According to the State Department, no country poses a more immediate narcotics threat to the United States than Mexico. For over 20 years, the United States has supported the Mexican government in its counternarcotics efforts and has provided assistance to develop and strengthen the Mexican government in its law enforcement efforts to stop the flow of illegal drugs from Mexico into the United States. However, from 1993 to 1995, the government of Mexico decided to combat drug-trafficking activities with reduced assistance from the United States. This policy remained in effect until 1995 when the Mexican government recognized the increased threat being posed by drug traffickers and again agreed to accept U.S. counternarcotics assistance for both law enforcement and military organizations involved in counternarcotics activities. In October 1995, the U.S. Secretary of Defense visited Mexico in an effort to strengthen military-to-military relationships between the two countries. As a result of this visit, the Mexican military agreed to accept U.S. counternarcotics assistance as part of the Mexican President’s decision to expand the role of the military in counternarcotics activities. During fiscal years 1996 and 1997, the Department of Defense (DOD) provided the Mexican military with $76 million worth of equipment and training from its inventories. Table 1 summarizes the types of counternarcotics assistance provided to or planned for delivery to the Mexican military for counternarcotics purposes during fiscal years 1996 and 1997. All of the helicopters and the C-26 aircraft were delivered to the Mexican military during 1996 and 1997. Mexico has also received some logistics and training support; however, DOD officials were unable to provide us with the exact level of support given because the data was not readily available. In fiscal year 1998, DOD plans to provide about $13 million worth of counternarcotics training assistance under section 1004 of the National Defense Authorization Act for Fiscal Year 1991, as amended, to Mexico’s military. In addition to the counternarcotics assistance provided by DOD, the Mexican military used its own funds to purchase two Knox-class frigates from the United States through the Foreign Military Sales program. These frigates were valued at about $7 million and were delivered to Mexico in August 1997. According to U.S. embassy officials, the Mexican Navy plans to use these frigates for performing various missions, including counternarcotics activities. Finally, during the same period, the State Department provided about $11 million to support Mexican law enforcement efforts. It plans to provide another $5 million in fiscal year 1998. The State Department, through its Bureau of International Narcotics and Law Enforcement Affairs, is responsible for formulating and implementing the international narcotics control policy, as well as coordinating the narcotics control assistance of all U.S. agencies overseas, including DOD. U.S. and Mexican counternarcotics objectives include (1) reducing the flow of drugs into the United States, (2) disrupting and dismantling narco-trafficking organizations, (3) bringing fugitives to justice, (4) making progress in criminal justice and anticorruption reform, (5) improving money-laundering and chemical diversion control, and (6) increasing mutual cooperation between the governments. In February 1998, the United States and Mexico issued a joint U.S.-Mexican drug strategy that addressed these objectives. In February 1998, the President certified that Mexico was fully cooperating with the United States in its counternarcotics efforts. Mexico is the principal transit country for cocaine entering the United States and, despite the Mexican government’s attempts to eradicate marijuana and opium poppy, Mexico remains a major source country for marijuana and heroin used in the United States. According to the State Department’s March 1998 International Narcotics Control Strategy Report, about 650 metric tons of cocaine were produced in South America in 1997. Of this amount, Mexico serves as the transshipment point for between 50 and 60 percent of U.S.-bound cocaine. Furthermore, DEA estimates that the majority of the methamphetamine available in the United States is either produced in Mexico and transported to the United States or manufactured in the United States by Mexican drug traffickers. In recent years, drug-trafficking organizations in Mexico have expanded their cocaine and methamphetamine operations. According to DEA, Mexican trafficking groups were once solely transporters for Colombian groups. However, in the early 1990s, major Mexican groups began receiving payment in product for their services. Thus, major Mexican organizations emerged as wholesale distributors of cocaine within the United States, significantly increasing their profit margin. According to DEA, Mexican drug-trafficking organizations are becoming stronger. DEA reports indicate that Mexican organizations have billions of dollars in assets and have at their disposal airplanes, boats, vehicles, radar, communications equipment, and weapons that rival the capabilities of some legitimate governments. One such Mexican organization generates tens of millions of dollars in profits per week. Profits of such magnitude enable the drug traffickers to pay enormous bribes—estimated for one organization to be as much as $1 million per week—to Mexican law enforcement officials at the federal, state, and local levels. DEA has reported that, because of the traffickers’ willingness to murder and intimidate witnesses and public officials, they are a growing threat to citizens within the United States and Mexico. According to the Justice Department, there has also been an increase in the number of threats to U.S. law enforcement officials in Mexico. Since our 1996 report, Mexico has undertaken actions intended to enhance its counternarcotics efforts and improve law enforcement and other capabilities. Some of the actions include (1) eradicating and seizing illegal drugs; (2) increasing counternarcotics cooperation with the United States; (3) initiating efforts to extradite Mexican criminals to the United States; (4) passing an organized crime law, as well as other legislation to enhance Mexico’s authority to prevent money laundering and the illegal use and diversion of precursor and essential chemicals; and (5) implementing measures aimed at reducing corruption within law enforcement organizations and increasing the role of Mexico’s military forces in law enforcement activities. Although these are positive efforts, the results of these actions are yet to be realized because (1) many of them have just been put in place and (2) some have not been broadly applied. The government of Mexico faces continuing challenges in trying to implement these efforts. These challenges include dealing with the lack of adequately trained and trustworthy law enforcement and judicial personnel, overcoming the lack of support for operations, coping with the inability of U.S. agents stationed in the United States to cross the border with firearms, and combating extensive corruption. During this decade, Mexico has eradicated large amounts of marijuana and opium poppy and has seized significant amounts of cocaine. Since 1990, Mexico has eradicated about 82,600 hectares (one hectare equals 2.47 acres) of marijuana. As figure 1 shows, there has also been a substantial decline in the amount of marijuana under cultivation—from a high of 41,800 hectares in 1990 to a low of 15,300 hectares in 1997. Despite Mexico’s success at reducing the amount of marijuana under cultivation, Mexico has not been as successful in reducing the amount of opium poppy cultivation. During 1990 through 1997, Mexico eradicated about 56,800 hectares of opium poppy. However, as figure 2 shows, the amount of opium poppy under cultivation in 1997 was almost 2,000 hectares greater than in the early 1990s. Mexico has also increased the amount of cocaine seized from 1994 to 1997—from 22.1 metric tons to 34.9 metric tons. However, as figure 3 shows, despite this increase, cocaine seizures are still substantially below the levels of 1990-93. Despite these eradication and seizure efforts, U.S. embassy documents indicate and U.S. law enforcement and U.S. embassy officials in Mexico stated that the amount of drugs flowing into the United States from Mexico remains essentially unchanged, and no major drug-trafficking organization has been dismantled. U.S. embassy officials estimated that Mexican cocaine seizures represent less than 10 percent of the total amount of cocaine flowing through Mexico. In 1996, we reported that cooperation between the United States and Mexico on counternarcotics activities was beginning to occur. Cooperation was taking place through actions such as the establishment of a high-level contact group to review drug control policies, enhance cooperation, develop new strategies, and devise a new action plan. Since then, a number of activities have been underway. For example, the high-level contact group on drug control, comprised of senior officials from both governments responsible for drug control, has met five times. Results of these meetings include the following: A U.S.-Mexico Binational Drug Threat Assessment was issued in May 1997 that addressed illegal drug demand and production, drug trafficking, money laundering, and other drug-related issues. A joint U.S.-Mexico Declaration of the Alliance Against Drugs was issued in May 1997 that included pledges from both governments to work toward reducing demand, production, and distribution; improving interdiction capacity; and controlling essential and precursor chemicals, among other issues. A joint U.S.-Mexican binational drug strategy was issued in February 1998 that identified 16 objectives that both countries seek to achieve in their efforts to reduce illegal drug-trafficking activities. In September 1997, ONDCP reported that the progress made by the high-level contact group is largely attributable to cooperative efforts that frequently occur within lower-level working groups. One such effort is the senior law-enforcement plenary group that meets about three times annually and is composed of senior law enforcement personnel from each country. These groups have addressed a variety of issues. For example, senior-level U.S. law enforcement agency officials worked closely with Mexican officials in providing technical assistance during the drafting of Mexico’s anti-money-laundering and chemical control laws.