Mexico and the United States

• Author: Jeffrey Lehman, Shirelle Phelps

Page 50

Relations between the United States and Mexico are among the most important and complex that each nation maintains. They are shaped by a mixture of mutual interests, shared problems, and growing interdependence. The United States is particularly concerned with illegal immigration, narcotics trafficking, environmental POLLUTION, and economic stability.

The scope of U.S.-Mexican relations goes far beyond diplomatic and official contacts, entailing extensive commercial, cultural, and educational ties. More than one million legal crossings are made from Mexico to the United States every day. Along the 2,000-mile shared border, state and local governments interact closely. The two countries seek to resolve many issues, ranging from combating narcotics trafficking to improving and protecting the shared environment.

The U.S. government has long recognized that a stable and economically prosperous Mexico is fundamental to U.S. interests. Since 1981, the United States-Mexico Binational Commission, composed of numerous U.S. cabinet members and their Mexican counterparts, has met annually to discuss an array of topics, including trade and investment opportunities, financial cooperation, anti-narcotics cooperation, and migration.

Mexico is a major trading partner with the United States. Mexican exports in 2001 totaled $159 billion, with 88.4 percent of its exports

going to the United States. Of Mexico's 2001 imports totaling $168 billion, 68.4 percent of the imports were from the United States. In January 1994, Mexico joined CANADA AND THE UNITED STATES in the NORTH AMERICAN FREE TRADE AGREEMENT (NAFTA), which will phase out all tariffs among the nations over a 15-year period. U.S. LABOR UNIONS and some businesses were concerned that the lower tariffs would induce more U.S. companies to relocate factories to Mexico because of lower labor costs there.

The United States played a major role in stabilizing the Mexican economy in 1995. The Mexican government, unable to meet its foreign debt obligations, devalued its peso in December 1994. The resulting financial crisis threatened the stability of other emerging-market economies in Latin America. The United States led a group of international lenders that made available to Mexico more than $40 billion in international financial assistance, including $20 billion from the United States. Although Mexico suffered a severe recession in 1995, the Mexican government's implementation of tough stabilization measures averted an...