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FM AMEMBASSY MEXICO
TO RUEHC/SECSTATE WASHDC IMMEDIATE 0131
INFO ALL US CONSULATES IN MEXICO COLLECTIVE
WHA CENTRAL AMERICAN COLLECTIVE
RHEHAAA/NATIONAL SECURITY COUNCIL WASHINGTON DC
RHMFIUU/CDR USNORTHCOM PETERSON AFB CO
RHMFIUU/CDR USSOUTHCOM MIAMI FL
RHMFIUU/DEPT OF HOMELAND SECURITY WASHINGTON DC
RHMFIUU/DEPT OF JUSTICE WASHINGTON DC
RUCPDOC/DEPT OF COMMERCE WASHINGTON DC
RUEABND/DEA HQS WASHINGTON DC
RUEKJCS/SECDEF WASHINGTON DC

244771
2010-01-21 21:42:00
10MEXICO202
Embassy Mexico
UNCLASSIFIED//FOR OFFICIAL USE ONLY

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OO RUEHCD RUEHHO RUEHMC RUEHNG RUEHNL RUEHRD RUEHRS RUEHTM
DE RUEHME #0202/01 0212143
ZNR UUUUU ZZH
O R 212142Z JAN 10
FM AMEMBASSY MEXICO
TO RUEHC/SECSTATE WASHDC IMMEDIATE 0131
INFO ALL US CONSULATES IN MEXICO COLLECTIVE
WHA CENTRAL AMERICAN COLLECTIVE
RHEHAAA/NATIONAL SECURITY COUNCIL WASHINGTON DC
RHMFIUU/CDR USNORTHCOM PETERSON AFB CO
RHMFIUU/CDR USSOUTHCOM MIAMI FL
RHMFIUU/DEPT OF HOMELAND SECURITY WASHINGTON DC
RHMFIUU/DEPT OF JUSTICE WASHINGTON DC
RUCPDOC/DEPT OF COMMERCE WASHINGTON DC
RUEABND/DEA HQS WASHINGTON DC
RUEKJCS/SECDEF WASHINGTON DC

UNCLAS SECTION 01 OF 05 MEXICO 000202 
 
SENSITIVE 
SIPDIS 
AMBASSADOR FOR THE SECRETARY 
SENIOR ADVISOR ALEC ROSS 
WHA A/S VALENZUELA AND DAS JACOBSON 
AID ADMINISTRATOR SHAH 
NSC RESTREPO AND BRENNAN 
DOD/OSD STOCKTON 
NORTHCOM CDR GENERAL RENUART 
DHS ICE ASST SEC MORTON AND ASST SEC BERSIN 
DEA A/ADMINISTRATOR LEONHART 
DOJ ASSISTANT ATTY GEN BREUER 
COMMERCE ITA U/S SANCHEZ 
 
E.O. 12958: N/A 
TAGS: PGOV PREL MASS ECON SNAR PHUM MX
SUBJECT: U.S.-Mexico Relations: Progress in 2009, Challenges in 2010 
 
¶1. (SBU) Summary:  The U.S.-Mexican bilateral relationship has 
never been stronger.  We ended 2009 with an unprecedented 
commitment from the Mexican government to work closely with us on 
an ambitious effort to move beyond a singular focus on high value 
targets and address some of the institutional and socio-economic 
constraints that threaten to undermine our efforts to combat the 
cartels.  A truly joint effort to implement a new U.S.-Mexico 
strategy is yielding stronger organizational structures on both 
sides and a deeper understanding of the threat posed by the drug 
trafficking organizations.  In the coming year, we will help Mexico 
institutionalize civilian law enforcement capabilities and phase 
down the military from street patrols, for which it has neither 
legal authority nor training.  A new dialogue on human rights with 
the Mexican government and a defense bilateral working group will 
reinforce that effort and help modernize the military. 
 
¶2. (SBU) As we institutionalize the security agenda we will also 
need to give more attention to the economic and social agendas. 
Efforts to strengthen mutually beneficial competitiveness in 2010 
will focus on identifying new cross border production 
opportunities, spurring innovation, building a modern 21st century 
border, and supporting an energy and environment agenda that is a 
top priority for the Calderon administration and offers huge 
potential for future investment and economic development.  Our 
economic recovery and Mexico's go hand in hand, and U.S. export-led 
successes are depending increasingly on partnering with Mexico's 
manufacturing capability.  At the same time, we will have to 
resolve the lingering trucking dispute and other trade irritants 
while using carefully targeted and limited assistance to spur 
additional spending on poverty alleviation by the Mexican 
government, the IDB and the World Bank.  End Summary 
 
Some Operational Success 
 
¶3. (SBU) Several successful operations by the Mexican government 
against well known drug lords over the last month reflect both the 
progress we are making in strengthening our bilateral relationship 
and the challenges we face to expand those gains in 2010.  The 
Merida assistance money is flowing despite misleading public 
reports -- 700 million in equipment and technology will be 
delivered under Merida through 2010 plus more in technical 
assistance and training -- and it is helping to deepen law 
enforcement capabilities and translate critical intelligence into 
more effective operations.  The challenge is to use effectively the 
capabilities we are creating. 
 
¶4. (SBU) The integration of intelligence and operations is 
improving.  A failed operation in mid-December to capture Beltran 
Leyva led to a brutally honest exchange with the Mexican 
authorities. The following week Mexican Special Forces conducted a 
well executed operation to track down Beltran Leyva.  The week 
before the Federal Police ran another operation launched from 
Brownsville, Texas into Matamoros.  Still, the drug traffickers are 
not resting, as demonstrated by the tragic killing of the family of 
a Mexican marine who participated in the raid on Beltran Leyva. 
Senior Mexican officials, including President Calderon, have told 
the Ambassador personally that they are not backing off, and if 
anything Mexican resolve is stronger. 
 
Political Context 
 
¶5. (SBU) That resolve has to be seen in the context of Calderon's 
political challenge.  His numbers have dropped over the last year 
but remain above fifty percent, in keeping with a Mexican tradition 
of strong popular support for the President.  He scores well for 
his toughness and determination but economic worries still dominate 
the electorate and on these issues he scores somewhat lower.  This 
 
MEXICO 00000202  002 OF 005 
 
 
explains a new ordering in his public statements that is putting 
jobs and recovery slightly ahead of the fight against DTO's.  That 
will actually support our efforts to broaden our approach and help 
address some of the socioeconomic issues that are feeding into the 
organized crime problem.  Some of the other areas that we will be 
working on - legal reform and our zero tolerance for violence with 
citizen groups - will offer some inroads for delicate discussions 
with the government on messaging, which at times forgoes themes of 
modernization and rule of law for more sensational images which 
confuse the public. 
 
Expanded Vision 
 
¶6. (SBU) The vision guiding our work is stronger, reinforced by the 
President's trip to Guadalajara in August, the Secretary's meeting 
with the Foreign Secretary Espinoza in September and nourished by 
the many high level visitors - NSC Director John Brennan, Deputy 
Secretary Lew, Undersecretary Otero, Assistant Secretary 
Valenzuela, DNI Blair, Assistant Secretary of Defense Stockton, 
Generals Renuart and Stutzreim and others - who visited Mexico in 
the last quarter of 2009.  We are no longer fixated on capturing 
high-value targets, even though that remains necessary.  Now we are 
moving to assess and penetrate the drug trafficking organizations 
(DTOs) as corporations, and to build the civilian institutions to 
enforce the rule of law.  This will require additional intelligence 
capacity, especially on tracking money flows.  We have an excellent 
cadre of interagency experts at post and DNI and the interagency 
are both engaged at senior levels.  We need to develop a 
comprehensive strategy to get at the DTO's money and not be driven 
by uncoordinated individual cases. 
 
Lowering Military Profile 
 
¶7. (SBU) As a result of our expanded discussion, the GOM is looking 
for ways to lower the profile of the military in the cities along 
the border.  Our joint bilateral assessment missions to Tijuana, 
San Diego, Ciudad Juarez and El Paso, have helped with this and 
generated a new willingness to look at ways to strengthen the role 
of the police and local civilian authorities that will help 
reinforce the weak connection between the military's efforts in the 
cities and legal prosecutions.  In Ciudad Juarez, the military 
transferred its local command in the early part of 2010 to the 
federal police.  Already 1,600 federal police have deployed.  We 
are engaged with the Mexican authorities on new command and control 
arrangements.  The first stages will be messy, but this is a 
massive step forward, influenced by our attention to performance 
and human rights.  The goal is to develop civilian enforcement 
models that could help get the military into support functions. 
 
Looking at Socioeconomic Factors 
 
¶8. (SBU) The new strategy is also encouraging the Mexicans to look 
at the poverty and marginalization of communities exploited by the 
drug trafficking organizations (DTOs).  For the first time, the GOM 
agreed to engage on a socioeconomic agenda targeted at communities 
to stop the flow of recruits to the DTOs.  Pilot projects in Ciudad 
Juarez and Tijuana could pave the way for other cities.  USAID has 
already had success with models to issue state and municipal bonds 
to support job creation and infrastructure.  But there is no means 
to align federal, state and municipal programs, budgets and 
policies into coherent community programs - a classic urban 
planning conundrum.  We are working out options to integrate urban 
planners, and perhaps to leverage funds from the DoD 
Counter-Narcotics budget. 
 
Human Rights and Community Engagement 
 
MEXICO 00000202  003 OF 005 
 
 
¶9. (SBU)  We have not neglected legitimate concerns in Congress and 
the NGO community about missteps in the area of human rights. 
Recent decisions at the Inter American court and the appointment of 
new leadership at the Mexican National Commission on Human Rights 
have opened up new space for discussion and programmatic efforts 
that can help build transparency and reinforce legal protections. 
We have worked out the details of a new bilateral dialogue on human 
rights that will include the military, police and legal authorities 
that will be launched in early February.  We are consulting with 
the NGO's as well through a regular dialogue focused on a set of 
focused priorities aimed at improving the human rights situation in 
the future and opening up new avenues for information about past 
violations.  This work is delicate and it must not be presented or 
perceived as a vendetta against the Mexican military.  A parallel 
effort in a new bilateral defense working group, chaired on our 
side by DoD/OSD Assistant Secretary Stockton, will be working with 
the Mexican defense establishment on a broader agenda keyed to 
modernization.  NORTHCOM is also working on a human rights training 
program that will address issues of military justice, and look for 
ways to reinforce civilian protections in the military's doctrine 
and training. 
 
¶10. (SBU) Another element of our human rights strategy is focused 
on citizen groups in an effort to build a national consensus that 
is unambiguous in its rejection of criminality and violence.  This 
effort was given a big boost by the Alliance of Youth Movement 
conference we held in October, which opened up new links with 
individuals, NGOs and other organizations using social networking 
media.  This began a promising project to get Mexican cell phone 
companies to make available free SMS messaging to "denounce" acts 
of violence with security tips.  The hot line project is moving, 
but details are still to be worked out: information has to get from 
cell phones to police stations anonymously and in real time; the 
police need to be trained to respond; public awareness and 
confidence needs to be built through a public information campaign; 
and NGOs will have to monitor performance.  We will need to engage 
community NGOs and the media to reinforce national efforts and U.S. 
experts will need a Mexican counterpart to run the local operations 
and carry this forward.  We have gotten critical support from 
Senior Advisor Ross and hope to bring together all of the pieces by 
the end of February. 
 
Unprecedented Cooperation 
 
¶11. (SBU) The considerable progress on all these fronts would not 
be possible without the Mexican Government's commitment to work 
with us in a way that is unprecedented.  This is not only a huge 
step forward for our bilateral relationship but it is also helping 
to stimulate the creation of a genuine Mexican interagency 
coordination process.  The Mexicans have created a Deputies 
Committee.  They meet with our Embassy team and me at least every 
two weeks, and usually more often.  We have working groups on each 
of our strategic goals.  Assistant Secretaries in each program area 
have met at least twice to ensure that those with policy and 
implementation responsibilities engage directly.  At the end of 
January, NSC Director John Brennan and his Mexican counterparts 
will review our strategic plans in a joint Policy Coordination 
Group meeting that will launch the intensive work on implementation 
and prepare for possible senior level visits in 2010. 
 
Economic Agenda - Joint Competitiveness 
 
¶12. (SBU)  As we institutionalize the security agenda, we will 
focus more on economic competitiveness and energy in 2010.  To 
date, macroeconomic recovery has absorbed 70% of the economic 
agenda and trade disputes have taken up another 25%, leaving only a 
small residual to advance Mexican and U.S. competitiveness in a 
 
MEXICO 00000202  004 OF 005 
 
 
global economy.  It is striking that our major industrial and 
service groups cannot today produce globally competitive cars and 
tractors in the United States without integrating their production 
lines with Mexico.  We are working to document this - but the 
anecdotal evidence is profound.  While we may lose some jobs in 
some sectors to Mexican labor, on the whole we would lose more to 
other regions of the world if Mexico did not help us to reduce our 
production costs.  With Mexico's substantial portion of our imports 
and as an important destination for U.S. investment, improving 
Mexico's competitiveness is a mutually beneficial goal.  These are 
key areas where we will focus attention: 
 
--Modern Border:  We need to reconceptualize the border to extend 
it to transit hubs throughout Mexico and the United States, and 
move our security and customs operations to these decentralized 
points.  As long as border operations are limited to a geographic 
line between the United States and Mexico, we will be bound by 
physical space and infrastructure.  If we create multiple customs 
points in cities like Monterrey and Guadalajara, we can expand 
processing capacity and accelerate transit.  GPS technology will 
let us track trucks and trains to confirm that they do not get 
diverted and opened.  Only by moving in this direction can we 
shatter the physical stranglehold on our borders. 
 
--Resolve Trucking: We have to resolve our trucking dispute with 
Mexico.  Every study has shown that Mexican truckers on U.S. hauls 
have performed better than their U.S. counterparts.  Our block on 
transit flows from Mexico to the United States is hurting our 
industry, and if we do not fix this, it will lead to more tariffs 
under NAFTA against U.S. products.  With health care reform on the 
verge of passing, we need a high-level political push to get this 
issue on track. 
 
--Energy and Environment: The energy and environment agendas have 
huge potential, especially with Mexico hosting the next UN 
Framework Convention on Climate Change in December 2010.  Already 
we are gaining traction on commercial investment in renewables. 
EXIM approved in December an $80 million guaranty for wind power to 
accompany $150 million in Inter-American Development Bank (IDB) 
funds.  We will focus more on harmonized regulations and tariffs 
that will create the incentives for investment in Mexico that can 
supply renewable power north of the border and contribute to our 
renewable portfolio standards. 
 
--Poverty:  Squarely a Mexican responsibility, but a country of 113 
million with a 45% poverty rate on our border affects immigration 
flows, DTO recruits and prospects for internal stability in Mexico. 
Our community-based pilot programs on security provide an entry 
point to engage.  Small investments on our side will leverage 
billions from the Mexican budget, the IDB and World Bank. 
 
Comment 
 
¶13. (SBU) These issues are hugely sensitive because they are at the 
heart of Mexico's sovereignty.  We will have to be sensitive to the 
special historical significance of 2010, the two hundred year 
anniversary of Mexico's independence and the centennial of its 
revolution.  The challenge will be to ensure that, at least as far 
as we are concerned, the commemoration draw from history but 
celebrate the future.  Our bilateral relationship has never been 
stronger or more mature.  Many of the old anti-American shibboleths 
are dead or dying, and the real political reform that many believe 
will happen in the near future will sweep away a number of  the 
remaining vestiges of the "Yankee go home" sentiment.  Our 
cooperation in 2010 can take us a long way to create the kind of 
partnership that will help us in regional and even global terms. We 
will need the resources and continued senior engagement in order to 
 
MEXICO 00000202  005 OF 005 
 
 
implement our comprehensive strategy and consolidate the gains we 
have achieved so far. 
FEELEY