Introduction

The Mexico-United States economic relationship is a mixture of conflict and cooperation. As trade and economic interaction between the two countries grew, so too did the conflicts; but there is also cooperation across a broad spectrum of economic activities. There is ample evidence of the cooperation. The United States is by far Mexico's most important trading partner and in recent years Mexico has become the third largest trading partner for the United States after Canada and Japan. Hundreds of U.S. companies divide their industrial production between Mexico and the United States, producing segments of final output in the country which has a comparative advantage for that part of the production. This co-production first focused on simple manufactures, like doing the hand work on textile products or the assembly of integrated circuits in Mexico, but is now proceeding in more varied production involving automobile engines, machinery, and petrochemical products. The two countries are financially linked. The level of U.S. interest rates forces changes in Mexico's economic policy, and the concern that Mexican companies and government agencies cannot meet debt obligations on time has brought about a profound change in U.S. financial regulations. When the Mexican economy was forced to slow down after 1982, as part of the medicine to correct the economic crisis, hundreds of thousands of workers in the United States were affected because Mexico could no longer buy the goods they produced.