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Summary

The United States and Mexico have a close and complex bilateral relationship, with extensive economic linkages as neighbors and partners under the North American Free Trade Agreement (NAFTA). Bilateral relations are close, and characterized by extensive commercial and cultural ties and cooperation on a range of bilateral and international issues. Since the two economies are closely linked, the U.S. recession has had a significant negative effect on Mexico, where economic growth may contract by 7% this year. A current bilateral dispute involves the implementation of NAFTA trucking provisions. In March 2009, Congress terminated a pilot- project for Mexican-registered trucks to operate beyond the border commercial zone, and Mexico responded by imposing import tariffs on more than 90 U.S. agricultural and industrial products. Drug trafficking issues are prominent in relations since Mexico is the leading transit country for cocaine, a leading supplier of methamphetamine and heroin, and the leading foreign supplier of marijuana to the U.S. market. Shortly after taking office in December 2006, President Felipe Calderón sent thousands of soldiers and federal police to drug trafficking "hot-spots," and is contending with a significant escalation of drug violence, particularly in several border states. U.S.-Mexican cooperation on drug trafficking has intensified in recent years. In October 2007, both countries announced the Mérida Initiative to combat drug trafficking and organized crime. To date, Congress has appropriated a total of $1.1 billion for Mexico under the Mérida Initiative in P.L. 110-252, P.L. 111-8, and P.L. 111-32. For FY2010, the Obama Administration requested $450 million for Mexico under Mérida. The House-passed version of the FY2010 State-Foreign Operations Appropriations measure, H.R. 3081, would provide $235.8 million in Mérida-related aid accounts to Mexico, while the Senate version of the bill, S. 1434, would provide $115 million. President Barack Obama and several members of his Administration have visited Mexico this year. President Obama met with President Calderón in Mexico on April 16-17, 2009, to discuss counterdrug cooperation, immigration reform, and clean energy and climate change. His visit had been preceded by visits in March by Secretary of State Hillary Clinton, who discussed a range of bilateral issues, including the Mérida Initiative, and Secretary of Homeland Security Janet Napolitano and Attorney General Eric Holder, who emphasized new anti-crime efforts. On August 9-10, 2009, President Obama traveled to Mexico for a second time to participate in the North American Leaders Summit with President Calderón and Canadian Prime Minister Stephen Harper. The leaders discussed developing coordinated responses to the global economic crisis, climate change, and security issues. They pointed to North America's successful response to the spring H1N1 "swine flu" outbreak as a model for future collaboration. The 111th Congress is maintaining an active interest in Mexico with counternarcotics, border, and trade issues dominating the agenda. Comprehensive immigration reform efforts could also be considered in the 111th Congress. For more information, see CRS Report R40135, Mérida Initiative for Mexico and Central America: Funding and Policy Issues; CRS Report R40582, Mexico's Drug-Related Violence; CRS Report RL32934, U.S.-Mexico Economic Relations: Trends, Issues, and Implications; CRS Report R40588, The 2009 Influenza Pandemic: U.S. Responses to Global Human Cases ; and CRS Report RL31738, North American Free Trade Agreement (NAFTA) Implementation: The Future of Commercial Trucking Across the Mexican Border.

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