MEXICO PLEASED WITH IMPROVED RELATIONS WITH CUBA

C O N F I D E N T I A L MEXICO 000814 SIPDIS E.O. 12958: DECL: 09/18/2028 TAGS: PREL PHUM KCRM PREF SMIG ETRD CU MX SUBJECT: MEXICO PLEASED WITH IMPROVED RELATIONS WITH CUBA Classified By: Political Minister Counselor Charles V. Barclay. Reason : 1.4 (b),(d). ¶1. (SBU) Summary. Mexico is pleased with Cuban cooperation in keeping with the Migration MOU signed last November that so far has reportedly contributed to the repatriation of over 100 Cubans. On the commercial front, Mexican exports rose by approximately 80 percent in 2008. Given lingering concerns over Cuba's outstanding debt to Mexico's government-owned Bancomext, Mexico has yet to reopen a line of credit for Cuban importers. President Calderon is looking at a possible visit to Cuba in the second half of April at which point he could announce Mexico's willingness to reextend Cuba credit for the purchase of Mexican products. Mexico remains very much interested in any changes in U.S. policy towards Cuba particularly as relates to the embargo. End Summary. Migration MOU Producing Results ¶2. (SBU) According to the Foreign Ministry's (SRE) Director General for South America, Victor Arriaga, Mexico is pleased with Cuba's cooperation with the terms of the Migration MOU signed last November. Arriaga maintained that Cuba had agreed to repatriate since late 2008 107 illegal Cubans detained in Mexico. He noted that over 40 percent of the Cubans repatriated had entered Mexico through Central America. In the past, Cuba had systematically refused to repatriate Cubans that had entered Mexico through a third country; instead, it would only agree to take back those who had entered Mexico directly over water. Arriaga told poloff that he was not aware of any instance in which Cuba had refused to repatriate its citizens in keeping with its MOU with Mexico. ¶3. (SBU) Arriaga noted that the Mexican Navy had assisted in transporting 75 of the illegal Cubans in two groups by ship. The trips had gone off without a hitch but had been arranged on an ad hoc case by case basis. He maintained that Mexico and Cuba were working on an agreement that would establish a more formal framework between the two countries' navies to transport repatriated Cubans back to Cuba by ship in the future. Separately, Mexico sent back the remaining 35 illegal Cubans in much more smaller numbers on a handful of commercial flights as opposed to Mexican government aircraft which had been the rule prior. ¶4. (SBU) Arriaga reported that the number of Cubans detained by Mexican authorities had declined significantly over recent months. He attributed that development in large measure to a reluctance of smugglers to traffic Cubans through Mexico to the U.S. in the wake of the Mexico-Cuba migration MOU. This trend appears to be borne by U.S. statistics which indicate that the number of Cubans requesting asylum at our southern border are down significantly. Mexican Exports Rising but Credit Still an Issue ¶5. (SBU) Beyond the symbolic import, Mexico's decision to normalize relations with Cuba has also largely been driven by a desire to expand commercial trade with and investment in Cuba. Arriaga told poloff that Mexican exports to Cuban had grown by over 80 percent in 2008 compared with 2007. Much of its exports fell into the category of industrial products with mid-size Mexican producers proving the most serious players. Meanwhile Mexico was working on an agreement relating to agricultural products that presumably would support greater commercial flows. ¶6. (SBU) The lack of a line of credit remains a problem for Cuban importers short on cash. The Bank of Cuba still owes Mexico's government owned Bancomext some $500 million prompting Mexican reluctance about extending new loans to Cuba. Arriaga averred, however, that political factors can weigh heavily into such decisions and that it was not inconceivable that the Mexican might shortly agree to reextend Cuba the line of credit it needs to purchase more Mexican exports. Calderon Looking at Possible Trip to Cuba in April ¶7. (SBU) When former Cuban Foreign Minister Perez Roque visited Mexico in November he extended President Calderon an invitation to visit Cuba. Calderon accepted the invitation but no specific date was set for the meeting. Arriaga told poloff that Calderon was presently looking at visiting Cuba in the second half of April sometime after the visit of President Obama and the Summit of the Americas in mid-April. He spoke to no specific agenda but not remarked that Mexico is working with Cuba to reactivate the functioning of some 12 consultative mechanisms that had suffered for lack of use over much of the last decade. He hinted Mexico could make an announcement on credit to Cuba possibly in connection to the visit. He expected Calderon to offer Raul Castro an invitation to visit to Mexico when he goes to Cuba. Looking for a Change in the U.S. Approach on Cuba ¶8. (SBU) Arriaga made it clear that Mexico is following closely U.S. actions on Cuba. He was aware that the U.S. Congress had recently eased restrictions on travel and remittances to Cuba. He also noted that Senator Richard Lugar had recommended an overhaul of U.S. policy toward Cuba. Arriaga wondered aloud whether the Obama administration was looking at lifting the U.S. embargo on Cuba, describing the rest of Latin America as unanimous in rejecting this "failed" approach to Cuba. He noted "signals" from Raul Castro that Cuba was prepared to enter into meaningful dialogue with the U.S. and presumably make significant compromises in exchange for a lifting of the embargo. He thought the upcoming Summit of the Americas offered a good venue for the new administration to articulate a new approach toward Cuba. ¶9. (C) Comment. Mexico appears satisfied with Cuba's compliance to date with the terms of its migration MOU including its agreement to repatriate illegal Cubans who have entered Mexico through Central America -- a first for Cuba. Mexico wants to continue to expand trade with Cuba; political considerations are playing into a potential decision to extend a new line of credit to Cuba notwithstanding Cuba's outstanding debt to Mexico. Calderon's potential visit to Cuba in April should cement the normalization process. It remains to be seen how seriously Mexico will address human rights issues given the primacy it places on priorities such as trade and greater cooperation on crime and migration. 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