreement on labor. Specifically citing the accord by name, the North American Agreement on Labor Cooperation (NAALC), Reforma,s comments indicated that the agreement was not particularly effective. It characterized the NAALC as an instrument more designed for investigation as opposed to being a mechanism for taking direct action. The newspaper went on to state that it knew of no sanctions imposed under the NAALC since it was signed in 1993. This assessment was also shared by the one labor organization to publicly react to the President Calderon,s comments (see para 7 below) as well as by the Authentic Labor Front (FAT) a left leaning MEXICO 00000288 002 OF 002 labor federation with ties to Mexico,s main opposition party, the Center for Worker Support (CAT) a labor rights advocacy NGO based in the central Mexican state of Puebla and by the AFL-CIO office in Mexico. NAFTA,S ENVIRONMENT SIDE AGREEMENTS -------------- ¶6. The Commission for Environmental Cooperation (CEC) was established by Canada, Mexico and the United States in 1994 to address trans-boundary environmental concerns in North America. While the decision to create such a commission originated during the negotiations of the NAFTA, it derives its formal mandate from the North American Agreement for Environmental Cooperation (NAAEC). The NAAEC builds upon, complements and supports the environmental provisions established in NAFTA. It creates a North American framework whereby trade and environment related goals can be pursued in an open and cooperative way. The agreement helps prevent trade distortions or new trade barriers between the NAFTA partners. LABOR SUPPORT FOR REVISING LABOR SIDE AGREEMENT -------------- -- ¶7. Only one of Mexico,s major national labor organizations reacted publicly to Calderon,s comment on strengthening the NAFTA labor side agreement. The National Workers Union (UNT) is Mexico,s second largest national level labor federation with close ties to the country,s main opposition political party, the Party of the Democratic Revolution (PRD). The UNT was essentially positive; according to leader, Francisco Hernandez Juarez, the procedures mandated by the labor side agreement for investigating a worker,s complaint regarding their labor rights were &bureaucratic and terribly slow.8 Moreover, he said, even when a complaint of labor rights violations is resolved in favor of a worker the NAFTA labor side agreement does not obligate either a government or a business to take any corrective action. FACTORS THAT MAY DELAY REVISING THE AGREEMENTS -------------- - ¶8. Although President Calderon has indicated his willingness to review the NAFTA labor side agreement, internal domestic factors may delay any quick action on the matter. At present, Calderon,s party, the National Action Party (PAN), commands a plurality in both houses of the Mexican Congress. However, in July 2009, Mexico will hold mid-term congressional elections for the House of Deputies. At this time, most polls indicate Mexico,s former ruling party, the Institutional Revolutionary Party (PRI),will gain seats at the PAN,s expense and become the leading party in this house. ¶9. We expect the Calderon administration will be focused primarily on the upcoming elections over the next six months. Once the mid-term elections are over, even assuming the PAN retains its plurality, the new congress will not convene formally until September at which point the Calderon administration would commence consultation with the new congress. Consequently, it does not appear that any serious discussion of revising the NAALC will be possible prior to September 2009. COMMENT -------------- ¶10. Events in Mexico may well prevent detailed discussions on revising the NAFTA labor side agreement in the immediate future. Nevertheless, the fact that the GOM is willingly to talk about improving labor (and environmental) standards creates an opening for possible constructive dialogue. Visit Mexico City's Classified Web Site at http://www.state.sgov.gov/p/wha/mexicocity and the North American Partnership Blog at http://www.intelink.gov/communities/state/nap / BASSETT