al. 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 new Felipe CALDERON
administration that took office in December 2006 faces many of the
same challenges that former President FOX tried to tackle, including
the need to upgrade infrastructure, modernize the tax system and
labor laws, and allow private investment in the energy sector.
CALDERON has stated that his top priorities include reducing poverty
and creating jobs. The success of his economic agenda will depend on
his ability to garner support from the opposition.

Micronesia, Federated States of
Economic activity consists primarily
of subsistence farming and fishing. The islands have few mineral
deposits worth exploiting, except for high-grade phosphate. The
potential for a tourist industry exists, but the remote location, a
lack of adequate facilities, and limited air connections hinder
development. The Amended Compact of Free Association with the US
guarantees the Federated States of Micronesia (FSM) millions of
dollars in annual aid through 2023, and establishes a Trust Fund
into which the US and the FSM make annual contributions in order to
provide annual payouts to the FSM in perpetuity after 2023. The
country's medium-term economic outlook appears fragile due not only
to the reduction in US assistance but also to the slow growth of the
private sector.

Midway Islands
The economy is based on providing support services
for the national wildlife refuge activities located on the islands.
All food and manufactured goods must be imported.

Moldova
Moldova remains one of the poorest countries in Europe
despite recent progress from its small economic base. It enjoys a
favorable climate and good farmland but has no major mineral
deposits. As a result, the economy depends heavily on agriculture,
featuring fruits, vegetables, wine, and tobacco. Moldova must import
almost all of its energy supplies. Moldova's dependence on Russian
energy was underscored at the end of 2005, when a Russian-owned
electrical station in Moldova's separatist Transnistria region cut
off power to Moldova and Russia's Gazprom cut off natural gas to
Moldova in disputes over pri