THE PRESIDENT: Thank you, Mr. President, for the wisdom of your words, for the warmth of your personal expression, and for the great generosity with which the people of Mexico have received my wife and our delegation, the members of the administration and the members of Congress. We thank all those who have been a part of that in the Mexican government, throughout the political system and citizens at large.

I am honored to speak today in the heart of this magnificent capital, where Teotihuacan and Aztec civilizations flourished, where one of the world's greatest cities grew up centuries before the first English tents were pitched in Jamestown, Virginia, or Plymouth, Massachusetts. I'm, frankly, a little envious that Hillary got to spend an extra day here, and I want to thank those who are responsible for the wonderful welcome she received in the Yucatan.

Almost 22 years ago now, Hillary and I came to Mexico for our honeymoon. Mexico won our hearts then, but now as then, me encanta Mexico. (Applause.)

I come here today to celebrate the ties that bind the United States and Mexico and to help set a course to strengthen them for the age of possibility before us as we enter the 21st century. Our nations and our hemisphere stand at a crossroads as hopeful as the time when Hidalgo and Morelos lit the torch of liberty for Mexico almost two centuries ago.

Democracy has swept every country but one in the Americas, giving people a vote and a voice in their future. Decades of coups and civil wars have given way to stability, to peace, to free markets and to the search for social justice and a cleaner environment. The electricity of change is surging throughout our hemisphere and nowhere more hopefully than Mexico.

I congratulate the Mexican people for carrying forward bold political reforms that will lead in July to the most intensely contested elections in your history. We know from our own 220-year experiment that democracy is hard work. It must be defended every day. But it is worth the effort, for it has produced more opportunity for people to make the most of their own lives than all its rivals.

Four years ago, in this very place, we began a grand common effort to secure democracies gains in our hemisphere for all our people. On behalf of my administration, Vice President Gore here invited the nations of our hemisphere to the Summit of the Americas in Miami. There we set an ambitious agenda to create free trade throughout the hemisphere and to cooperate on a host of other issues with the goal of fulfilling the age old dream of building a truly democratic and prosperous family of the Americas in the 21st century.

Revolutionary forces of integration, and technology and trade, and travel and communications are shaping our times and bringing us all closer together. The stroke of a computer key sends ideas, information and money across the planet at lightening speed. Every day we use products that are dreamed up in one country, financed in another, manufactured in a third, with parts made in still other countries, and then sold all over the world. Like it or not, we are becoming more interdependent. And we see that, too, on the negative side, as when a stock market crash, an environmental disaster, or a dread disease in one country sends shock waves deeply felt far beyond its borders.

While economic integration is inevitable, its shape and its reach depend upon our response to it. In both our countries, there are some who throw up walls of protection to ward off the challenge of change. But more and more, people here and the United States and throughout the Americas understand that openness, competition, and the flow of ideas and culture can improve the lives of all our people, if we ensure that these forces work for, and not against, all our people.

With our long border, rich history, and complex challenges, Mexico and the United States have a special responsibility to work together to seize the opportunities and defeat the dangers of this time. Our partnership for freedom and democracy and for prosperity, and our partnership against drugs, organized crime, environmental decay, and social injustice is fundamental to the future of the American people and to the future of the Mexican people.

To succeed, this partnership must be rooted in a spirit of mutual respect. Your great leader, Benito Juarez, whose statue stands not far from the White House in Washington, said, "Respect for the rights of others is peace." Today, I reaffirm to the people of Mexico: We embrace the wisdom of Juarez. We seek a peaceful, prosperous partnership filled with respect and dignity. (Applause.)

Four years ago, together, we led the fight for NAFTA. Many people in both our countries painted a dark picture of lost jobs and boarded-up factories should NAFTA prevail. Well, they were wrong. NAFTA is working -- working for you and working for the American people.

In three short years and despite Mexico's worst recession in this century, trade between our nations has grown nearly 60 percent, as President Zedillo said. Mexico is our third largest trading partner, just behind Japan, which has an economy 15 times larger. Our exports to Mexico are 37 percent higher than before NAFTA -- an all-time high in spite of the economic difficulties here.

But for Mexico, NAFTA's benefits are just as great. Two and a half years ago, the financial crisis that struck Mexico wrought real and profound hardship to your people as jobs vanished and inflation skyrocketed. The storm hit only days after President Zedillo took office. He might have simply complained that he got a big dose of bad luck. But instead, he responded with vision and courage. By keeping to the path of reform and the blueprint of NAFTA, he lessened the impact of the recession.

The real hardships remain. Mexico has made a remarkable turnaround. Since the crisis, you have created one million new jobs, cut inflation by more than half, and regained the confidence of international investors.

Now, compare this with the economic crisis of 1981 and '82, when Mexico sharply raised its tariffs and followed a different course. Then, it took seven long years for Mexico to return to the financial markets; this time, only seven months. Then, it took four years for your economy to recover the lost ground; this time, only a year after the crisis, Mexico grew by more than five percent and is expected to grow strongly this year, too.

You have endured punishing setbacks, but America is proud to have worked with you from the very beginning, enlisting international support for a loan package that safeguarded hundreds of thousands of jobs in both our countries, calmed emerging markets throughout Latin America and the world, and when Mexico paid the loan back, earned the respect and admiration of the entire world. I congratulate you on this course. (Applause.)

Of course, the ultimate test of our economic partnership is not in big numbers, but in human impact: the electronic workers of Mexico's Baja Peninsula whose new jobs mean better health care and pensions and more education for their children; the hundreds of thousands of Mexican women who now have mammograms because American-made diagnostic equipment has become more affordable to you; and all the American workers with good high-wage jobs based on our trade with you.

NAFTA has also become an important tool for improving the environment and the well-being of workers. Its institutions are working to clean up pollution in the border region, with four treatment plants already under construction and more to come. Its labor agreements have created a new awareness of workers' rights and labor conditions in both our countries.

We must accelerate the pace of these efforts to reach more people and more communities. And we must include more nations in our partnership so that we can achieve the goal we set out at the Summit of the Americas of a free trade area of the Americas. That is why I'm working with Congress to gain support for fast track authority and why I'm coming back to Latin America twice in the next few months.

As we celebrate these accomplishments, we must also do everything in our power to assure that the benefits and the burdens of change are fairly shared. The most powerful tool for doing that, plainly, is education -- giving our people the skills they need to compete and succeed.

At the Miami Summit, Mexico took the responsibility of leading a hemispheric education initiative. Working with Brazil, Chile, and the United States, you have set our sights on lifting standards and bringing new methods and technologies to classroom throughout the hemisphere. We can rekindle the passion for education that swept this country after your revolution. Your great poet, Alfonso Reyes, described that moment as, "a grand crusade for learning that electrified the people. Nothing equal to it has ever been seen in the Americas."

Let us see something equal to it and greater. Let us renew this crusade. And let us remember, as my wife has said, the citizens on every continent, in distant villages and large cities, this crusade for education must include young women as well as young men on equal terms. And let us resolve to make this crusade a shining light of our next Summit of the Americas next year in Santiago.

In Miami at the first summit, we also reaffirmed that we cannot be responsible stewards of freedom unless we are also responsible stewards of our natural resources -- our hemisphere's land and air and water, as well as the rich texture of plant and animal life they support.

Over the long run, the development of democracy and a prosperous economy requires the sustainable development of our natural resources. That is why we have put the protection of the environment right where it belongs, at the heart of our hemispheric agenda. That is the course we charted together in Rio, in Miami, in Santa Cruz, and one we must pursue further in Santiago.

Trade, education and the environment are critical pieces of the greater mosaic of our relationship, designed to turn our 2,000-mile border into a vibrant source of growth and jobs and open exchange. We're also building a bridge between Brownsville and Matamoros, and roads to connect our people, streamlining cargo transit with high-tech scanners, improving water supplies for the areas inhabitants, and through our Border 21 Initiative, giving local communities a strong voice in the future of the dynamic living space they share.

As our cooperation grows closer, so do our people. For America, that means pride in the fact that we are one of the most diverse democracies in the world. That diversity will be one of our great strengths in the global society of the 21st century. And Mexican Americans are a crucial part of our diversity and our national pride. Now, more than 12 million strong, they have helped to make the United States the fifth largest Hispanic nation in the world.

Mexican Americans are contributing to every dimension of American life. In Congress, they have written the laws of our land. Just yesterday, Ambassador Bill Richardson, whose mother came from this city, was working to bring peace in Central Africa, and every day he is America's voice at the United Nations.

Our administration draws strength from many other remarkable Mexican Americans, including several who are here with me -- our Energy Secretary, Federico Pena; my Director of Public Liaison, Maria Echaveste; my Congressional Liaison, Janet Murguia. I am also pleased to have in our party two distinguished members of Congress who are Mexican Americans -- Javier Becerra of California, and Silvestre Reyes of Texas; and four other distinguished elected officials who represent large numbers of Mexican Americans and who care deeply about our partnership -- Senator Kay Bailey Hutchison of Texas, Senator Jeff Bingaman of New Mexico, Representative Jim Kolbe of Arizona and Governor Robert Miller of Nevada.

Last year, nearly 160,000 Mexicans immigrated legally to America, bringing their talents, their energies, their aspirations. They've played by the rules. And we, for our part, must make sure that the system treats them fairly and gives them the chance to live up to their hopes and dreams.

But to maintain an immigration policy that is generous, fair, safe, and orderly, we must also take effective action to stop illegal immigration. We are a nation of immigrants and of laws. Just as those who obey are laws are welcome, those who break them must face the consequences. Our new immigration law will help us to achieve these goals. In applying it and in our overall approach to immigration, we will balance control with common sense and compassion.

I am very pleased that the balanced budget agreement I reached with our Congress last week includes a significant restoration of welfare benefits to legal immigrants. (Applause.) I will continue to work with Congress to correct some aspects of our immigration law. We will ensure respect for human rights and seek to apply the law humanely, with special concern for children and families. There will be no mass deportations or no discrimination. And we will continue to support Mexico's efforts to create new opportunities here, so that no one feels compelled to leave home just to earn a living for his or her family.

In the end, that is the answer. But I ask you to remember and work with us on the central premise. We have a generous immigration policy, perhaps the most generous in the world; but to make it work we must be a nation of laws.

This moment of great promise for us is, frankly, also one of peril. The great irony of this time is that the forces of global integration have also unleashed powerful sources of disintegration that use open borders and technology and modern communications to strike at the very heart of civilized societies -- our families, our institutions, our very lives.

For us, the greatest of these scourges is that of illegal drug-trafficking. The cost to both of us of illegal drugs are staggering. In America, every year drugs kill 14,000 people and cost our country almost $70 billion for crime, prisons, lost work, wounded bodies and ruined lives. Every year, our law enforcement officials arrest one million people on drug charges.

In Mexico, President Zedillo has called narcotics trafficking "the greatest threat to national security, the biggest hazard to social health and the bloodiest source of violence."

Throughout our hemisphere we see how drug cartels threaten the fabric of entire societies. They corrupt or murder law enforcement officials and the judiciary, take over legitimate businesses and banks, spread violence to offices and homes, to streets and to playgrounds.

Drugs are not simply a Mexican problem or an American problem -- they are our common problem. The enormous demand for drugs in America must be stemmed. We have just a little less than five percent of the world's population -- yet, we consume one-third of the world's cocaine, most of which comes from Mexico. The money we spend on illegal drugs fuels narco traffickers who, in turn, attack your police and prosecutors and prey on your institutions. We must face this curse together, because we cannot defeat it alone. My friends, the battle against drugs must unite our people, not divide them. (Applause.)

We must fight back together, and we must prevail. In the United States we have begun the largest antidrug effort in our history. More than two-thirds of its $16 billion budget will go to attacking our domestic drug problem. We've cut casual drug use by 50 percent in America, but, tragically, among young people under 18 has doubled. We're reaching out to young people with an unprecedented effort -- a public education campaign to teach that drugs are wrong, illegal, and deadly. We're supporting successful neighborhood strategies like community policing that are making our streets and schools safer and more drug-free. We're punishing drug pushers with tougher sentences and working with our partners abroad to destroy drugs at the source or stop them in transit.

Here in Mexico, you must continue your brave fight against illegal drugs. Already you have shown real advances in drug eradication. You've enacted strong new measures to combat money laundering and organized crime. You've destroyed more drug labs and landing strips and seized more drugs, including more than 10 tons of cocaine just days ago. And last week, you resolved to rebuild your drug enforcement agency on a firmer foundation.

I know the hardship and sacrifice this has caused. More than 200 Mexican police officers died last year because of drug violence. As terrible as this toll is, the price of giving up and giving in would be higher. Let us resolve to redouble our efforts, not by pointing fingers, but by joining hands.

Yesterday, President Zedillo and I took an important step forward when we declared the U.S.-Mexican Alliance Against Drugs, based on mutual respect and common sense. Will strengthen our attack on drug production, trafficking and consumption. We will crack down harder on the key problems of money laundering and arms trafficking. The future of our children depends upon these efforts and depends more on our determination to continue the fight. We must not let our children down. (Applause.)

Our alliance against drugs is but one of many elements in our cooperation for the coming century. Yesterday, the President and I received a report of our binational commission. From wiping out tuberculosis in our border states to protecting endangered species in the Pacific, to increasing educational opportunity with more Fulbright Scholarships, the scope of our joint efforts has become as large as the continent we share.

Fifty years ago, President Harry Truman came to Mexico. His visit was a turning point between our people. He spoke of the difficulties in our past and of the need for us to work more closely. He said, I refuse to be discouraged by apparent difficulties; difficulties are a challenge to men of determination. In the face of our difficulties, we must be men and women of determination. We can bridge the divides of culture, history and geography to achieve Juarez' noble vision of respect and peace.

Rooted in the rule of law, rooted in prosperity for all who will work for it, rooted in good health and a clean environment, rooted in modern education and timeless values, the bright promise of a new century lies before us. Let us embrace it together. Thank you. (Applause.)