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Annual report of the U.S. Good Neighbor Environmental Board describing the organization's activities, goals, and recommendations for further development along the U.S.-Mexico border region. This report focuses on the status of Executive Branch and other implementation of prior years' recommendations, as reported by the federal agencies' represented on the Board.

Debate continues over the benefits of U.S. trade with Mexico, the North American Free Trade Agreement (NAFTA), and particularly maquiladoras, or cross-border production sharing plants. Maquiladoras generate a large portion of U.S.-Mexico trade, yet the economic effects are not widely understood. Many believe there is no benefit to such trade because it leads to the loss of U.S. jobs, production, and wages. Maquiladora products, however, have a high U.S. content that in addition to fostering productivity gains in both countries, may actually minimize the loss of U.S. jobs by allowing the higher paying jobs to stay at home rather than be shipped entirely abroad, for example, to Asia. Still, adjustment to globalized production creates challenges, particularly in addressing the plight of low-skilled workers who become unemployed. Research, however, continues to point to domestic rather than trade policy for the likely solutions, particularly the emphasis on education and training programs.

This report provides information on Mexico's counter-narcotics efforts under the presidency of Ernesto Zedillo from December 1994 to March 1998 in the context of President Clinton's February 26, 1998 certification that Mexico was fully cooperative in drug control efforts. The report focuses on (1) trends in Mexico's share of illicit drug traffic to the U.S., (2) measures of Mexico's efforts to control drug trafficking, and (3) Mexico's cooperation with the U.S. in counter-narcotics efforts.