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This report presents an overview of the Armenia-Azerbaijan conflict. This is a clash between the principles of territorial integrity and self-determination that is occurring in the Caucasus, creating the longest inter-ethnic dispute in the former Soviet Union. The report includes the background and analysis of history, warfare and peace process in the region. The report discusses the Armenian and Azerbaijani perspective, the role and views of others (Iran, Turkey, Russia), as well as the U.S. policy regarding the conflict.

The entry into force, on January 1, 1994, of the North American Free Trade Agreement (NAFTA) has eliminated the advantage that the beneficiaries of the Caribbean Basin Economic Recovery Act (CBERA) and related provisions of the Caribbean Basin Initiative (CBI) had enjoyed in trade with the United States relative to Mexico, and gave Mexico an increasingly significant competitive edge over the CBERA countries. The scheduled further implementation of the NAFTA would have resulted in a substantial advantage to Mexico over the CBERA countries and vitiate in part the purpose of the CBERA.