Regional trade agreements (RTAs) throughout the world have increased since the early 1990s. Many members of the World Trade Organization (WTO) are focusing on regional or bilateral free trade agreements as a key component of their foreign and commercial policy. This interest is evident among industrialized and developing countries, and throughout various world regions. Mexico is a member of the WTO, which permits members to enter into regional trade integration arrangements under certain conditions that are defined within specific WTO rules. Since the early 1990s, Mexico has had a growing commitment to trade liberalization and has a trade policy that is among the most open in the world. Mexico has actively pursued free trade agreements (FTAs) with other countries to help promote economic growth, but also to reduce its economic dependence on the United States. The United States is, by far, Mexico's most significant trading partner. Over 80% of Mexico's exports are destined for the United States. In an effort to increase trade with other countries, Mexico has entered into 11 free trade agreements with 46 countries. Mexico is a signatory to the Trans-Pacific Partnership (TPP), a proposed free trade agreement (FTA) signed by 12 Asia-Pacific countries on February 4, 2016, after eight years of negotiation. It would require congressional ratification before it could become effective. On January 30, 2017, the United States gave notice to the other TPP signatories that it does not intend to ratify the agreement, effectively ending the U.S. ratification process and TPP's potential entry into force, unless the Administration changes its position. Mexico and other TPP countries have proposed moving forward on an FTA without the participation of the United States. In the 115 th Congress, congressional interest related to the trade and economic relationship with Mexico may involve issues related to the North American Free Trade Agreement (NAFTA) and a possible renegotiation, the effects of NAFTA, Mexico's ongoing efforts to form trade agreements with other countries, the status of the proposed TPP and the possibility of its moving forward without the United States, economic conditions in Mexico, Mexico's labor market, and Mexican migration to the United States. This report provides an overview of Mexico's free trade agreements, its motivations for trade liberalization and entering into free trade agreements, trade trends with the United States and other countries, and some of the issues Mexico faces in addressing its economic challenges. This report will be updated as events warrant. Economic motivations are generally the major driving force for the formation of free trade agreements among countries, but there are other reasons countries enter into FTAs, including political and security factors. Mexico's primary motivation for the unilateral trade liberalization efforts of the late 1980s and early 1990s was to improve economic conditions in the country, which policymakers hoped would lead to greater investor confidence and attract more foreign investment. This motivation was a major factor in negotiating NAFTA with the United States and Canada. The permanent lowering of trade and investment barriers and predictable trade rules provided by FTAs can improve investor confidence in a country, which helps attract foreign direct investment (FDI). Multinational firms invest in countries to gain access to markets, but they also do it to lower production costs. Mexico has other motivations for continuing trade liberalization with other countries, such as expanding market access for its exports and decreasing its reliance on the United States as an export market. By entering into trade agreements with other countries, Mexico is seeking to achieve economies of scale in certain sectors of the economy and to expand its export market. FTAs provide partners with broader market access for their goods and services. Countries can benefit from trade agreements, because producers are able to lower their unit costs by producing larger volumes for regional markets in addition to their own domestic markets. When more units of a good or a service can be produced on a larger scale, companies are able to decrease cost of production. Mexico's high dependence on the United States as an export market is a likely motivation for seeking FTAs and other regional trade arrangements with other countries. The slow progress in multilateral negotiations in the WTO may be another likely factor. Some countries see smaller trade arrangements as "building blocks" for multilateral agreements. Other motivations could be political. Mexico may be seeking to demonstrate good governance by locking in political and economic reforms through trading partnerships. From the 1930s through part of the 1980s, Mexico maintained a strong protectionist trade policy in an effort to be independent of any foreign power and as a means to promote domestic-led industrialization. Mexico established a policy of import substitution in the 1930s, consisting of a broad, general protection of the entire industrial sector through tight restrictions on foreign investment and by controlling the exchange rate to encourage domestic industrial growth. Mexico also nationalized the oil industry at this time. These protectionist economic policies remained in effect until the country began to experience a series of economic challenges several decades later. In the mid-1980s, Mexico's economy was on the verge of collapse as a result of the 1982 debt crisis in which the Mexican government was unable to meet its foreign debt obligations. Much of the government's efforts in addressing these economic challenges were placed on privatizing state industries and moving toward trade liberalization. Mexico had few options but to open its economy through trade liberalization. In the late 1980s and early into the 1990s, Mexico implemented a series of measures to restructure the economy that included unilateral trade liberalization, replacing import substitution policies with others aimed at attracting foreign investment, lowering trade barriers, and making the country competitive in nonoil exports. In 1986, it acceded to the General Agreement on Tariffs and Trade (GATT), assuring further trade liberalization measures that led to closer ties with the United States. Mexico and the United States began NAFTA negotiations in the early 1990s. Canada later joined the negotiations, and the three countries signed the agreement on December 17, 1992. Before NAFTA came into force Mexico had already entered into its first agreement for free trade in goods, the Mexico-Chile FTA. NAFTA entered into force with much broader provisions than the Chile FTA, such as trade in services, government procurement, dispute settlement procedures, and intellectual property rights protection. In 1999, the original text of the Mexico-Chile FTA was complemented with broader provisions, similar to those under NAFTA. Mexico's initial motivation in pursuing FTAs with the United States and other countries was to stabilize the Mexican economy, which had experienced many difficulties throughout most of the 1980s with a significant deepening of poverty. The expectation in Mexico was that FTAs would increase export diversification; attract FDI; and help create jobs, increase wage rates, and reduce poverty. Mexico's pursuit of free trade agreements with other countries is a way to bring benefits to the economy, but also to reduce its economic dependence on the United States. The United States is, by far, Mexico's most significant trading partner. Approximately 80% of Mexico's exports go to the United States and 47% of Mexico's imports come from the United States. In an effort to diversify and increase trade with other countries, Mexico has a total of 11 trade agreements involving 46 countries (see Figure 1 ). These include agreements with many countries in the Western Hemisphere including the United States and Canada, Chile, Colombia, Peru, and Uruguay. Mexico has also ratified an FTA with Central America (Costa Rica, El Salvador, Honduras, Guatemala, and Nicaragua) that was signed on November 22, 2011. As of September 1, 2013, the FTA had entered into force among all 6 parties. Mexico has also negotiated free trade agreements outside of the Western Hemisphere and, in July 2000, entered into agreements with Israel and the European Union. Mexico became the first Latin American country to have preferential access to these two markets. Mexico has completed a trade agreement with the European Free Trade Association of Iceland, Liechtenstein, Norway, and Switzerland. The Mexican government expanded its outreach to Asia in 2000 by entering into negotiations with Singapore, Korea, and Japan. In 2004, Japan and Mexico signed an Economic Partnership Agreement, the first comprehensive trade agreement that Japan signed with any country. However, the large number of trade agreements has not yet been successful in significantly decreasing Mexico's dependence on trade with the United States. The North American Free Trade Agreement has been in effect since January 1, 1994. The agreement was signed in December 1992; NAFTA side agreements were signed in August 1993. At the time that NAFTA was implemented, the U.S.-Canada FTA was already in effect and U.S. tariffs on most Mexican goods were low. NAFTA opened up the Mexican market to the United States and Canada, creating the largest single market in the world. Some tariffs were eliminated immediately, while others were phased out in various schedules of 5 to 15 years. NAFTA provided the option of accelerating tariff reductions. It eliminated quotas and import licenses. It established rules on duty drawback programs, terminating all existing drawback programs by January 1, 2001. The agreement also contained provisions for market access in goods, agriculture, and most service sectors; foreign direct investment; intellectual property rights protection; sanitary and phytosanitary measures; government procurement; antidumping and countervailing duty matters; land transportation; dispute resolution; and special safeguard mechanisms. NAFTA was the first major free trade agreement that addressed environmental and labor concerns by including related provisions in separate side agreements that entered into force at the same time as NAFTA. NAFTA provisions required that partner countries eliminate all nontariff barriers to agricultural trade, either through their conversion to tariff-rate quotas (TRQs) or ordinary tariffs. Mexico removed or replaced its import license requirements with TRQs and gradually phased these out over a 10-year period. Approximately one-half of U.S.-Mexico agricultural trade became duty-free when the agreement went into effect.