Cowering figures are a signpost to the agenda of the presidents

One of the most haunting sights on the northern side of the US border with Mexico is a road sign outside San Diego.

One of the most haunting sights on the northern side of the US border with Mexico is a road sign outside San Diego.

Beneath the word "caution" is an illustration of a couple running as they pull a child behind them. The sign was erected because of the numbers of illegal immigrants killed as they scurried across the highway at night, adding to an annual death toll of more than 400 Mexicans who try to cross the border illegally.

In a way the cowering figures on the sign appear to symbolise the relationship between the two countries - one much more powerful than the other.

It is no surprise that President George Bush should choose Mexico for his first foreign trip yesterday.

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It is one of the few foreign countries he is familiar with, he has family connections there and he has already met the new president, Mr Vicente Fox, a man with whom he shares more than a taste for cowboy boots.

Mr Bush is also aware of the fact that, for many Republicans, the two main domestic issues that impinge on Mexico are immigration and drugs.

An estimated 7 million Mexican-born people live in the US, of whom around 2.4 million are illegal. It is 15 years since the last amnesty for illegal immigrants and Mr Fox has made it clear that he would like a similar one now. While Mr Bush made a concerted effort to reach Latino voters during his election campaign, he now faces a more delicate calculation on this issue. The lure of high wages in the US will remain strong until the Mexican economy is able to compete - a situation not within the foreseeable future.

It is estimated that by 2050 around 25 per cent of the US population will have Latino origins so an amnesty could be seen as merely bowing to the inevitable.

Mr Bush is unlikely to relax restrictions on permanent entry though a working group will be set up to look at allowing freer access across the border to guest workers and granting legal residence to undocumented workers already in the US.

In the long term, Mr Fox envisages a situation similar to the free movement across EU borders.

This week the film Traffic, which examines the drugs trade between the two countries and concludes that the current policies have been a failure, was nominated for a clutch of Oscars. There is clearly no better time to address the issue although Mr Bush has shown little sign that he is prepared to make any radical changes to what is widely seen to have been a failed war on drugs.

At present, Mexico is among 33 countries which must submit to an annual "certification" process.

This is an assessment of whether the country is doing enough to combat drug trafficking.

Countries refused certification suffer economically from the withdrawal of US support. This week the Mexican foreign minister, Mr Jorge Castaneda, wrote in the Los Angeles Times that the process should be discarded and said the ending of the test could be Mr Bush's first symbolic opportunity to proffer the olive branch.

Almost as explosive politically for Mr Bush is the issue of Cuba.

The new Secretary of State, Gen Colin Powell, told the Senate during his confirmation hearings that the current US embargo should stand on the grounds that Cuba is "one of the last surviving dictatorships on the face of the earth" and Mr Bush has shown little inclination to challenge this.

Traditionally, Mexico has had much warmer relations with Cuba and Mr Fox is in a better position that his predecessors to argue for a loosening of the embargo.

During his campaign, Mr Bush stressed that the US's relationship with Mexico and Latin America was one of its priorities.

The two presidents are expected to discuss plans to create a free trade area of the Americas, which would stretch from Alaska to Argentina.