NAFTA

The North American Free Trade Agreement (NAFTA), which was enacted in 1994 and created a free trade zone for Mexico, Canada and the United States, is the most outstanding feature in the U.S.-Mexico bilateral relationship.

Since the implementation of NAFTA, Mexican imports from the United States have increased exponentially, totaling over USD$111 billion in 2004.

Trade and the Mexican Economy

The United States accounts for nearly 75% of total Mexican trade and Mexico has become the United States’ second largest trading partner since NAFTA began.

In 2004, the economy grew by 4%, the strongest growth rate in several years.

Mexican Political Atmosphere

Politically, Mexico is gearing up for the presidential elections in 2006. President Vicente Fox won a watershed victory in 2000 after his PAN party defeated 71 years of single-party rule by the PRI. While Fox has successfully pushed through reforms making the Mexican Government more transparent and accountable, such as establishing Mexico’s first-ever civil service and enacting freedom-of-information laws, much of his economic reform agenda has been defeated or is now stalled. Given the PRI-controlled Congress, spectators remain doubtful that he will be able to implement substantial legislative changes during the remaining two years of his term. Currently the presidential race is wide open with several viable contenders in the running. All three major political parties will elect new leadership in March and party candidates for the presidency will be confirmed soon afterwards.