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MEXICO CITY (Reuters) - The United States has spent over $1 trillion promoting democracy in far-flung Iraq and Afghanistan while friendly neighbor Mexico gets a fraction of that to fight drug gangs and prevent a slide into chaos.
Mexico's frustration with the priority Washington grants to a shared crackdown on drug gangs has plunged ties between the two allies to their lowest ebb in years.
Last year alone, the U.S.-backed campaign launched in late 2006 by President Felipe Calderon claimed the lives of over 15,000 people in Mexico. That was more than double the combined civilian deaths reported in Afghanistan and Iraq, where the United States has spent over $1.2 trillion in the past decade.
In contrast, Washington has pledged just $1.3 billion under the so-called Merida Initiative to help Mexico fight the traffickers.
"The Merida Initiative is almost an insult," leading Mexican historian Enrique Krauze told Reuters. "America spends a trillion dollars in Iraq and a hundred million or so on Merida: Beautiful."
"Things aren't moving forward and I have no hope they will. We're looking at ten years of war in Mexico. On our own. The Obama administration has been a huge disappointment for us."
Despite quickly growing ties over the past two decades, investment and bilateral trade worth some $400 billion a year could suffer if the two sides cannot end the disputes that have dogged joint efforts to manage a conflict that some U.S. lawmakers compare to the Iraq war.
Mexico's leaders argue the oil-rich nation is footing the bill for illegal U.S. arms sales and the presence of the world's biggest market for illicit drugs across the border.
U.S. attempts to set traps for arms traffickers and money launderers have backfired and Washington has treated Mexico like a "laboratory" for experiments in law-enforcement strategies, former foreign minister Rosario Green wrote in a newspaper column recently.
U.S. officials counter such broadsides by saying Mexico has failed to address rampant corruption in the police and the judiciary, hampering efforts to improve on intelligence sharing.
The fight against the cartels will be under the spotlight again when U.S. Secretary of State Hillary Clinton meets her Mexican counterpart Patricia Espinosa in Washington on Friday.
Tensions over the conflict, which has claimed over 37,000 lives in Mexico in the past four years, boiled over last month when U.S. ambassador Carlos Pascual said he would step down after weeks of pressure from the Mexican government.
"That a Mexican president can pick off the U.S. ambassador is something new." said Jonathan Fox, a political scientist and Mexico expert at the University of California, Santa Cruz. "That does suggest the U.S. needed to throw Calderon a bone."
Mindful of its sovereignty, Mexico has resisted U.S. intervention on its turf, but Calderon insists Washington is not trying hard enough to fight demand for narcotics at home.
White House data shows U.S. federal spending on narcotics control dipped slightly last year to just over $15 billion, even as drug war deaths surged to a record high in Mexico. Texas Republican congressman Ted Poe refers to Mexico as the United States' "third front" after Afghanistan and Iraq.
There is little to suggest the situation is improving.
This month, the worst mass graves of the drugs war have been found in the northern border state of Tamaulipas.
The killing tide has bogged Calderon down in a war of words with Washington over drug demand and exposed him to fire from domestic rivals who say he has compromised national sovereignty by letting U.S. spy planes track cartels on Mexican territory.
Calderon's conservative National Action Party has also taken a hit, and its lags behind the opposition Institutional Revolutionary Party in polls ahead of the next presidential election in 2012.
The elections could make it even harder to repair Mexico's ties with the United States, said Mexico expert George W. Grayson at the College of William and Mary in Virginia.
"There's too much electoral capital to gain by bashing Uncle Sam in the run-up to a presidential contest," said Grayson. "I think they will deteriorate until then."
After humiliating defeats and land losses to its neighbor in the 1800s, Mexico's politicians have long fed a myth that the United States is a "hungry wolf" bent on evil, said Krauze.
In reality, years of cross-border migration, close business ties and the export of U.S. popular culture had created strong bonds between the people of both nations, he added.
Ordinary Mexicans are quick to criticize their own government for failing to work better with the United States.
"If you ask me, they're preventing the Americans from doing more here," said Mexico City resident Hector Lopez, 41.
Critics say the United States is loathe to do more in the drugs war unless it feels pain directly. After suspected drug hitmen killed a U.S. customs agent in Mexico in February, officials sprang into action, making a string of arrests of traffickers in the United States.
Since then, the U.S. government has warned its citizens to avoid parts of Mexico, to the frustration of Mexican officials worried about a drop in tourism and investment.
Additional reporting by Tim Gaynor