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