First, despite heightened security along the border, a steady stream of illegal immigrants continue to head north from Mexico in search of better opportunities in the U.S.
Second, Mexico's economy is being hurt in a number of ways by the severe recession the United States is experiencing.
Finally, a violent drug war is raging through Mexico's cities and border townsand threatening to spill into the U.S.
It's the drug violence that has grabbed headlines recently. The Mexican government's increasingly bloody battle with the drug cartels has killed more than 7,000 people, including journalists and innocent bystanders. The U.S. State Department recently warned American students not to go to Mexico during spring breakangering the Mexican government, which fears for the health of its important tourism industry.
The Mexican drug cartels bring in billions of dollars, and they use that money to buy off judges, prison guards, and police officers. In fact, corruption is so rampant that in some cities entire police forces have been disbanded and rebuilt from scratch as part of efforts to clean house. The cartels effectively operate as a state within the state, levying their own taxes, throwing up roadblocks, and enforcing their own codes of behavior.
The Mexican government is fighting back, making tens of thousands of arrests, including several top drug traffickers and kingpins. More than 40,000 soldiers have been sent to confront the drug cartels' armed posses on city streets, and huge quantities of drugs and weapons have been seized.
But the violence continues, and concern is rising in the U.S., especially in the border states of California, Arizona, New Mexico, and Texas; the Governors of Texas and Arizona recently asked Washington to send National Guard troops to their states.
Military analysts have even begun to question whether the spillover violence threatens U.S. national security and, to the dismay of many Mexicans, whether the country itself might crumble under the strain of the war. "The opinion that Mexico is breaking down seems to be shared by much of the American news media," says Enrique Krauze, a Mexico City editor, "not to mention Americans who ... ask me whether Mexico will 'fall apart.' It most assuredly will not."
Krauze isn't the only one angered by the bad press. Mexicans point to the U.S. role in the drug problem: that the drugs are largely bought and used by Americans, and that many of the guns used by the drug cartels come from the U.S.
When Secretary of State Hillary Clinton visited Mexico in March, she acknowledged American responsibility. "Our insatiable demand for illegal drugs fuels the drug trade," Clinton said. "Our inability to prevent weapons from being illegally smuggled across the border to arm these criminals causes the deaths of police officers, soldiers, and civilians."
Beyond the headlines about the drug war is the critical issue of the economy, for both countries. Mexico is the United States's third-largest trading partner (after Canada and China). Fifteen years after the North American Free Trade Agreement (NAFTA) between the U.S., Canada, and Mexico went into effect, Mexico's exports have exploded, quintupling to $292 billion last yearwith 82 percent going to the U.S.
This year, however, the recession in the U.S. means that Americans are buying less of everything, including products from Mexico, and so exports to the U.S. are way down. Mexico's export factories have lost some 65,000 jobs since October, and the central bank forecasts that as many as 340,000 people could lose their jobs this year.
Another key revenue source in the Mexican economyand the lifeblood of many small townsis also affected by the U.S. recession: The money Mexican immigrants send to their families back home, known as remittances, is way down. Many immigrants work in construction and landscaping, both depressed by the housing slump in the U.S.
The recession is also encouraging protectionist and anti-immigrant sentiments among Washington lawmakers whose constituents are worried about companies moving jobs to Mexico to save money and about immigrants taking their jobs in the U.S.
Despite the growth of Mexico's economy over the past 15 years, 500,000 Mexicans still head north each year, seeking opportunities in the U.S. that they do not have at home.
Illegal immigration has become an explosive issue in the United States, making it difficult to reform what all agree is a broken system.
President Obama plans to push this year for immigration reform, including a path to citizenship for illegal immigrants. He wants to bring illegal immigrants into the legal system by recognizing that they violated the law, and imposing fines and other penalties for that offense. He would try to prevent future illegal immigration by strengthening border enforcement and cracking down on employers who hire illegal immigrants.
"I know this is an emotional issue; I know it's a controversial issue," he told a town meeting on March 18 in Costa Mesa, Calif. "I know that the people get real riled up politically about this." But, he said, immigrants who are longtime residents but lack legal status "have to have some mechanism over time to get out of the shadows."
Today, more than 20 million Mexicans live in the U.S., and more than half of them live on land that once belonged to MexicoCalifornia, Texas, New Mexico, Arizona, Nevada, and Utah, which Mexico ceded to the U.S. after losing the Mexican-American War in 1848. Some 8.5 million live in Californiaa quarter of the state's population and nearly half of New Mexico's people have roots in old Mexico. About 7 million of the nation's 12 million illegal immigrants are from Mexico.
"The truly enduring relationship between the two countries is through immigration," says Wayne Cornelius of the University of California, San Diego. "We're now 140 years into a large-scale migratory movement from Mexico to the U.S., and there's really no prospect of that flow diminishing significantly over the longer haul."
In recent months, the flow of illegal immigrants across the U.S.-Mexican border has slowed as security has been beefed up and the economic downturn means fewer opportunities for migrants looking for work.
"The flow always rebounds when the U.S. economy recovers," Cornelius says. "We have an integrated North American labor market: Millions of Mexicans depend on job opportunities in the U.S., and millions of Americans depend on the labor of Mexican migrants."
Despite the challenges Mexico faces, there are reasons to be optimistic about the country's future, and that bodes well for its neighbor to the north.
"Mexico is a tolerant and secular state, without the religious tensions of Pakistan or Iraq," says Krauze, the Mexican editor. "It is an inclusive society, without the racial hatreds of the Balkans. ... Most important, Mexico is a young democracy that eliminated an essentially one-party political system."