In October 2007, the United States and Mexico announced the Mérida Initiative, a three-year program of U.S. assistance to Mexico and Central America to combat drug trafficking, gangs, and organized crime. This report provides an overview and discussion of the funding provided for Mérida, and presents several issues that Congress may consider as it oversees implementation of the Initiative and shapes its future direction.

In October 2007, the United States and Mexico announced the Mérida Initiative, a multi-year proposal for $1.4 billion in U.S. assistance to Mexico and Central America aimed at combating drug trafficking, gangs, and organized crime. This report outlines the various appropriations and other foreign aid measures outlined in the Mérida Initiative and what future actions regarding this ongoing effort will include.

This report covers the North American Free Trade Agreement (NAFTA) and U.S.-Mexico drug trafficking. It also looks at migration, environmental issues, legislation in the 111th Congress, and the relationship between the Obama Administration and Mexico.

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Mexico has a population of slightly over 100 million people making it the most populous Spanish-speaking country in the world and the third most populous country in the Western Hemisphere. Based on a gross domestic product (GDP) of $677 billion in 2004 (about six percent of U.S. GDP), Mexico has a free market economy with a strong export sector that is very sensitive to changes in the U.S. economy. Mexico’s economy is relatively small compared to the U.S. economy. Economic conditions in Mexico are important to the United States because of the close trade and investment interactions, and because of other social and political issues that could be affected by economic conditions, such as immigration.