Bush immigration failure hurts Mexico's Calderon

MEXICO CITY, June 11 (Reuters) Washington's failure to change its immigration laws is a blow to pro-US Mexican President Felipe Calderon as he faces his toughest challenges since taking office in December.

After a strong start to his presidency, Calderon is struggling to defeat violent gangs that smuggle drugs across the US border and his government is embroiled in tough talks with Congress to hammer out a tax reform.

Winning a relaxation of US immigration laws has been the main foreign policy goal of Mexico for years and would earn credit for Calderon, a conservative with a Harvard degree who only won last July's election by under a percentage point.

''Resolution, or at least some progress in addressing the immigration issue, would have been a big boost to the government of Mexico,'' said Peter Hakim, head of the Inter-American Dialogue think tank in Washington.

Republicans and Democrats blocked a US Senate vote last Thursday on a bipartisan bill backed by President George W Bush that included tougher border security measures and a plan to legalize most of the country's 12 million illegal immigrants.

While some in the US Congress say they will try to revive the bill with Bush's help, others believe the effort is dead and cannot be restarted.

Calderon, praised in Mexico for berating Bush over immigration at talks in March, said on Friday: ''It should be deplored how the discussions in the US Senate have not been able to follow a swift course and quickly win approval of this issue.'' While not as close to Washington as his predecessor Vicente Fox, Calderon is an advocate of free trade who is seen as a natural ally of Bush against Latin American leftist leaders like Venezuelan President Hugo Chavez.

But Mexico, where almost everyone has a friend or relative living in the United States, is upset at Bush's inability to make good on promises to better the lives of the 11 million Mexicans north of the border.

''It's a shame because Mexico has been permanently supporting the United States on security and drug trafficking,'' said Sen. Jose Luis Lobato, an opposition member of the Mexican Senate's foreign relations committee.

DRUGS, ENERGY Calderon has sent thousands of troops to fight drug cartels in rural Mexico in a war that should cut the flow of cocaine and marijuana across the border.

But Mexico's narco gunmen have hit back at police and soldiers and Calderon complains Washington has done little to curb demand for illegal drugs in the United States or the flow of US arms to the cartels.

Twenty-three people died in drug violence in one day alone last week and the army is under pressure for the killing of five unarmed civilians are a checkpoint in Sinaloa state.

Apart from the drug war, Calderon's other main push is for economic reforms. A former energy minister, he wants to allow more private companies into Mexico's closed oil sector and US firms would benefit.

But any hint of foreigners taking control of Mexico's oil raises nationalist hackles, even though the government has no plans to privatise state energy monopoly Pemex.

Looser immigration laws in the United States might help Calderon gain an energy reform sought by Washington.

''Those people who want to adjust oil policy in ways that might be helpful to the United States are operating from a far weaker position when the United States is being uncooperative on an issue like immigration,'' said Hakim.

REUTERS SKB RS0828