On January 1, 1994, Mexico became a full member of the North American Free Trade Agreement (NAFTA), joining the United States of America and Canada in a large and prosperous economic bloc. It is on this date that the Zapatista Army of National Liberation emerged, capturing several towns and sparking a brief conflict with the government. On March 23, 2005, the Security and Prosperity Partnership of North America was signed by the elected leaders of those countries.
According to the U.S. CIA Factbook for 2006: Mexico has a free market economy that recently entered the trillion dollar class. It contains a mixture of modern and outmoded industry and agriculture, increasingly dominated by the private sector. Recent administrations have expanded competition in seaports, railroads, telecommunications, electricity generation, natural gas distribution, and airports. Per capita income is one-fourth that of the US; income distribution remains highly unequal. Trade with the US and Canada has tripled since the implementation of NAFTA in 1994. Mexico has 12 free trade agreements with over 40 countries including, Guatemala, Honduras, El Salvador, the European Free Trade Area, and Japan, putting more than 90% of trade under free trade agreements.
The Fox administration was cognizant of the need to upgrade infrastructure, modernize the tax system and labor laws, and allow private investment in the energy sector, but has been unable to win the support of the opposition-led Congress. The current Calderón government that took office in December 2006 is confronting the same challenges of boosting economic growth, improving Mexico's international competitiveness, and reducing poverty.
The end of PRI's hegemony
Accused many times of blatant fraud, the PRI's candidates continually held almost all public offices until the end of the 20th century. It was not until the 1980s that the PRI lost the first state governorship, an event that marked the beginning of the party's loss of hegemony. Through the electoral reforms started by president Carlos Salinas de Gortari and consolidated by president Ernesto Zedillo, by the mid 1990s, the PRI had lost its majority in Congress. In 2000, after seventy years, the PRI lost the presidential election to the candidate of the National Action Party (PAN — Partido Acciòn Nacional), Vicente Fox. He was the 69th president of Mexico. The continued non-PAN majority in the Congress of Mexico prevented him from implementing most of his reforms.
President Ernesto Zedillo
In 1995, President Ernesto Zedillo faced an economic crisis. There were public demonstrations in Mexico City and constant military presence after the 1994 rising of the Zapatista Army of National Liberation in Chiapas. Zedillo also oversaw political and electoral reforms that reduced the PRI's hold on power. After the 1988 election, which was strongly disputed and arguably lost by the government party, the IFE (Instituto Federal Electoral – Federal Electoral Institute) was created in the early 1990s. It is run by ordinary citizens, overseeing that elections are conducted legally and fairly.
President Vicente Fox Quesada
As a result of popular discontent, the presidential candidate of the National Action Party (PAN) Vicente Fox Quesada won the federal election of July 2, 2000, but did not win a majority in the chambers of congress. The results of this election ended 71 years of PRI hegemony in the presidency. Many people in Mexico claim that, even if Fox won the election, President Zedillo did not give his party (PRI) a chance to dispute the results of the election by making Fox's victory "official" by addressing the nation the same night of the election, a first in Mexican politics (and in other places, too, where it is more normal for the losing candidate to admit defeat, rather than the outgoing incumbent). One reason offered for this is that Zedillo sought a quick and peaceful election in 2000 to avoid another crisis after the change of government.
President Felipe Calderón Hinojosa
Felipe Calderón Hinojosa (also a member of the conservative National Action Party (PAN) is, as of April 2009, the president of Mexico. Many people in Mexico claim that he actually did not win the election: as a result, Andrés Manuel López Obrador, the candidate of the leftist Party of the Democratic Revolution (PRD) appointed himself as the "legitimate president". He is currently traveling all over the country, along with his own cabinet.
In 2008, there was a major escalation in the Mexican Drug War.