FACTBOX: Drug war, climate on agenda at Mexico summit

(Reuters) - U.S. President Barack Obama attends his first summit of North American leaders on Sunday, meeting in the Mexican city of Guadalajara with Mexican President Felipe Calderon and Canadian Prime Minister Stephen Harper. Following are issues likely to come up during the summit:

MEXICO'S DRUG WAR

Mexican drug gangs are killing rivals in record numbers and major army operations appear unable to stop the violence. About 850 people were killed in July, the deadliest month since Calderon launched an assault on the cartels in late 2006.

Obama is likely to stress his support for Calderon's drug war, pledge to improve U.S. efforts to stop guns and cash flowing south and speed up a $1.4 billion package to help Mexico fight the drug war.

ECONOMIC CRISIS

The United States and Mexico have both been hit by the deepest recession in decades. Hurt by a slide in U.S. demand for manufactured goods, Mexico's economy is expected to shrink about 7 percent this year. Canada has also been hit by recession and is heavily dependent on exports to the world's top economy. All three nations are betting on Obama's economic stimulus package and a nascent recovery in the global economy as manufacturing, housing and retail data start to improve.

CROSS-BORDER TRUCKING

Washington agreed under the North American Free Trade Agreement to allow Mexican trucks on U.S. roads. But a spending bill passed by Congress and signed by Obama eliminated funding for a pilot program launched by Obama's predecessor, George W. Bush. Mexico slapped retaliatory tariffs on $2.4 billion in U.S. goods in March. U.S. business groups say producers and farmers are suffering lost sales.

HONDURAS

The political crisis over the June 28 army ouster of Honduran President Manuel Zelaya is not likely to be on the summit agenda, but Calderon is expected to urge Obama in a bilateral meeting to resolve the deadlock. Obama has condemned the coup and frozen some military aid to Honduras, but mediation efforts are faltering and the de facto government seems determined to hold on to power even if it is not recognized by any foreign governments.

CLIMATE CHANGE

Obama, Harper and Calderon want to show a united front on tackling global warming and cutting C02 emissions. Obama has made alternative energy a central part of his presidency and Calderon has pushed climate change up Mexico's agenda. Canada is debating imposing caps on the level of greenhouse gases industries can emit, promoting carbon credits and investing in projects to cut emissions.

"BUY AMERICAN" CONCERNS

Canada is upset by a "Buy American" provision in the U.S. economic stimulus package that it says could hurt bilateral trade. The United States and Canada are each other's largest trade partners, with close to $600 billion in total two-way trade in 2008.

IMMIGRATION

About 12 million illegal immigrants live in the United States, mostly from Mexico and Central America. Efforts to reform the system, granting some immigrants the right to stay while requiring others to return home and apply for re-entry, failed in 2006 and 2007. Obama has told Calderon he will work for immigration reform.