By Matt Spetalnick
WASHINGTON (Reuters) - President Barack Obama hosted Mexican President Felipe Calderon for talks on Thursday aimed at easing cross-border tensions over drug violence, trade disputes and illegal immigration.
Long-simmering problems between the United States and Mexico have slipped down Obama's agenda as he has been distracted by Middle East unrest, a budget fight in Congress, a fragile U.S. economy and his looming 2012 re-election bid.
With Calderon's visit a chance to refocus Obama's attention on bilateral ties, the leaders planned to announce an agreement on a way to resolve a cross-border long-haul trucking row that has hurt trade between the two countries, whose trade surpasses $1 billion a day.
Beyond that, however, there was scant expectation that their White House talks would yield major breakthroughs.
Calderon raised eyebrows in Washington last week when he accused the United States of damaging efforts to beat back drug cartels, just days after one of the worst attacks on U.S. officials in Mexico left one Immigration and Customs Enforcement (ICE) agent dead and another wounded.
Calderon was expected to press Obama to do more to crack down on U.S. drug consumption and illegal arms sales to Mexican gangs, which the Mexican government says is fueling violence south of the border.
A senior U.S. official said Washington had already ramped up its efforts in those areas and played down Calderon's criticism, saying both governments have to "up their games" in the drug war.
Since Calderon launched a war on the cartels in late 2006, more than 36,000 people have been killed, putting pressure on Mexico and the United States to beef up their response.
The spiraling violence worries foreign investors and makes some tourists nervous about visiting Mexico, and drug-related abductions have spilled over to the U.S. side of the border.
Intelligence sharing has increased but mistrust between security forces has hampered progress. Mexico's resources are stretched and the United States has limited options, needing to tread carefully in a neighbor mindful of its sovereignty.
Calderon's visit -- his first since an official state visit in May -- comes after a Mexican newspaper interview in which he uncharacteristically blasted the U.S. ambassador to Mexico as "ignorant", and lashed out at ICE, the CIA, and the Drug Enforcement Administration for their role in the drugs war.
"The reality is that they don't coordinate with each other, they're rivals," he told a Mexican newspaper.
The Obama administration has acknowledged some U.S. responsibility for the border chaos but it has its share of criticism for Mexico as well.
In diplomatic cables published recently by anti-secrecy website WikiLeaks, U.S. officials said in January of last year that Mexican authorities were not working together to bring the cartels to heel.
U.S. officials have praised Mexican law enforcement cooperation in the investigation of the killing of ICE agent Jaime Zapata. But his death has also prompted calls from U.S. lawmakers that U.S. agents in Mexico should be allowed to carry guns.
Despite the roiled diplomatic waters, the two leaders are expected to paper over any differences at a joint news conference and again commit to battling the drug gangs, which are seen as cutting into U.S. investment and tourism in increasingly lawless border areas.
No major new initiatives were expected on issues like illegal immigration, a long-standing irritant in U.S.-Mexican relations.
Obama has vowed to tackle comprehensive immigration reform that would ease the plight of millions of undocumented Mexican workers in the United States.
But there are strong doubts he would launch any major new legislative effort on the hot-button issue as his 2012 re-election bid approaches.
(Additional reporting by Dave Graham in Mexico City and Jeremy Pelofsky, Doug Palmer and Jeff Mason in Washington)