U.S.-Mexico Economic Relations: Trends, Issues, and Implications [January 24, 2006]   [open pdf - 140KB]

"Mexico has a population of slightly over 100 million people making it the most populous Spanish-speaking country in the world and the third most populous country in the Western Hemisphere. Based on a gross domestic product (GDP) of $677 billion in 2004 (about six percent of U.S. GDP), Mexico has a free market economy with a strong export sector that is very sensitive to changes in the U.S. economy. Mexico's economy is relatively small compared to the U.S. economy. Economic conditions in Mexico are important to the United States because of the close trade and investment interactions, and because of other social and political issues that could be affected by economic conditions, such as immigration. The bilateral economic relationship with Mexico is among the most important for the United States. The most significant feature of the relationship is the North American Free Trade Agreement (NAFTA), which has been in effect since 1994. In bilateral trade, Mexico is the United States' second most important trading partner, while the United States is Mexico's most important trading partner. In U.S. imports, Mexico ranks third among U.S. trading partners, after Canada and China, while in exports Mexico ranks second, after Canada. The United States is the largest source of foreign direct investment (FDI) in Mexico. These links are critical to many U.S. industries and border communities. […] After the meeting, the three leaders announced the Security and Prosperity Partnership of North America (SPP) in which they seek to establish a cooperative approach to advance their common security and prosperity; develop a common security strategy; and promote economic growth, competitiveness, and quality of life. This report will be updated as events warrant."

Report Number:
CRS Report for Congress, RL32934
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