Obama and Mexico's Calderon to talk drug war, trade

MEXICO CITY (Reuters) - Battling with spiraling drug murders and an economic crisis, Mexico’s Felipe Calderon will urge U.S. President-elect Barack Obama on Monday to support his drug war and stick to the NAFTA trade deal.

Mexico's President Felipe Calderon speaks during a visit to the navy headquarters in Mexico City December 19, 2008. REUTERS/Felipe Leon

Their meeting in Washington, days before Obama takes office, comes after years of complaints of neglect from Mexico and much of Latin America as President George W. Bush’s foreign policy focused on the Middle East and the war on terror.

With Mexico’s drug violence exploding and fears that Obama could tamper with the North American Free Trade Agreement to protect U.S. workers, Calderon will try to persuade the Democrat to give Mexico some attention.

Following a tradition that new U.S. presidents meet their Mexican counterparts, Calderon will be the first foreign leader that Obama sits down with since he was elected in November.

Calderon, a dour and strong-willed conservative, is expected to ask Obama for more help fighting the drug cartels who worry foreign investors and are destabilizing Mexico, especially along the U.S. border.

Mexico wants Washington to do more to curb drug-taking in the United States and gun smuggling from north of the border because drug hitmen buy automatic weapons and other guns legally in the United States and bring them back to Mexico to use in the turf battles that killed 5,700 people last year.

“Drug trafficking is not a Mexican problem. It is impacting both societies and the criminals are operating in U.S. territory,” said Armand Peschard-Sverdrup at the Center for Strategic and International Studies in Washington.

“There is an opportunity for the Obama administration to address the issue from a public health standpoint... We can put people in jail but we are not addressing the root causes of the problem,” said Peschard-Sverdrup, who was to dine with Calderon on Sunday evening before he meets Obama.

Calderon has sent the army against drug gangs but last year was the most violent yet as two main groups, the Gulf cartel and Sinaloa alliance, fight for control of smuggling routes to the United States and other smaller gangs face off.


As economic woes bite in both countries, Calderon is also anxious about Obama’s suggestion during the election campaign that he might seek to renegotiate NAFTA, which U.S. unions see as a cause of job losses in big industrial states like Ohio.

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Calderon told international business leaders at a summit meeting in November that restricting trade would only drive more Mexicans to emigrate illegally to the United States.

Mexico’s economy is expected to shrink this year as U.S. consumers buy fewer Mexican-made goods like cars and televisions.

Finance Minister Agustin Carstens said on Friday that Mexico will languish in recession in the first half of 2009. He said exports and remittances will drop and that the timing of an upturn will depend on Obama’s economic program.

“We’ll start growing again once the situation abroad normalizes,” Carstens said.

Mexican factories exporting to the United States boomed as trade between the two nations has quadrupled to around $350 billion a year since NAFTA came into effect in 1994.

But now there are layoffs in Mexico and many families that rely on money sent to them from relatives in the United States have also been hard hit.

Some 10 million Mexicans live and work in the United States, many of them illegally, and the money they wire home is one of Mexico’s biggest sources of foreign currency.

Foreign Minister Patricia Espinosa said this week that Mexico is still seeking reforms promised by Bush to give immigrant workers in the United States legal status. Bush tried to push through modest reforms but they were blocked by Republicans in the U.S. Congress.

During a 2007 visit, Bush also pledged a $1.4 billion drug aid package for Mexico and Central America, but only $300 million has been freed up and equipment may not arrive for months.

“A strengthening of the initiative will be necessary, greater resources,” said Enrique Cardenas, head of the Estudios Espinosa Iglesias think tank in Mexico City.

Few expect Mexico to be among Obama’s top priorities given the ongoing crisis in the Middle East and a slumping economy.

But as Mexico, which opposed the U.S.-led war in Iraq, takes up a rotating seat on the U.N. Security Council, Obama could seize the chance to mend frayed relations.

“Canada and Mexico are not relationships that can be put aside,” said Peschard-Sverdrup. “The countries are joined at the hips.”

Additional reporting by Robin Emmott in Monterrey; Editing by Kieran Murray