Mexico-U.S. Relations: Issues for the 108th Congress

CRS Report for Congress
Mexico-U.S. Relations:
th
Issues for the 108 Congress
Updated December 22, 2004
K. Larry Storrs
Specialist in Latin American Affairs
Foreign Affairs, Defense, and Trade Division

Congressional Research Service ˜ The Library of Congress

Mexico-U.S. Relations: Issues for the 108 Congress
Summary
The United States and Mexico have a special relationship as neighbors and
partners under the North American Free Trade Agreement (NAFTA). The friendly
relationship has been strengthened by President Bush’s meetings with President Fox
but has been weakened by disagreements over Iraq and other issues. Major
congressional issues are trade, migration/border security, drug trafficking, and
political issues.
Trade. Since 1994, NAFTA institutions have been functioning, trade between
the countries has tripled, and allegations of violations of labor and environmental
laws have been considered. The Bush Administration has argued that NAFTA has
had modest positive impacts on all three member countries, but Mexican farmers
have strongly criticized the effects of NAFTA. Recent trade disputes with Mexico
have involved trucking, telecommunications, tuna, sweeteners and sugar.
Migration/Border Security. In February 2001, Presidents Bush and Fox
agreed to establish high-level talks to ensure safe, legal, and orderly migration flows
between the countries, but the talks stalled after the September 2001 terrorist attacks,
and border controls were later strengthened under the new Department of Homeland
Security. In January 2004, President Bush proposed a major immigration reform “to
match willing foreign workers with willing U.S. employers when no Americans can
be found to fill the jobs.” In December 2004, Congress passed the Intelligence
Reform and Terrorism Prevention Act of 2004 (S. 2845/P.L. 108-458), with
provisions to increase immigration law enforcement personnel and to adopt more
stringent border control and identity document standards.
Drug Trafficking. Bush Administration officials have regularly praised
Mexico’s counter-narcotics efforts under Fox, especially action against major
traffickers, and have characterized the bilateral cooperation in this area as
unprecedented. The State Department reported in April 2004, however, that
marijuana and opium poppy cultivation increased significantly in Mexico in 2003.
In recent law enforcement actions, on October 19, 2004, DEA officials announced
the dismantling, through Operation Money Clip, of a major Mexican money-
laundering and drug trafficking organization operating in the United States.
Political and Human Rights. In nation-wide elections on July 6, 2003, to
renew the Chamber of Deputies, President Fox’s PAN fared poorly, while the
previously dominant PRI and the leftist PRD increased representation, making
congressional approval of President Fox’s reform measures less likely. Local
elections are being held in an environment in which the parties are positioning
themselves for the July 2006 presidential elections. On human rights issues, President
Fox has designated special prosecutors to prosecute those responsible for human
rights abuses in the 1970s and 1980s, but little progress has been made. On
December 10, 2004, President Fox, responding to an analysis by the U.N. High
Commission for Human Rights, presented a series of proposed reforms to discourage
torture and to strengthen the rights of defendants in Mexico.

Contents
Most Recent Developments..........................................1
U.S.-Mexico Relationship...........................................1
Major Bilateral Linkages........................................1
Fox Administration............................................2
Economic and Social Challenges..............................2
Political and Security Challenges.............................3
Foreign Policy Challenges...................................3
Bilateral Issues for Congress.........................................4
Trade Issues..................................................4
Functioning of NAFTA Institutions............................4
Recent Trade Disputes......................................6
Migration\Border Issues.........................................9
Nature of the Immigration Problem............................9
Bush Administration Initiatives..............................10
Drug Trafficking Issues........................................13
Nature of the Problem.....................................13
Executive-Legislative Actions...............................13
Political and Human Rights Issues................................16
Concerns over Elections and Political Rights...................16
Allegations of Human Rights Abuses.........................18
Legislation ......................................................20
Foreign Relations Authorization for FY2004-FY2005
(H.R. 1950/S. 2144): Provisions Relating to Mexico.............20
Migration Accord.........................................20
Pollution Control.........................................21
Extradition Issues.........................................21
Consular ID Cards........................................22
Rural Development.......................................22
Authorizing Amendment of Mandates of Border Environment
Cooperation Commission and North American Development Bank
(H.R. 254 / P.L. 108-215) ..................................22
Transportation-Treasury Appropriations for FY2005 (H.R. 5025
and H.R. 4818/P.L. 108-447): Provision Relating to Mexican
Matrícula Consular Cards..................................23
Transportation-Treasury Appropriations for FY2005 (H.R. 5025
and H.R. 4818/P.L. 108-447): Provision Relating to Safety
Standards for Mexican Trucks...............................24
Intelligence Reform and Terrorism Prevention Act of 2004
(S. 2845/P.L. 108-458): Provisions Relating to Mexico...........24
For Additional Reading............................................25
CRS Products................................................25

Mexico-U.S. Relations:
th
Issues for the 108 Congress
Most Recent Developments
On November 3, 2004, President Fox congratulated President Bush on his re-
election and called for attention to major bilateral issues. On November 9, 2004, the
cabinet-level Binational Commission meetings were held in Mexico City, Mexico,
after which Secretary of State Powell stressed the growing bilateral cooperation on
counter-narcotics, border security, and immigration matters. On November 17, 2004,
when President Bush met President Fox at the APEC meeting in Santiago, Chile, he
indicated that the countries would be working together on immigration and border
security issues. On December 6, 2004, the body of Enrique Salinas, the younger
brother of former President Carlos Salinas de Gortari (1988-1994) was found,
apparently murdered, and authorities later released a letter, apparently written by the
deceased, expressing concern for his safety and financial situation. On December 7,
2004, Mexico put forward Foreign Minister Ernesto Derbez as a candidate to be the
Secretary General of the Organization of American States. On December 10, 2004,
President Fox, responding to an analysis by the U.N. High Commission for Human
Rights, presented a series of proposed human rights reforms to strengthen the rights
of defendants in Mexico. On December 10, 2004, the U.S. Supreme Court agreed
to hear the case of a Mexican inmate on Texas’ death row who claims that the state
violated international law by failing to notify Mexican consular officials before his
trial for murder. On December 17, 2004, President Bush signed into law the
Intelligence Reform and Terrorism Prevention Act of 2004 (S. 2845/P.L. 108-458),
with provisions to increase immigration law enforcement personnel and to adopt
more stringent border control and identity document standards.
U.S.-Mexico Relationship
Major Bilateral Linkages
Mexico surpassed Japan in 1999 to become the United States’ second most
important trading partner following Canada. It is also one of the leading countries
in Latin America in terms of U.S. investment, with total stock of investment of about
$35 billion in 2001. In addition, cooperation with Mexico is vital in dealing with
illegal immigration, the flow of illicit drugs, and a host of border issues.
The United States is Mexico’s most important customer by far, receiving about
87% of Mexico’s exports, including petroleum, automobiles, auto parts, and winter
vegetables, and providing about 77% of Mexico’s imports. The United States is the

source of over 60% of foreign investment in Mexico, and the primary source of
important tourism earnings.
Until the early 1980s, Mexico had a closed and statist economy and its
independent foreign policy was often at odds with the United States. Beginning
under President Miguel de la Madrid (1982-1988), and continuing more dramatically
under President Carlos Salinas de Gortari (1988-1994) and President Ernesto Zedillo
(1994-2000), Mexico adopted a series of economic, political, and foreign policy
reforms. It opened its economy to trade and investment, adopted electoral reforms
that leveled the playing field, and increased cooperation with the United States on
drug control, border issues, and trade matters. Cooperation under NAFTA and the
annual cabinet-level meetings of the Binational Commission are the clearest
indications of the growing ties between the countries.
Fox Administration
Vicente Fox of the conservative Alliance for Change coalition was inaugurated
as President on December 1, 2000, for a six-year term, promising to promote free
market policies, to strengthen democracy and the rule of law, to fight corruption and
crime, and to end the conflictive situation in the state of Chiapas. Fox’s inauguration
ended 71 years of presidential control by the long dominant party.
Fox was elected with 42.52% of the vote in the July 2, 2000 elections, with
support from the conservative National Action Party (PAN) and the Green
Ecological Party of Mexico (PVEM), which formed the Alliance for Change.
Francisco Labastida from the long-ruling and centrist Institutional Revolutionary
Party (PRI) came in second with 36.10% of the vote. Cuauhtemoc Cardenas from
the leftist Alliance for Mexico came in third with 16.64% of the vote, with support
from the center-left Party of the Democratic Revolution (PRD) and four minor leftist
parties.
Results from the July 2000 legislative elections produced a pluralistic legislature
where none of the major parties had a majority in either chamber. In the 128-member
Senate, the PRI has 60 senators, the PAN has 46, and the PRD has 15; while in the
500-seat Chamber of Deputies, the PRI had 211 deputies, the PAN had 206, and the
PRD had 50.¹
Following the July 2003 Chamber of Deputies elections, the PAN dropped from
206 deputies to 153 deputies (31% of the total), putting it in a weaker position to
support Fox’s program, while the PRI’s delegation increased to 224 (45% of the
total) and the PRD’s delegation increased to 95 (19% of the total).²
Economic and Social Challenges. Mexico has suffered from the effects
of the slowdown in the United States, and the decline in tourism following the

¹ For more detail on the 2000 elections, see CRS Report RS20611, Mexico’s Presidential,
Legislative, and Local Elections of July 2, 2000, by K. Larry Storrs.
² For more detail on the 2003 elections, see CRS Report RS21561, Mexico’s Congress and
July 2003 Elections, by K. Larry Storrs.

September 2001 terrorist attacks. With nearly 90% of the country’s exports going to
the United States, Mexico’s economy contracted 0.8% in 2001, grew only 0.9% in

2002, and grew about 1.3% in 2003. It is projected to grow nearly 4% in 2004.

These meager growth results under Fox contrast with economic growth averaging
over 5% in the previous six years. President Fox has been forced to operate under
austere budgets in 2001, 2002, 2003, and 2004, reducing the funding for promised
health and education programs. Lacking majority support in Congress, Fox has been
unable to obtain approval of major legislation, including a proposed tax reform and
a proposed energy reform that would permit greater private participation in the
hydrocarbon and electricity sectors, although Congress did pass a social security
reform in July 2004. President Fox has threatened to veto parts of the
congressionally approved spending package even though it is unclear whether he has
the constitutional authority to take this action.
Political and Security Challenges. President Fox has promised to end
corruption, to operate a more transparent and open government, and to strengthen the
government’s commitment to human rights. He has attempted to professionalize the
police under a new public security ministry to deal with widespread public concerns
with security and police corruption, and he has undertaken vigorous efforts against
illicit drug traffickers. In late March 2004, he proposed a judicial reform that would
make the criminal justice system more efficient, transparent, and public. Congress
began consideration of this measure but did not complete action. In December 2004,
President Fox followed up with a series of proposed human rights reforms to
discourage torture and to strengthen the rights of defendants in Mexico.
President Fox took several steps in 2001 to end the unresolved situation in
Chiapas, including the introduction of indigenous rights legislation, withdrawal of
the military from some areas, and release of over 30 Zapatista prisoners. However,
when the Mexican Congress passed a modified version of the indigenous rights
legislation, the Zapatistas denounced the legislation as inadequate and withdrew from
any dialogue with the government.
Foreign Policy Challenges. President Fox has indicated that Mexico will
pursue a more activist and diversified foreign policy, with greater involvement in
U.N. activities, and stronger ties to Latin America and Europe. He has promoted the
so-called Puebla-Panama Plan, which promotes cooperative development efforts
among the Central American countries and the southeastern states of Mexico. He is
reviving the G-3 group (Colombia, Venezuela, and Mexico), and is seeking better
ties with the Southern Common Market (Mercosur) countries in South America. He
has sought to expand trade with the European Union under the EU-Mexico free trade
agreement that went into effect in July 2000, and with Japan under the Mexico-Japan
free trade agreement that will enter into force in April 2005. Mexico held a
temporary seat on the U.N. Security Council in 2002 and 2003 and expressed support
for continuing diplomatic efforts under United Nations auspices to achieve the
disarmament of Iraq, leading to expressions of disappointment from the Bush
Administration.
President Fox has encouraged warm and friendly relations with the United
States, and he has called for greater cooperation under NAFTA and for a bilateral
migration agreement that would regularize the status of undocumented Mexicans in

the United States. (See below for more detail.) In 2001, Presidents Fox and Bush
met in mid-February in Mexico, in mid-April in Canada, in early May in the United
States, in early September in the United States on an official state visit, and in early
October in the United States when President Fox expressed solidarity with the United
States following the terrorist attacks. In 2002, the Presidents met in March in
Monterrey, Mexico, following the U.N. conference on development, and in October
in Los Cabos, Mexico, at the Asia-Pacific Economic Cooperation (APEC) summit.
Relations seemed to be especially warm in 2001 when hopes were high for some sort
of migration agreement, but the relationship cooled to some extent when the
migration talks stalled following the terrorist attacks on the United States and when
Mexico was reluctant to support U.S. action in Iraq in the U.N. Security Council. In
2003, the Presidents met in October, in Bangkok, Thailand, at the Asia-Pacific
Economic Cooperation (APEC) summit, where they reaffirmed the desire to discuss
bilateral immigration issues. In 2004, the Presidents met in January, in Monterrey,
Mexico, for the Special Summit of the Americas, in March at President Bush’s ranch
in Crawford, Texas, and in November at the APEC summit in Santiago, Chile, with
all three occasions providing opportunities to discuss President Bush’s new
immigration proposal.
Bilateral Issues for Congress
Trade Issues
Trade between Mexico and the United States has grown dramatically in recent
years, encouraged by the adoption of the North American Free Trade Agreement
(NAFTA) between the United States, Mexico, and Canada. Total U.S. trade with
Mexico increased from $81.5 billion in 1993 to a high of $247.2 billion in 2000,but
then declined slightly in recent years, registering $220.3 billion in 2003. However,
the U.S. trade balance with Mexico has shifted from a surplus of $1.3 billion in 1994
to a generally growing deficit of $54.1 billion in 2003 (exports of $83.1 billion;
imports of $137.2 billion), in part because of the late 1994 devaluation of the peso
which made Mexican products cheaper. This change in the trade balance has caused
some Members of Congress to question the benefits of NAFTA. Despite the deficit,
Mexico is one of the fastest growing export markets for the United States in recent
years, and it became the second most important trading partner after Canada in 1999.
The NAFTA agreement was negotiated in 1991 and 1992, side agreements on
labor and environmental matters were completed in 1993; and the agreements were
approved by the respective legislatures in late 1993 and went into force on January
1, 1994. Under the agreements, trade and investment restrictions are being
eliminated over a 15-year period, with most restrictions eliminated in the early years
of the agreement. Over the years, Clinton Administration and Bush Administration
spokesmen have argued that NAFTA has been successful in increasing U.S. exports
to Mexico, particularly in heavily protected areas such as agricultural products, and
in promoting job creation and investment in both countries.
Functioning of NAFTA Institutions. Several NAFTA institutions
mandated by the agreements have been functioning since 1994. The tripartite

Commission on Environmental Cooperation (CEC) was established in Montreal,
Canada; and the Commission for Labor Cooperation (CLC) was established in
Dallas, Texas. In addition, the bilateral Border Environment Cooperation
Commission (BECC), located in Ciudad Juarez, Mexico; and the North American
Development Bank (NADBank), headquartered in San Antonio, Texas, were created
to promote and finance border environment projects along the U.S.-Mexico border.
Following up on a March 2002 agreement by Presidents Bush and Fox in Monterrey,
Mexico, to broaden the mandate of the NADBank, Congress agreed in March 2004
to permit the NADBank to make grants and nonmarket rate loans for environmental
infrastructure along the border, and the measure (H.R. 254) was signed into law (P.L.

108-215) on April 5, 2004.

The NAFTA institutions have operated to encourage cooperation on trade,
environmental and labor issues, and to consider nongovernmental petitions under the
labor and environmental side agreements. Under the labor side agreement, 28
petitions have been submitted alleging noncompliance by one of the NAFTA
countries with existing labor legislation, and 15 of these have been against Mexico,
although some of the cases against the United States involve working conditions and
compensation for migrant workers. Seven submissions against Mexico were
advanced to the next stage of ministerial consultations; two submissions were
essentially dropped on grounds that the workers who were fired in Mexico accepted
severance pay; two submissions were withdrawn, in one case when Mexico
recognized a union just before a scheduled hearing; one submission was rejected on
procedural grounds, although a study on reconciliation of the right to strike and
national interests was initiated; and one submission is pending.
In one case advanced to ministerial consultation, involving the dismissal of
workers for union organizing activities at a SONY electronics plant in Nuevo Laredo,
Mexico, the labor ministers agreed to a plan of action including meetings with the
affected workers, public seminars, and studies of union registration procedures. In
the case of alleged discrimination against pregnant Mexican workers in border
assembly (maquiladora) plants, ministerial consultations led to an implementation
agreement and a conference on the rights of working women. With regard to the
union association and health and safety issues in the Han Young maquiladora plant
in Tijuana and the Itapsa maquiladora plant in the state of Mexico, ministerial
consultations were held and led to trilateral seminars on the relevant issues. With
regard to the occupational safety and health issues in the Auto Trim/Custom Trim in
Tamaulipas, Mexico, ministerial consultations were held that led to the establishment
of a bilateral working group of experts on the relevant issues. The most recent cases,
filed in the United States and Canada in late September and early October 2003,
allege violations of workers’ rights in garment factories in Puebla, Mexico.
Under the trilateral CLC, the countries are cooperating in many areas, especially
occupational safety and rights of working women and children. Some argue that the
provisions have encouraged Mexico to enforce its own labor legislation. Others

argue that the provisions have been extremely weak and that numerous abuses
persist.³
Under the environmental side agreement, 26 petitions have been submitted
alleging non-compliance with environmental legislation, but only 9 of these have
involved Mexico. In a major case involving the environmental impact of the
construction of a cruise boat port in Cozumel, Mexico, the Council requested a
response from the Mexican government and after evaluation directed the CEC
Secretariat to prepare a full factual record on the case to highlight deficiencies. In
two cases involving pollution of the Magdalena River and Lake Chapala the Council
is reviewing the response from the Mexican government. In three recent cases the
Council has requested responses from the Mexican government; in another case the
complaint is still being reviewed; and another case was rejected on grounds that it did
not allege a violation of environmental law. The CEC is cooperating on many
environmental projects, including the North American Bird Conservation Initiative
to protect birds and conserve bird habitats; the Upper San Pedro River Initiative to
protect this Sonora-Arizona eco-system that is an important corridor for millions of
migratory birds; and the Sound Management of Chemicals Project to dramatically
reduce the use of PCBs, DDT, chlordane, mercury, and other pollutants.⁴
Recent Trade Disputes. The major trade disputes between the countries
involve the access of Mexican trucks to the United States, opening the Mexican
telecommunications sector to international long distance competition, the access of
Mexican sugar and tuna to the U.S. market, the access of U.S. sweeteners to the
Mexican market, and Mexico’s recently removed ban on U.S. beef products
following the discovery of mad cow disease.
With respect to trucking issues, the Mexican government objected to the Clinton
Administration’s refusal, on safety grounds, to allow Mexican trucks to have access
to U.S. highways under the terms of the NAFTA pact. A NAFTA dispute resolution
panel supported Mexico’s position in February 2001. President Bush indicated a
willingness to implement the provision, but the U.S. Congress required additional
safety provisions in the FY2002 Department of Transportation Appropriations Act
(P.L. 107-87). On November 27, 2002, with safety inspectors and procedures in
place, the Administration announced that it would begin the process that will open
U.S. highways to Mexican truckers and buses, but environmental and labor groups
went to court in early December to block the action. On January 16, 2003, the U.S.
Court of Appeals for the Ninth Circuit ruled that full environmental impact
statements were required before Mexican trucks would be allowed to operate on U.S.
highways. On June 7, 2004, the U.S. Supreme Court reversed the lower court
decision brought by environmental and labor groups and agreed with the Bush
Administration that an environmental impact statement is not required before
Mexican trucks may gain access to U.S. highways. On September 22, 2004, the

³ For more information on the functioning of this institution, see CRS Report 97-861,
NAFTA Labor Side Agreement: Lessons for the Worker Rights and Fast-Track Debate, by
Mary Jane Bolle.
⁴ For more information, see CRS Report 97-291, NAFTA: Related Environmental Issues and
Initiatives, by Mary Tiemann.

House approved 339-70 an amendment to the Transportation-Treasury
Appropriations (H.R. 5025) that would prohibit implementation of a rule allowing
Mexican and Canadian truck operators an additional two years to bring their trucks
into compliance with U.S. safety provisions, and this was eventually incorporated
into the Consolidated Appropriations Act for FY2005 (H.R. 4818/P.L. 108-447) that
was approved by Congress and the President in November-December 2004.
Regarding telecommunications issues, the United States filed a complaint with
the World Trade Organization (WTO) in August 2000, following previous warnings,
over Mexico’s failure to reduce Telmex’s continuing dominant position in the
telecommunications industry. A late December 2000 agreement between Telmex and
rival carriers Alestra and Avantel, under which Telmex agreed to lower
interconnection fees, was said to reduce the likelihood that the United States would
pursue the complaint with the WTO. However, the USTR’s April 2001 report on
telecommunication trade barriers cited Mexico for continued failure to open its long-
distance market to competition, and in mid-February 2002, it requested a WTO
dispute resolution panel to rule on the U.S. complaint. On March 12, 2004, the WTO
dispute panel issued its final report, generally upholding U.S. claims and finding that
Telmex interconnection fees were above what cost-oriented rates should be. On June
1, 2004, Mexico and the United States agreed to settle their dispute by adopting the
recommendations of the WTO panel.
With regard to sugar/sweetener issues, Mexico argues that it is entitled to ship
its net sugar surplus to the United States duty free under NAFTA, while the United
States argues that a sugar side letter negotiated along with NAFTA limits Mexican
shipments of sugar. Mexico also complains that imports of high fructose corn syrup
(HFCS) sweeteners from the United States constitute dumping, and it imposed anti-
dumping duties for some time, even though NAFTA and WTO dispute resolution
panels upheld U.S. claims that the Mexican government colluded with the Mexican
sugar and sweetener industries to restrict HFCS imports from the United States. In
the last days of 2001, the Mexican Congress imposed a 20% tax on soft drinks made
with corn syrup sweeteners to aid the ailing domestic cane sugar industry. President
Fox suspended the duties until September 30, 2002, in part because of U.S. objection
to the tax and the devastating impact on HFCS and corn sales from the United States,
but Mexico’s Supreme Court overturned his action. In late 2002, the Mexican
Congress extended the 20% tax on soft drinks made with HFCS.
During 2003, there were various efforts to achieve a compromise that would
increase Mexican exporters’ access to the U.S. sugar market and U.S. exporters’
access to the Mexican HFCS market, but no agreement was reached, and in late 2003
the Mexican Congress extended the 20% tax on soft drinks made with HFCS. In
October 2003, Corn Products International, Inc., based in Illinois, announced that it
was filing a claim for $325 million under NAFTA’s investment provisions against
Mexico for losses caused by the tax on HFCS-sweetened drinks, and Archer Daniels
Midlands (ADM) said that it was planning similar action for over $100 million in
damages. In November 2003, Senate Finance Committee Chairman Charles Grassley
introduced a bill (S. 1952) that would impose retaliatory tariffs on Mexican tequila
and other agricultural products unless Mexico rescinded the tax on HFCS products,
and in January 2004 he urged USTR to initiate WTO dispute settlement proceedings
against Mexico’s HFCS tax. On March 16, 2004, USTR announced that it was

initiating WTO dispute settlement proceedings against Mexico’s HFCS tax, and on
June 22, 2004, the United States formally requested that the WTO establish a dispute
settlement panel to consider the U.S. claims. In September 2004, the United States
and Mexico selected the panelists for the dispute settlement panel, although producer
groups are still hoping to achieve a negotiated settlement.
On tuna issues, the Clinton Administration lifted the embargo on Mexican tuna
in April 2000 under relaxed standards for a dolphin-safe label in accordance with
internationally agreed procedures and U.S. legislation passed in 1997 that encouraged
the unharmed release of dolphins from nets. However, a federal judge in San
Francisco ruled that the standards of the law had not been met, and the Federal
Appeals Court in San Francisco sustained the ruling in July 2001. Under the Bush
Administration, the Commerce Department ruled on December 31, 2002, that the
dolphin-safe label may be applied if qualified observers certify that no dolphins were
killed or seriously injured in the netting process, but Earth Island Institute and other
environmental groups filed suit to block the modification. On April 10, 2003, the
U.S. District Court for the Northern District of California enjoined the Commerce
Department from modifying the standards for the dolphin-safe label.
Mexico banned beef imports from the United States in December 2003
following the discovery of one cow infected with mad cow disease in Washington
state. In early March 2004, following the announcement of new U.S. procedures that
would exclude unhealthy or downer cattle from the food chain, Mexico announced
that it was resuming beef trade with the United States, with some restrictions, and it
expanded the list of eligible beef products in early April 2004.
With respect to other issues, both countries have alleged dumping of beef and
cattle; Mexico has alleged U.S. dumping of apples, cotton, and sorghum; and the
United States has alleged Mexican dumping of tomatoes and steel, although many of
these complaints have been resolved to some extent. Mexico as a NAFTA partner
was exempted from the Bush Administration’s imposition of temporary safeguard
tariffs on steel in March 2002. The United States has also claimed that Mexican
sanitary standards have posed barriers to U.S. exports, and that Mexico’s lax
enforcement has permitted widespread piracy of recording and software products.
Mexico has objected to U.S. sanctions against third countries with investments in
Cuba under the Cuban Liberty and Democratic Solidarity Act of 1996 (P.L. 104-114),
commonly called the Helms-Burton legislation.
In early October 2002, the U.S.-Mexico working group on agriculture dealt with
major agricultural issues, including Mexico’s recent anti-dumping decisions on
apples, rice, swine, and beef, and safeguard actions on potatoes. In January 2003, the
countries agreed to permit Mexican safeguard measures against U.S. imports of
chicken legs and thighs, and in July 2003, these safeguard measures were extended
until 2008, with tariffs declining each year. In October 2003, Mexico demanded
further consultations on a U.S. request for a WTO dispute panel to rule on Mexico’s
imposition of anti-dumping duties on U.S. beef and rice imports, but a panel was
formed in February 2004 and after a requested delay is expected to make a ruling in
March 2005. At the Binational Commission meetings in November 2004, the
countries announced agricultural agreements to advance cooperation on rural
development programs.

Migration\Border Issues
Nature of the Immigration Problem. The Immigration and Naturalization
Service (INS) estimated in early 2003 that there were 4.8 million undocumented
Mexican migrants residing in the United States in January 2000, accounting for
68.7% of the total estimated illegal alien population of 7.0 million. Mexico takes the
view that the migrants are “undocumented workers,” making the point that since the
U.S. market attracts and provides employment for the migrants, it bears some
responsibility. Mexico regularly voices concern about alleged abuses suffered by
Mexican workers in the United States, and for the loss of life and hardships suffered
by Mexican migrants as they utilize increasingly dangerous routes and methods to
circumvent tighter border controls. Mexico benefits from illegal migration in at least
two ways: (1) it is a “safety valve” that dissipates the political discontent that could
arise from higher unemployment in Mexico; and (2) it is a source of remittances by
workers in the United States to families in Mexico, estimated to be about $10 billion
per year.
One of the main U.S. mechanisms for controlling illegal immigration is the
Immigration Reform and Control Act of 1986 (P.L. 99-603). Main provisions of the
act include civil and criminal penalties for U.S. employers who knowingly hire
undocumented workers; increased border control and enforcement measures; anti-
discrimination safeguards; provision for legalization of illegal aliens who resided
continuously in the United States before 1982; and a special legalization for farm
workers previously employed on American farms.
In the face of criticisms that illegal aliens deprive American citizens of jobs and
are a growing burden on the educational, health, and welfare resources of certain
states, recent Administrations sought to control illegal immigration partly as a means
to preserve the program of legal immigration. Suits by the most affected states
(California, Florida, Texas, and Arizona) against the federal government, and the
passage in California in late 1994 of Proposition 187, which sought to deny health
and educational benefits to illegal aliens, stimulated additional state and federal
legislative proposals. Mexican authorities strongly criticized passage of Proposition

187, even though it was blocked by subsequent court action.

The Clinton Administration sought to control illegal entry into the United States
with improved technology and additional Border Patrol agents and INS inspectors,
using a strategy known as “prevention through deterrence,” modeled upon two border
initiatives, Operation Hold the Line in the El Paso area and Operation Gatekeeper in
the San Diego area. At the same time, Mexico and the United States formalized
consultations through the Border Liaison Mechanisms, issued a Binational Study on
Migration in 1997 that found that unauthorized migration carries costs for both
countries, and pursued a Border Safety Campaign to reduce violence on the border
through public information campaigns, search and rescue programs, and bilateral
cooperation.
Congress passed two major immigration reform measures in 1996 to control
illegal immigration and to limit the eligibility of aliens for federal programs. One
was the Illegal Immigration Reform and Immigrant Responsibility Act of 1996,
Division C of the Omnibus Consolidated Appropriations Act for FY1997 (H.R.

3610/P.L. 104-208). The other was the 1996 welfare law entitled the Personal
Responsibility and Work Opportunity Reconciliation Act of 1996 (H.R. 3734/P.L.
104-193). The first measure sought to control illegal immigration by adding 1,000
Border Patrol agents per year for five years (FY1997-FY2001), along with additional
personnel, equipment, and procedures. Both measures reduced the attractiveness of
immigration by restricting the eligibility of aliens for federal programs. (See CRS
Report 95-881, Immigration Legislation in the 104th Congress, by Joyce Vialet).
Congress also increased funding for the Immigration and Naturalization Service,
including the Border Patrol, through the regular Commerce, Justice, State, and
Judiciary Appropriations Acts, more than tripling INS’s budget from $1.5 billion in
FY1993 to $6.2 billion in FY2002. (For more details, see CRS Report RS20908,
Immigration and Naturalization Service’s FY2002 Budget.) With various groups,
including the AFL-CIO in February 2000, calling for amnesty for illegal immigrants
in the United States and a more lenient immigration policy, Congress considered
measures to increase the number of H-2A agricultural workers and to legalize the
status of undocumented aliens through registry and various forms of amnesty. (See
the following CRS reports by Ruth Ellen Wasem: CRS Report RL30780,
Immigration Legalization and Status Adjustment Legislation, and CRS Report
RL30852, Immigration of Agricultural Guest Workers: Policy, Trends, and
Legislative Issues.)
Bush Administration Initiatives. When President Bush met with President
Fox in mid-February 2001, migration issues were among the main topics, with
Mexican officials expressing concern about the number of migrants who die each
year while seeking entry into the United States. President Fox has been pressing
proposals for legalizing undocumented Mexican workers in the United States through
amnesty or guest worker arrangements as a way of protecting their human rights. In
the Joint Communique following the Bush-Fox meeting, the two presidents agreed
to hold cabinet-level negotiations to address migration and labor issues between the
countries. Several months later, on May 25, 2001, President Bush telephoned
President Fox to express condolences for the recent deaths of 14 Mexican migrants
in the Arizona desert, and both leaders reaffirmed their commitment to enhance
safety along the border and to continue to make progress on migration issues. Press
reports suggested that proposals to regularize the status of Mexican workers in the
United States were being considered by the Administration and by Congress, but
President Bush indicated that blanket amnesty would not be proposed.
During the opening day of President Fox’s official visit to Washington, D.C. in
early September 2001, he called for the two governments to reach agreement on
migration proposals by the end of the year. The Joint Communique at the end of the
meeting called for the countries to reach agreement as soon as possible on a range of
issues, including border safety, a temporary worker program, and the status of
undocumented Mexicans in the United States. However, following the September

2001 terrorist attacks, many policy makers called for tighter border controls.

During the Bush-Fox meeting in Monterrey, Mexico, on March 22, 2002, the
Presidents noted that important progress had been made to enhance migrant safety,
and they agreed to continue the cabinet-level talks to achieve safe, legal, and orderly
migration flows between the countries. In the press conference, President Bush

called for passage of legislation to extend the period for adjustment to legal status of
undocumented persons under Section 245(i) of the immigration act. The Presidents
also announced a U.S.-Mexico Border Partnership Action Plan with greater
cooperation and technological enhancements at the border and a “Partnership for
Prosperity” Action Plan with public-private initiatives to promote domestic and
foreign investment in less developed areas of Mexico with high migration rates.
During the cabinet-level Binational Commission meetings in Mexico City, on
November 25-26, 2002, Secretary of State Powell and Foreign Secretary Castaneda
reaffirmed the intention to continue talks toward a migration agreement.
Even so, in 2001 and 2002, most congressional action focused on strengthening
border security and alien admission and tracking procedures through the USA Patriot
Act of 2001 (P.L. 107-56), and the Enhanced Border Security and Visa Entry Reform
Act of 2002 (P.L. 107-173). With a similar security focus, the Homeland Security
Act of 2002 (P.L. 107-296), incorporated the INS/Border Patrol, Customs, and other
agencies into the new Department of Homeland Security, which officially began
operations on March 1, 2003.
In mid-May 2003, 19 migrants from Mexico and Central America died from
asphyxiation and heatstroke near Victoria, Texas, after being crammed into an
insulated trailer truck, and this incident prompted President Fox to appeal again for
U.S. action on an immigration accord. On June 3, 2003, U.S. and Mexican officials
announced a joint effort to save the lives of migrants by deploying more resources
in the desert regions and by taking more forceful measures against smugglers. On
October 20, 2003, President Bush and Fox met at the Asia-Pacific Economic
Cooperation (APEC) Summit in Bangkok, Thailand, and reaffirmed the desire to
continue the discussion on bilateral immigration issues, which were to be discussed
in the upcoming Binational Commission meetings on November 12, 2003.
In early 2004, President Bush seeking to revive the immigration discussion,
proposed an overhaul of the U.S. immigration system on January 7, 2004, to permit
the matching of willing foreign workers with willing U.S. employers when no
Americans can be found to fill the jobs. Under the President’s proposal, temporary
legal status would be available to new foreign workers who have work offers in the
United States and to undocumented workers already employed in the United States
for a term of three years that could be renewed but would end at some point. The
proposal includes some incentives to encourage workers to return to their home
countries, such as credit in the worker’s national retirement system and tax-deferred
savings accounts that could be collected upon return.⁵ A few days after his proposal,
President Bush met with President Fox in Monterrey, Mexico, for a Special Summit
of the Americas, and President Fox welcomed the Bush proposal as a very important
step forward. On January 20, 2004, President Bush called for passage of his
immigration reform proposal in the State of the Union address.

⁵ For information on the President’s proposal and the congressional initiatives, see CRS
Report RL32044, Immigration: Policy Considerations Related To Guest Worker Programs,
by Andorra Bruno.

Congressional initiatives in this area include S. 1387 (Cornyn) that would
establish new temporary foreign worker programs under agreements with foreign
countries; and S. 1645 (Craig)/H.R. 3142 (Cannon), the “AgJobs” Bill, that would
streamline the H-2A agricultural worker program, with provision for adjusting to
legal permanent resident (LPR) status. More comprehensive proposals that would
grant temporary legal status to foreign workers and to undocumented workers already
employed in the United States, with provision for adjusting to LPR status, include S.
1461 (McCain)/H.R. 2899 (Kolbe), S. 2010 (Hagel and Daschle); and S. 2381
(Kennedy)/H.R. 4262 (Gutierrez).
On March 5-6, 2004, President Fox visited President Bush at his ranch in
Crawford, Texas, and it was announced that Mexicans with border crossing cards
would be exempted from the end-of-the-year requirement to be photographed and
finger-scanned upon entry into the United States under the US-VISIT program.
Earlier, on February 19-20, 2004, Department of Homeland Security Secretary
Tom Ridge met with Mexican Government Secretary Santiago Creel in Mexico City
to review progress under the U.S.-Mexico Border Partnership. The two leaders
signed the U.S.-Mexico Action Plan for Cooperation and Border Safety for 2004, as
well as a Memorandum of Understanding on the Safe, Orderly, Dignified and
Humane Repatriation of Mexican Nationals. They also committed to develop six
new Secure Electronic Network for Traveler’s Rapid Inspection (SENTRI) lanes for
pre-screened, low-risk individuals, and to develop five new Free and Secure Trade
(FAST) lanes for pre-cleared cargo.
On July 22, 2004, the 9/11 Commission issued its final report, calling in one of
its recommendations for the United States to undertake major efforts to collaborate
with other governments in counter-terrorism efforts and to raise border security
standards. The separate House and Senate versions of S. 2845, passed in October
2004, to implement the 9/11 Commission recommendations, contained differing
measures to increase immigration law enforcement personnel and to adopt more
stringent border control and identity document standards.⁶ Some of the differing
provisions were among the most difficult to resolve in conference, however.
Eventually, after lengthy negotiations and an agreement to consider the left out
matters early in the 109^th Congress, the conferees agreed upon a report and bill
(H.Rept. 108-796) that was filed on December 7, 2004.⁷ The conference report was
approved by the House and the Senate on December 7 and 8, respectively, and was
signed into law (P.L. 108-458) as the Intelligence Reform and Terrorism Prevention
Act of 2004 by the President on December 17, 2004. The enacted legislation contains
provisions requiring more law enforcement personnel for enforcing immigration
laws, closer monitoring of the entry and exit of aliens, and standards for identification
documents and drivers’ licenses. Under a leadership agreement with certain
Representatives, it was agreed that three issues in the House bill that were dropped
in the conference report would be addressed early in the 109^th Congress, namely,

⁶ For more information, see CRS Report RL32616, 9/11 Commission: Implications for U.S.
Immigration Law and Policy, by Michael John Garcia and Ruth Ellen Wasem.
⁷ See Cleared Intelligence Rewrite is Big Finish for the 108^th, CQ Weekly, Dec. 11, 2004,
p. 2937.

provisions that would have banned the acceptance of Mexican consular ID cards by
federal officials, that would have prohibited the issuance of drivers’ licenses to
undocumented aliens, and that would have required the completion of a section of a
wall along the border with Mexico in California.
Following the November 2004 Binational Commission meetings, Secretary of
State Powell emphasized the growing bilateral cooperation on counter-narcotics and
border security matters between the countries, including the creation of a new
Working Group on Cyber-Security.
Drug Trafficking Issues
Nature of the Problem. Mexico remains a major supplier of heroin,
methamphetamine, and marijuana, and the major transit point for cocaine sold in the
United States. Although U.S.-Mexico counter-narcotics efforts have been marked
by distrust at times, with criticisms mounting in March of each year when the
President was required to certify that drug producing and drug transit countries were
cooperating fully with the United States, relations have been improving in recent
years. In the late 1990s, Congress acted to strengthen Border Patrol and international
interdiction efforts along the Southwest Border, introduced resolutions to disapprove
the certification of Mexico, and passed the Foreign Narcotics Kingpin Designation
Act (H.R. 1555/P.L. 106-120), which strengthened the President’s authority under
the International Emergency Economic Powers Act (IEEPA) to block the assets in
the United States of designated international drug traffickers. Following the July
2000 election of Vicente Fox as President of Mexico, bills were introduced but not
enacted to exempt Mexico from the drug certification requirements or to modify the
requirements.⁸
Executive-Legislative Actions. President Bush certified, on March 1,
2001, as previous presidents had done, that Mexico had been a fully cooperative
country in efforts to control drug trafficking. He cited the arrest of two key members
of the Tijuana-based Arellano Felix Organization, aggressive eradication programs,
and growing cooperation with the United States by the new Fox Administration. In
presidential meetings in 2001, Presidents Bush and Fox agreed to enhance law
enforcement and counter-narcotics cooperation, and President Fox called for reform
of the U.S. drug certification process. The Senate Foreign Relations Committee
reported out S. 219 in April 2001 and S. 1401 (Foreign Relations Authorization for
FY2002-FY2003) with similar language in August 2001 to modify the drug
certification process. Lacking action on these measures, the drug certification
requirements were temporarily modified in late 2001 by enactment of the Foreign
Operations Appropriations Act for FY2002 (H.R. 2506/P.L. 107-115). This measure
waived the drug certification requirements for FY2002 and required the President to
designate only countries that had demonstrably failed to meet international counter-⁹
narcotics obligations.

⁸ See CRS Report 98-174, Mexican Drug Certification Issues: U.S. Congressional Action,

1986-2002.

⁹ See CRS Report RL30892, Drug Certification Requirements and Congressional
(continued...)

The Bush Administration’s overall drug control policy, as articulated in
February 2002, seeks to prevent drug use before it starts through education and
community action, to provide adequate treatment resources for drug users, and to
disrupt the marketplace for drugs at home and abroad through eradication,
interdiction, and anti-money-laundering activities. The State Department’s March
2002 International Narcotics Control Strategy Report noted that Mexico’s efforts had
resulted in tangible successes against the three major drug cartels in the country —
the Arellano Felix Organization (AFO), the Carrillo Fuentes Organization (CFO),
and the Gulf Cartel. It also noted that the Fox Administration sustained the
aggressive eradication program carried out by past administrations and increased the
quantities of drugs seized. Later that month Mexican authorities announced the
arrest of drug lord Benjamin Arellano-Felix, the killing of his brother Ramon
Arellano Felix, and the arrest of Manuel Herrera Barraza, another key figure in the
Arellano Felix organization.¹⁰
During the Bush-Fox meeting in Monterrey, Mexico in March 2002, the
Presidents acknowledged “major successes achieved by Mexico in the fight against
narco-trafficking” and agreed on “the importance of redoubling judicial cooperation”
between the countries. On May 26, 2002, Jesus Albino Quintero Meraz and six
associates in the Juarez drug cartel were arrested in Veracruz, marking another
counter-narcotics success. On June 28, 2002, U.S. Drug Czar John Walters visited
Mexico City and praised Mexico’s counter-narcotics efforts.
In September 2002, Congress passed and the President signed the Foreign
Relations Authorization for FY2003 (H.R. 1646/P.L. 107-228), with Section 706 of
the act dealing with International Drug Control Certification Procedures. Drawing
from S. 1401, the new procedures require the President to make a report, not later
than September 15 of each year, identifying the major drug transit or major illicit
drug producing countries. At the same time, he is required to designate any of the
named countries that has “failed demonstrably,” during the previous 12 months, to
make substantial efforts to adhere to international counter-narcotics agreements
(defined in the legislation) and to take other counter-narcotics measures. U.S.
assistance would be withheld from any designated countries unless the President
determines that the provision of assistance to that country is vital to the national
interest of the United States or that the designated country subsequently made
substantial counter-narcotics efforts. Notwithstanding the general suspension of the
previous drug certification and sanctions procedures, subsection 706(5)(B) provides
that the President may apply those procedures at his discretion. A transition rule
provides that for FY2003, the required report was to be submitted at least 15 days
before foreign assistance funds are obligated or expended.
In November 2002, President Fox presented a tougher, more comprehensive,
multi-year National Drug Control Plan, which recognized Mexico’s growing drug
problem and the need for greater cooperation among agencies, while noting Mexican

⁹ (...continued)
Modifications in 2001-2002, by K. Larry Storrs.
¹⁰ See CRS Report RL31412, Mexico’s Counter-Narcotics Efforts under Fox, December

2000 to April 2002, by K. Larry Storrs.

successes against major drug traffickers. U.S. officials praised Mexico’s counter-
narcotics efforts when President Bush’s drug certification determinations were made
in late January 2003, under new procedures, and when the State Department issued
the International Narcotics Control Strategy Report in early March 2003. In mid-
March 2003, Mexican law enforcement authorities captured alleged drug kinpin Osiel
Cardenas-Guillen, reputed head of the Gulf Cartel. On June 20, 2003, the Mexican
Attorney General’s office announced that 31 soldiers had deserted the army to work
for the Gulf Cartel and offered rewards for information leading to their arrests. On
July 19, 2003, Mexican officials arrested Manuel Ruelas Martinez, the head of an
important money-laundering cell for the Arellano Felix cartel.
On July 31, 2003, Mexican and U.S. officials announced the dismantlement of
the Zambada Garcia drug cartel after a 19-month investigation that led to the arrest
of 240 people in Mexico and the United States and the seizure of significant
quantities of illicit drugs. On August 1, 2003, Mexican troops killed three suspected
drug smugglers in Nuevo Laredo after an armed confrontation. On September 15,

2003, when President Bush designated the worst offending countries in counter-

narcotics efforts under the new certification and designation procedures, there was
no mention of Mexico. In a troubling development, in late January 2004, a number
of Mexican state police officers were being held in the border state of Chihuahua on
suspicion of involvement with drug traffickers in the killing of 11 men from rival
drug gangs.
According to the State Department’s March 2004 International Narcotics
Control Strategy Report (INCSR), Mexico is the transit point for about 70% of the
cocaine entering the United States, the leading foreign source of marijuana, one of
two major suppliers of heroin, and a major producing and transit country for
methamphetamine and other synthetic drugs. Despite Mexico’s major role as a
producing and transit country, the Fox Administration was credited with carrying out
major efforts to eradicate and seize illicit drugs, with achieving tangible results
against drug trafficking organizations, and with providing unprecedented cooperation
with the United States. The State Department reported in April 2004, however, that
marijuana cultivation increased 70% and opium poppy cultivation increased 78% in
Mexico in 2003, in part because of unusually favorable growing conditions.¹¹
In recent law enforcement actions with U.S.-Mexico cooperation, alleged
Central American drug trafficker Otto Herrera-Garcia was arrested in Mexico on
April 21, 2004, on drug trafficking charges, and Mexican national Jaime Ross-
Castillo was arrested in Mexico on the same day on money-laundering charges.
Later, Efrain Perez and Jorge Arellano Felix, two alleged lieutenants of the Arellano-
Felix Organization (AFO) drug cartel, were arrested in Mexico on June 3, 2004. Still
later, Ramiro Hernández, an alleged leader of the Gulf drug cartel, was arrested on
August 10, 2004, and Gilberto Higuera Guerrero, an alleged leader of the Sinaloa
drug cartel, was arrested on August 22, 2004. On October 19, 2004, DEA officials
announced the dismantling through, Operation Money Clip, of a major Mexican
money-laundering and drug trafficking organization operating in the United States.

¹¹ For more detail, see CRS Report RL32669, Mexico’s Counter-Narcotics Efforts under
Fox, December 2000 to October 2004, by K. Larry Storrs.

On November 24, 2004, the U.S. Treasury added the names of six leaders of the
Arellano Feliz Organization, a Mexican narcotics cartel, to the list of persons subject
to economic sanctions and restrictions under the Foreign Narcotics Kingpin
Designation Act.
Political and Human Rights Issues
Concerns over Elections and Political Rights. Over the years, major
attention has focused on the fairness of elections in Mexico because the Institutional
Revolutionary Party or PRI controlled the presidency until 2000, all gubernatorial
posts until the 1990s, and had solid control of the two chambers of the Mexican
Congress until 1997, although the PAN had made progress in capturing control of
major cities for several decades.
Following the controversial July 1988 presidential election, President Salinas
proposed and Congress approved three electoral reforms. In subsequent years,
opposition governors were elected in several states, and nationwide mid-term
legislative elections in August 1991 were considered to be generally fair.
Presidential and legislative elections were held under peaceful conditions on August
21, 1994, with Ernesto Zedillo of the long-ruling PRI winning the presidency with
50.18% of the valid votes. In subsequent local elections, the opposition PAN won
governorships in many states, particularly in the period following the 1995-1996
period of financial crisis and austerity.
In late July 1996, the parties agreed on major electoral reforms for the July 1997
legislative and local elections. These included the direct election of the mayor of the
Mexico City Federal District, access to the media, and controls on campaign
spending. On July 6, 1997, Mexico held nationwide midterm legislative elections
along with gubernatorial contests in 6 states and the first direct election of the Mayor
of the Mexico City Federal District. Although the Zedillo-supported PRI remained
the single largest party, it lost its long-held majority in the Chamber of Deputies, it
lost the two-thirds majority in the Senate, it lost two of the six governorships, and it
lost the all-important race for Mayor of Mexico City. This prompted observers to
suggest that the system was becoming more pluralistic and that passage of legislation
would require more negotiation among the parties.
In the period leading to the July 2000 elections, former Government Minister
Francisco Labastida was selected as the candidate of the PRI in an open nation-wide
primary. Efforts by the PAN and the PRD to agree on a common candidate for the
opposition came to an impasse, and former Governor of Guanajuato Vicente Fox was
designated as the presidential candidate for the PAN, and former mayor of the
Mexico City Federal District Cuauhtemoc Cardenas was designated as the
presidential candidate for the PRD. On July 2, 2000, Vicente Fox of the Alliance for
Change (PAN/PVEM) was elected President with 42.52% of the vote, marking the
first election of a president from an opposition party in 71 years and erasing many¹²
doubts about the fairness of elections.

¹² For more detail, see CRS Report RS20611, Mexico’s Presidential, Legislative, and Local
(continued...)

In other elections in 2000, a coalition of opposition parties (PAN, PRD, etc.)
won the governorship in the state of Chiapas in August 2000, the PRI won a majority
in municipal and state legislature elections in the state of Veracruz in September
2000, the PRI won a governorship in disputed elections in the state of Tabasco in
October 2000 (subsequently annulled by the Federal Electoral Tribunal), and the
PAN won a governorship in a close race in the state of Jalisco in November 2000.
After intervention by the Federal Electoral Tribunal to ensure the neutrality of the
State Electoral Council in Yucatan, the candidate of the PAN-PRD coalition won the
governorship of Yucatan in June 2001. The PRI won the governorship in Tabasco
in the re-run election in August 2001, ending a string of PRI defeats in southern
states.
In still other elections, on July 1, 2001, the PRI won control of the state
legislature and most municipalities in the state of Chihuahua but initially lost to the
PAN in a disputed mayoral election in the major border city of Ciudad Juarez. On
July 8, 2001, the PAN demonstrated continuing dominance in Baja California,
winning the governorship, 4 of 5 mayoral races, and 14 of 16 seats in the state
legislature. On November 11, 2001, PRD candidate Lazaro Cardenas, the scion of
a famous family, won the gubernatorial election in the bastion state of Michoacan.
The election in Ciudad Juarez was subsequently annulled by the Federal Electoral
Tribunal on grounds that the PAN had illegally run political campaign ads in El Paso,
Texas, on the U.S. side of the border.
The re-run of the election was held on May 12, 2002, with many observers
looking to the election for signs of the strength of the PAN and the PRI under new
leadership. Official results showed the PAN winning the election again, and after
investigation of alleged irregularities, the State Electoral Tribunal upheld the PAN
victory. In local elections in Nayarit on July 7, 2002, the PRI recaptured 14 of 18
posts and a majority in the state legislature previously won by a PAN-PRD coalition.
The PRI also retained pluralities in local elections in Coahuila, Guerrero, and
Hidalgo held respectively in September, October and November 2002.
On March 9, 2003, in important and highly disputed local elections in the
populous state of Mexico, which surrounds the Federal District, the PRI, in alliance
with the PVEM, extended its legislative plurality in the state, which some saw as an
omen for the coming congressional elections.
On July 6, 2003, Mexico held nation-wide elections to renew the membership
of the 500-seat Chamber of Deputies, and to elect local officials in ten states.
Official results indicate that President Fox’s conservative National Action Party
(PAN) fared poorly, winning only 31% of the seats in the Chamber and two of the
six governorships in contention. The previously long-ruling centrist Institutional
Revolutionary Party (PRI) secured a dominant position in the Chamber with 45% of
the seats, and it won four of the six gubernatorial races, while the leftist Party of the

¹² (...continued)
Elections of July 2, 2000, by K. Larry Storrs.

Democratic Revolution (PRD) increased representation in the Chamber to 19% of the
seats, and consolidated local control in the Mexico City Federal District.¹³
In 2003, the IFE assessed steep fines against the two largest parties in the
country for irregularities in campaign financing during the 2000 presidential election.
In February 2003, the IFE assessed a fine against the PRI for illegally receiving funds
for the 2000 campaign from the union of the Mexican petroleum monopoly (Pemex).
In October 2003, the IFE assessed fines against the PAN and the PVEM for illegally
receiving foreign contributions from the Amigos de Fox (Friends of Fox)
organization in the 2000 campaign. In April 2004, the IFE imposed major fines upon
all of Mexico’s political parties for irregularities during the July 2003 Chamber of
Deputies election, including five whose registry expired because of inadequate voting
support, for exceeding campaign spending limits and other violations of law.
In 2004, considerable attention has focused on the state and municipal elections
in a number of states. In local elections in the state of Yucatan on May 16, 2004, the
PAN won in 50 municipalities, including the capital city of Mérida, while the PRI
won 50 and the PRD won 5 municipalities. In the state assembly, the PAN will have
13 deputies, the PRI will have 10, and the PRD will have 2. In state elections in
Chihuahua, Durango, and Zacatecas on July 4, 2004, the PRI in alliance with the
PVEM and the PT retained the governorships in Chihuahua and Durango, while the
PRD in alliance with PAN retained control in Zacatecas. In state elections on August
1, 2004, the PRI won the mayoral race in the northern border city of Tijuana and
claimed victory in the gubernatorial race in southern Oaxaca state where the result
was contested, while the PAN won the gubernatorial election in Aguascalientes. On
September 5, 2004, the PRI won the governorship in Veracruz in disputed elections,
and on October 3, 2004, the PRI generally won in municipal elections in Oaxaca and
Chiapas, winning control of several major cities previously controlled by the PAN.
Allegations of Human Rights Abuses. Charges of human rights abuse in
Mexico, cited by human rights groups and the State Department’s annual reports,
include allegations of torture, harassment, and extra-judicial killings by law
enforcement agents, and threats against journalists and human rights monitors. Other
abuses include prison deficiencies, discrimination against women and indigenous
peoples, and extensive child labor in the informal sector.
President Zedillo took a number of steps to deal with these abuses, including
continuing support for the National Human Rights Commission. He named Antonio
Lozano of the opposition PAN as Attorney General in 1994 and ordered him to carry
out a major reform of the judicial and law enforcement system to eliminate
corruption and human rights abuse. Judicial reform was approved in December
1994, increasing the independence and autonomy of the Supreme Court and of the
Attorney General’s Office. Under Zedillo, major attention focused on the December
1997 killing of 45 indigenous peasants in the village of Acteal in the state of Chiapas
by armed men said to be linked to the PRI. President Zedillo urged prompt
prosecution, and, eventually 77 persons were convicted and imprisoned.

¹³ For more detail, see CRS Report RS21561, Mexico’s Congress and July 2003 Elections,
by K. Larry Storrs.

President Fox, even before taking office, appointed well known human rights
activist Mariclaire Acosta as a Special Ambassador for Human Rights, and Mexican
spokesmen have asserted that Mexico will be open to visits by human rights
organizations and foreign visitors and will take strong human rights positions.
Immediately after his inauguration, President Fox signed an agreement with the
United Nations to provide technical assistance on human rights. The killing of
human rights lawyer Digna Ochoa y Placido on October 19, 2001, raised questions
about the government’s human rights policies, and prompted calls for prompt action
by the government from domestic and foreign human rights organizations. Criticism
has also been expressed over the government’s allegations in May and June 2002
and again in July 2003 that her death may have been a suicide. President Fox freed
two well known Mexican environmentalists that Digna Ochoa had represented and
defended, namely Rodolfo Montiel and Teodoro Cabrera, on November 8, 2001.
The National Commission on Human Rights presented a report to President
Fox, on November 27, 2001, that documented human rights abuses and
disappearances of persons in the 1970s and early 1980s, and President Fox named
legal scholar Ignacio Carrillo as a Special Prosecutor to investigate these and other
cases on January 4, 2002. President Fox ordered the release from prison of General
Jose Francisco Gallardo on February 9, 2002, but did not pardon him, despite the fact
that human rights groups argue that his conviction in military courts for theft and
corruption was fabricated because of his advocacy of a human rights ombudsman for
the Mexican military. On May 31, 2002, 26 indigenous peasants were killed in an
incident in southern Oaxaca, and 15 men and one woman were arrested in early June
2002 for the killings that were purportedly motivated by longstanding land disputes
in the area. In June 2002, President Fox signed a new Freedom of Information Act
for Mexico, and released secret government archives. In late September 2002,
Mexican army officers General Mario Arturo Acosta and Francisco Quiros, both
already in prison on drug trafficking charges, were charged, along with retired Major
Francisco Javier Barquin, with homicide for the killings of 143 anti-government
activists in the 1970s.
On March 24, 2003, authorities charged Luis de la Barreda Moreno, the former
head of the now disbanded secret police, with torture and murder of alleged guerrilla
leader Jesus Piedra Ibarra in the mid-1970s. The State Department’s March 2003
human rights report on Mexico states that Fox Administration efforts to improve the
human rights situation continues to meet with limited success in many areas.
Although a number of suspects have been arrested for involvement in the past abuses,
Human Rights Watch issued a report in late July 2003 arguing that the special
prosecutor has failed to produce significant results, and that the office has received
inadequate support from the government. Critics argue that the government is
reluctant to press human rights issues while courting support from the long-ruling
PRI, and they point to the elimination, in early August 2003, of the position of
Special Ambassador for Human Rights as evidence.
In late January 2004, President Fox named a special prosecutor to coordinate the
federal and state efforts to find and punish those responsible for a decade of slayings
of over 300 women in Ciudad Juarez, across the border from El Paso, Texas. On
February 18, 2004, the former chief of Mexico’s secret police, Miguel Nazar Haro,
was arrested and charged with the torture and murder of alleged guerrilla leader Jesus

Piedra Ibarra in the mid-1970s. The State Department’s March 2004 report on
human rights conditions in Mexico notes that the government’s efforts to improve
the human rights situation appeared to stall, with a few exceptions. On July 24,
2004, a Mexican judge refused the special prosecutor’s request for an arrest warrant
against former President Luis Echeverria for involvement in a 1971 massacre, on
grounds that the statute of limitations had expired. On December 10, 2004, President
Fox, responding to an analysis by the U.N. High Commission for Human Rights,
presented a series of proposed human rights reforms that would discourage torture
and strengthen the rights of defendants in Mexico.
Legislation
Foreign Relations Authorization for FY2004-FY2005
(H.R. 1950/S. 2144): Provisions Relating to Mexico
The House passed H.R. 1950 on July 16, 2003, with several provisions relating
to Mexico, but no further action was taken. The House-passed measure included a
modified version of a sense of the Congress provision on a possible bilateral
migration accord with Mexico, two amendments stating the sense of Congress on
joint pollution control on the border and on Mexican extradition policy, and
restrictions on Mexico’s issuance of consular identification cards. No similar
provisions were in the bill (S. 925) considered by the Senate on July 9-10, 2003. The
Senate did approve an amendment to S. 925 authorizing $100 million to support rural
development in Mexico, but action was not completed on the bill. The Senate
Foreign Relations Committee reported out a new bill (S. 2144) on March 18, 2004,
with no provisions relating to Mexico.
Migration Accord. As indicated above in the section on immigration, the idea
of a migration accord has been advanced by President Fox and by President Bush at
presidential meetings beginning in 2001. When the House International Relations
Committee marked up H.R. 1950 on May 8, 2003 (H.Rept. 108-105, Part 1),
Representative Menendez offered an amendment that, in modified form, became
Section 731. The initial amendment recounted the recent commitments on migration
matters by the two governments as findings, and stated the sense of Congress that the
United States should reach an agreement with Mexico on a migration accord that
would ensure that migration to the United States is “safe, orderly, legal, and
dign ified.”
Arguing that the Menendez provision was too broad, Representative Ballenger
offered a substitute amendment, subsequently approved 24-22, that stated the sense
of Congress that a Mexico-U.S. migration agreement should address the key issues
of concern for both nations, and should include an accord to open Mexico’s state-run
petroleum monopoly (PEMEX) to reform and to investment by U.S. oil companies.
It also added a finding that PEMEX “is inefficient, plagued by corruption and in need
of substantial reform and private investment in order to provide sufficient petroleum
products to Mexico and the United States to fuel future economic growth which can
help curb illegal migration into the United States.”

Representative Gallegly, expressing concern about fugitives from U.S. justice
that Mexico will not extradite, offered an amendment to the Ballenger substitute
measure, which was approved by unanimous consent, that the issues of extradition
and law enforcement cooperation should be addressed in any migration agreement
between the countries. In sum, Section 731, as reported, stated the sense of Congress
that the United States should as soon as practicable commence negotiations to reach
a migration accord with Mexico that addresses the key issues of concern in both
countries, that opens PEMEX to reform and investment by U.S. oil companies, and
that addresses extradition and law enforcement issues.
Mexican officials and commentators criticized the Committee-reported
provisions related to PEMEX and extradition as an intrusion in the domestic affairs
of Mexico. The Office of the Mexican Presidency issued a statement on May 11,
2003, acknowledging that the negotiation of a migration agreement was a priority
for the Fox Administration, but pointing out that “negotiating such an agreement in
exchange for opening up Petróleos Mexicanos (the state oil industry, PEMEX) to
foreign investment would be wholly unacceptable.” The statement further asserted
that “major changes have been undertaken at PEMEX to modernize its infrastructure
and make its management transparent, and thus guarantee that oil shall remain in
Mexican ownership.”
During floor consideration on July 15, 2003, the House approved, as part of an
en bloc amendment, an amendment proposed by Representative David Dreier, as
modified by House International Relations Committee Chairman Henry Hyde. The
amendment, which became Section 730, removed the previously mentioned
references to PEMEX and stated the sense of Congress that the United States and
Mexico should conclude negotiations in an attempt to reach a migration accord. It
further stated that the accord should be as comprehensive as possible and should
address the key issues of concern for both nations; it stated that, as part of any
agreement, the issues of extradition and law enforcement cooperation be addressed.
Pollution Control. During floor consideration on July 15, 2003, the House
approved, as part of an en bloc amendment, an amendment proposed by
Representatives Hunter, Cunningham, Davis, and Filner, that became Section 740.
It expressed the sense of Congress that the U.S. Section of the International Boundary
and Water Commission should give priority attention to treaty negotiations with
Mexico on the building of a public-private wastewater treatment facility in Mexico
that can treat sewage flowing from Tijuana to San Diego, as outlined in P.L. 106-457.
The amendment recounted in the findings the damage to San Diego beaches and the
three-year delay in negotiations and it required that monthly progress reports be
submitted to appropriate congressional committees.
Extradition Issues. During floor consideration on July 15, 2003, the House
approved Amendment 27 proposed by Representative McKeon that expresses in
Section 744 the sense of Congress that the U.S. government should encourage the
Mexican government to work closely with the Mexican Supreme Court to persuade
the Court to reconsider its October 2001 ruling so that the possibility of life
imprisonment in the United States will not have an adverse effect on the timely
extradition of criminal suspects from Mexico to the United States.

Consular ID Cards. In floor action on July 15, 2003, the House voted 226-
198 to accept Amendment 17 by Representative John Hostettler that would establish
in Section 232 a series of restrictions on the issuance of consular identification cards
by foreign missions. In recent years, the Mexican consulates have been issuing
matrícula consular cards for identity purposes, and they have been increasingly
accepted in the United States in situations where proof of identity is required, such
as for establishing banking accounts and obtaining credit cards and transferring funds
from the United States to Mexico. Critics argue that the cards are used primarily by
illegal aliens seeking to obtain benefits not achieved through regular immigration law
and procedures, and that they might facilitate money-laundering and terrorist activity.
The amendment would have required that foreign missions issue consular
identification cards only to bona fide citizens of the country as verified by birth
certificates, voter IDs, and passports; that card recipients be required to notify the
mission of any change of address; that automated records be kept by the missions to
prevent duplicate or fradulent issuance; that records be subject to audit by the United
States; and that the United States be notified of each issuance, including the name
and address. In the event that a foreign mission has issued consular ID cards in
violation of these provisions, it could be required to suspend the issuance of cards;
and in the event of noncompliance, the State Department would suspend the issuance
of immigrant or nonimmigrant visas, or both, to nationals of that country until it was
in compliance with the requirements. Supporters of the amendment argued that the
issuance of the cards was out of control and needed to be controlled. Opponents
argued that it was an attack on the Mexican identity card and persons of Hispanic
heritage, and that the requirements were onerous and excessive.
Rural Development. When the Senate considered S. 925 on July 10, 2003,
it adopted an amendment offered by Senator Reid to provide $100 million in
assistance to Mexico to deal with the existing rural development crisis in the country.
The Senate did not complete action on S. 925 in 2003, and there is no similar
provision in the Senate bill (S. 2144) reported out by the Senate Foreign Relations
Committee in March 2004.
Authorizing Amendment of Mandates of Border Environment
Cooperation Commission and North American Development
Bank (H.R. 254 / P.L. 108-215)
H.R. 254 was introduced on January 8, 2003, to authorize amendment of the
mandates of the jointly established Border Environment Cooperation Commission
(BECC) and the North American Development Bank (NADBank). The authorized
amendments would permit the NADBank to make grants and below-market-rate
loans in the U.S.-Mexico border region, with the defined border region being
expanded to extend to 300 kilometers into Mexico from the border, while remaining
100 kilometers on the U.S. side. This was in keeping with a March 2002 agreement
by Presidents Bush and Fox in Monterrey, Mexico, to broaden the mandate of the
NADBank and to expand its loan portfolio, especially in support of water
conservation projects. The House approved a similar bill (H.R. 5400) in October
2002, but action was not completed in the Senate. H.R. 254 was approved by the
House under suspension of rules on February 26, 2003; it was approved by
unanimous consent by the Senate on March 12, 2004,with an amendment limiting the

amount of funding for any one project; and it was approved by the House as amended
under suspension of rules on March 25, 2004. The measure was signed into law (P.L.

108-215) on April 5, 2004.

Transportation-Treasury Appropriations for FY2005 (H.R.
5025 and H.R. 4818/P.L. 108-447): Provision Relating to
Mexican Matrícula Consular Cards
The House approved the Transportation-Treasury Appropriations for FY2005
(H.R. 5025) on September 22, 2004, with a number of amendments. Among the
approved amendments was the Oxley-Frank amendment that restored funding for
Treasury Department implementation of regulations established in May 2003 that
permit financial institutions to accept the consular identification cards (matrícula
consular) issued by Mexican consulates to Mexican citizens in the United States as¹⁴
a valid identity document for opening a bank account.
The House Transportation-Treasury Appropriations Subcommittee voted 9-7,
on July 15, 2004, to approve an amendment by Representative John Culberson to
prohibit the use of funds by the Secretary of the Treasury “to publish, implement,
administer, or enforce regulations [established in May 2003] that permit financial
institutions to accept the matrícula consular identification card as a form of
identification.” Representative Culberson claimed that his amendment had the
support of the Department of Homeland Security, the FBI, the Justice Department,
and a U.S. Attorney in Texas. He argued that the amendment was aimed at ending
the use of a totally unreliable form of identification that could be obtained by
criminals and terrorists. Those opposing the amendment argued that the consular
cards were safe and that the Subcommittee was acting precipitously and without
adequate information.¹⁵
The full Appropriations Committee approved the overall measure on July 22,
2004, after voting 25-26 to defeat an amendment by Representative Ed Pastor that
would have stricken the language of the Culberson amendment described above.
This action left intact the previously approved prohibition on Treasury funding for
implementation of regulations permitting financial institutions to accept the matrícula
consular cards. Representative Culberson argued that the cards are unreliable and
could be used by terrorists to falsify their identities. Representative Pastor and others
argued that the cards were reliable and that the Department of Homeland Security
could write regulations to deal with their concerns, without blocking the use of the¹⁶

cards for financial transactions.
¹⁴ For more detail on the controversy related to these cards, see CRS Report RL32094,
Consular Identification Cards: Domestic and Foreign Policy Implications, the Mexican
Case, and Related Legislation, by Andorra Bruno and K. Larry Storrs.
¹⁵ See House Subcommittee Targets Elimination of Mexican ‘Matricula’ ID Cards, CQ
Today, July 15, 2004; and Appropriations: As House Subcommittee Trims Amtrak, IRS,
Enforcement, Congress Daily, July 15, 2004.
¹⁶ See Transportation-Treasury Appropriations: Mexican Identity Card Provision
(continued...)

When the House considered the Transportation-Treasury Appropriations for
FY2005 (H.R. 5025) on September 14, 2004, Representatives Oxley and Frank,
Chairman and Ranking Member of the House Committee on Financial Services,
offered an amendment to strike the Culberson amendment described above, thereby
restoring funding for the Treasury Department to continue to implement regulations
on identity cards for banking services in effect since May 2003. The sponsors of the
amendment argued that the existing regulations were working effectively and that
they had the support of the Administration. Opponents of the amendment argued that
the Treasury regulations were too lax in that they permitted the use of documents that
are easily forged, that might be used by terrorists, and that are largely used by persons
who are illegally in the United States. After consideration of other amendments, the
overall measure was passed by the House on September 22, 2004, thereby restoring
previous authorities with respect to consular ID cards. Eventually the Transportation-
Treasury Appropriations Act was incorporated into the Consolidated Appropriations
Act for FY2005 (H.R. 4818) that was approved by both houses of Congress on
November 20, 2004, and, after passage of a corrective measure, was signed into law
(P.L. 108-447) on December 8, 2004.
Transportation-Treasury Appropriations for FY2005 (H.R.
5025 and H.R. 4818/P.L. 108-447): Provision Relating to
Safety Standards for Mexican Trucks
When the House passed the Transportation-Treasury Appropriations for FY2005
(H.R. 5025) on September 22, 2004, it approved 339-70 an amendment by
Representative Olver that would prohibit implementation of an Administration rule
allowing Mexican and Canadian truck owners and operators an additional two years
to bring their trucks into compliance with U.S. safety provisions. The sponsor argued
that the carriers have had 30 months to bring the trucks up to standards and should
not be given additional time. Eventually the Transportation-Treasury Appropriations
Act was incorporated into the Consolidated Appropriations Act for FY2005 (H.R.

4818/P.L. 108-447) that was approved by Congress and the President in November-

December 2004.
Intelligence Reform and Terrorism Prevention Act of 2004 (S.
2845/P.L. 108-458): Provisions Relating to Mexico
The versions of S. 2845, to reform intelligence operations and to implement the

9/11 Commission recommendations, that were passed by the Senate on October 6,

2004, and by the House on October 16, 2004, contained a number of immigration,

border, and identity document provisions that would have implications for Mexico,
especially those in the House-passed version, but some of those provisions were
among the most difficult to resolve in conference. Eventually, after extended
negotiations, an agreed conference report (H.Rept. 108-796) and bill were filed on
December 7, 2004, with an agreement that some of the difficult issues would be
addressed early in the 109^th Congress. The conference report was approved by the

¹⁶ (...continued)
Complicates Debate on Bill, CQ Today, July 22, 2004.

House and the Senate on December 7 and 8, respectively, and was signed into law
(P.L. 108-458) by the President on December 17, 2004. The enacted legislation
contains provisions requiring more law enforcement personnel for enforcing
immigration laws, closer monitoring of the entry and exit of aliens, and standards for
identification documents and drivers’ licenses. Under a leadership agreement with
certain Representatives, it was agreed that three issues in the House bill that were
dropped in the conference report would be addressed early in the 109^th Congress,
namely, provisions that would have banned the acceptance of Mexican consular ID
cards by federal officials, that would have prohibited the issuance of drivers’ licenses
to undocumented aliens, and that would have required the completion of a section of
a wall along the border with Mexico in California.
For Additional Reading
CRS Products
CRS Report RL32616. 9/11 Commission: Implications for U.S. Immigration Law
and Policy, by Michael John Garcia and Ruth Ellen Wasem.
CRS Report RL32094. Consular Identification Cards: Domestic and Foreign Policy
Implications, the Mexican Case, and Related Legislation, by Andorra Bruno and
K. Larry Storrs.
CRS Report RL32038. Drug Certification/Designation Procedures for Illicit
Narcotics Producing and Transit Countries, by K. Larry Storrs.
CRS Report RL30892. Drug Certification Requirements and Congressional
Modifications in 2001-2002, by K. Larry Storrs.
CRS Issue Brief IB88093. Drug Control: International Policy and Options, by
Raphael Perl.
CRS Report RL32169. Immigration Legislation and Issues in the 108^th Congress,
by Andorra Bruno, Coordinator.
CRS Report RL32044. Immigration: Policy Considerations Related to Guest
Worker Programs, by Andorra Bruno.
CRS Report RL31386. Industry Trade Effects Related to NAFTA, by M. Angeles
Villarreal.
CRS Report 98-174. Mexican Drug Certification Issues: U.S. Congressional Action,

1986-2002, by K. Larry Storrs.

CRS Report RL31412. Mexico’s Counter-Narcotics Efforts Under Fox, December

2000 to April 2002, by K. Larry Storrs.

CRS Report RL32669. Mexico’s Counter-Narcotics Efforts Under Fox, December

2000 to October 2004, by K. Larry Storrs.

CRS Report RL31412. Mexico’s Congress and July 2003 Elections, by K. Larry
Storrs.
CRS Report RS20611. Mexico’s Presidential, Legislative, and Local Elections of
July 2, 2000, by K. Larry Storrs.
CRS Report 97-861. NAFTA Labor Side Agreement: Lessons for the Worker Rights
and Fast-Track Debate, by Mary Jane Bolle.
CRS Report 97-291. NAFTA: Related Environmental Issues and Initiatives, by Mary
Tiemann.