"The United States and Mexico have a close and complex relationship as neighbors and partners under the North American Free Trade Agreement (NAFTA). Although relations with Mexico are generally friendly, and in October 2007, the two countries announced an unprecedented initiative to increase counternarcotics cooperation known as the Mérida Initiative. The enactment of border fence legislation in October 2006 has caused some tension in the bilateral relationship. In October 2007, the United States and Mexico announced the Mérida Initiative to combat drug trafficking, gangs, and organized crime in Mexico and Central America. The Administration has requested $500 million in supplemental assistance for Mexico as part of a $1.4 billion, multi-year aid package. The Administration requested a further $450 million in assistance in its FY2009 Budget request. 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. […] Migration and border security concerns have dominated the bilateral relationship in recent years. Comprehensive immigration reform was debated early in the 110th Congress, but the issue has been put aside following a failed cloture motion in the Senate on the Comprehensive Immigration Reform Act of 2007 (S. 1348). In September 2006, Congress approved the Secure Fence Act of 2006 (P.L. 109-367) to authorize the construction of a border fence and other barriers along 700 miles of the U.S.-Mexico border. In September 2006, Congress also approved initial funding for fence construction, $1.2 billion, through the FY2007 Department of Homeland Security Appropriations Act."
CRS Report for Congress, RL32724