compensatory policy to address poverty through its Oportunidades program (formerly known as
Progresa). This program provides cash transfers to families in poverty who demonstrate that they
regularly attend medical appointments and can certify that children are attending school.
program has been successful in bringing more economic stability to the country and reducing
s productivity and may not be a long-term solution.
Some argue that such programs result in a dependence for cash transfers and do not help poor
Implications for U.S. Interests
s numerous free trade agreements and its trade liberalization policy are of interest to U.S.
policymakers because of the implications for U.S.-Mexico trade, economic stability in Mexico,
conditions in Mexico are important to the United States because of the proximity of Mexico to the
United States, the close trade and investment interactions, and other social and political issues.
s FTAs on U.S. exports to
Mexico. The liberalization of Mexico
resulted in increasing competition for U.S. goods and services in the Mexican market. However,
trade flows are also affected by other factors such as exchange rates, economic growth, and
investor confidence, and it is difficult to isolate these effects.
have brought economic and social benefits to the Mexican economy as a whole, the benefits have
not been evenly distributed throughout the country. Wages and employment tend to be higher in
states experiencing higher levels of FDI and trade. In terms of regional effects, initial conditions
in Mexico determined which Mexican states experienced stronger economic growth as a result of
trade liberalization. States with higher levels of telecommunications and transportation
infrastructure gained more benefits than poorer states with lower levels of education,
infrastructure, and institutional capacity. This affects the United States because Mexican workers
United States to seek jobs.
To address issues affecting trade, U.S. policymakers may consider closer cooperation with
Mexico to develop complementary policies to ensure that all segments of the two countries
benefit from economic integration. The United States and Mexico, along with Canada, have
increased cooperation on economic and security issues, but there may be additional options that
could be considered by both countries.
institutional strengthening to benefit more fully from freer trade. A possible
issue is to create a bilateral or trilateral fund for development that focuses on building
infrastructure, improving education and human capital, and creating more opportunities for
research and development. U.S. and Mexican policymakers have informally talked about
expanding the mandate of the North American Development Bank (NADBank).
Members of the U.S. Congress and elected officials from Mexico have discussed the possibility
of expanding the mission of the NADBank to go beyond environmental and border issues and
consider creating an infrastructure fund that would be managed by NADBank to provide
investment in infrastructure, communications, or education.
See CRS Report RS22701, Security and Prosperity Partnership of North America: An Overview and Selected Issues
NADBank and its sister institution, the Border Environment Cooperation Commission (BECC), were created under a
bilateral side agreement to NAFTA called the Border Environmental Cooperation Agreement (BECC) to address
environmental infrastructure problems along the U.S.-Mexican border.