"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). Since 1994, trade between the countries has tripled. Bilateral relations are generally friendly, although the U.S. enactment of border fence legislation in 2006 caused some tension in the relationship. Under the Bush Administration, the United States launched initiatives to combat drug trafficking, augment border security, and combat human smuggling. 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 United States. In October 2007, the United States and Mexico proposed the Mérida Initiative to combat drug trafficking, gangs, and organized crime in Mexico and Central America. [...]. An unexpected challenge for Calderón is the effect of the recent global financial crisis on the Mexican economy, which already has led to a decline in the stock market and the value of the peso. The 111th Congress will likely maintain an active interest in Mexico with myriad counternarcotics, migration, trade, and border issues dominating the agenda. Comprehensive immigration reform was debated early in the 110th Congress, but the issue was put aside following a failed cloture motion in the Senate on the Comprehensive Immigration Reform Act of 2007 (S. 1348). Immigration reform efforts once again could be considered in the 111th Congress."
CRS Report for Congress, RL32724