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Mexican Standoff

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MEXICO CITY DRUG WAR
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Five years into Mexico's U.S.-backed war on drug trafficking, the sale of narcotics continues to be a one of Mexico's most profitable industries -- earning violent cartels an estimated $30 billion each year, or roughly three to four percent of Mexico's GDP. The country is awash in bloodshed. Since Mexican President Felipe Calderón deployed his military to take on drug cartels in 2006, some 35,000 Mexicans have lost their lives. And now relations between the U.S. and Mexico are showing strain. The U.S. Ambassador to Mexico resigned earlier this month after leaked confidential cables revealed him questioning the competency of the Mexican effort.

While many say the war is a lost cause, Calderón and Obama insist they are winning, and that most of violence stems from a power struggle between cartels squeezed by the new pressure. Earlier this month, I traveled to Mexico to try to make sense of this contradiction. For our special report "Mexican Standoff," we discussed this topic at length with several experts. We heard one proposal you wouldn't expect to come from a prominent former Mexican government official.

Jorge Castañeda, who served as foreign minister under Calderón's predecessor and now teaches at New York University, thinks the answer is to legalize drugs in Mexico and the United States -- starting with marijuana.

"Legalization of drugs doesn't seem to me to be a terribly radical proposal," he said, pointing out that more than a dozen states already allow the use of medical marijuana, and that California voters came close to legalizing the drug for recreational use.

"So why in the world would American presidents declare war on drugs in Chicago or Los Angeles or New York or Birmingham or anywhere else? They don't want to. What's incomprehensible to me is why [Mexico] should do it if Americans don't want to."

Making pot legal, Castañeda says, would kneecap the cartels, which make their profit from the very illegality of the drug they are selling. Drug users are willing to pay a premium for what they can't easily get; Making pot legal would drop prices and put traffickers out of business. Not only that, says Castañeda, but an above-board marijuana trade would employ thousands of workers, and allow the Mexican government to collect much-needed tax revenues.

Lest you think that Castañeda has gone off the rails, it's worth mentioning that his former boss, ex-President Vicente Fox, recently posted on his blog that he also favors ending the prohibition of illegal drugs, especially marijuana. Both say that doing so will significantly diminish the bloodshed plaguing Mexico and free the country's strained law enforcement to take on other crimes perpetrated by criminal gangs.

"If you look at the polls and you ask Mexicans are they worried about drug trafficking?" he said. "No. Are they worried about drug consumption in Mexico? No. Are they worried about kidnapping, violence? Yes. Okay, so what you want to do is attack those aspects of the violence and insecurity. The collateral damages. You want to stop kidnapping. You want to stop extortion, protection rackets, which are really terribly damaging to communities... Now, when someone says, 'Well, it's the drug traffickers who do that,' well go after the kidnapper. If he happens to be a drug trafficker also, great, you got a two-fer."

For now, it doesn't appear that anyone in Obama or Calderón's office will heed Castañeda's call. For now, it is clear that the drug war rages on. Shortly after I returned from Mexico, it came out that the United States military had even begun flying drones over Mexico to track movements of traffickers -- the same type of unmanned aircraft used to track insurgents in Iraq and Afghanistan.

Dan Rather Reports airs Tuesdays on HDNet at 8 p.m. and 11 p.m. ET and is available on iTunes.