MEXICO CITY (AP) – Mexico, the United States and Canada will announce a special alliance to improve security while protecting the flow of trade across their borders, a Mexican official said Monday.

The alliance represents “a big step” toward promoting economic development in the three countries, which belong to the North American Free Trade Agreement, and making their markets more competitive with Europe and Asia, Geronimo Gutierrez, Mexico’s deputy secretary for North America, told reporters.

President Vicente Fox also hopes to broach immigration reform during today’s meeting in Waco, Texas, although he has said previously that chances of its passage in the United States are slim.

Bush, Fox and Canadian Prime Minister Paul Martin were expected to sign an accord Wednesday committing the three countries to work together on establishing specific actions aimed at achieving the alliance’s goals, Gutierrez said.

Such actions might include simplifying regulations, facilitating the movement of business people across borders, increasing cooperation in technology, energy and telecommunications, Gutierrez said.

The new northern alliance will promote prosperity, security and quality of life, Gutierrez said.

“We are looking for an adequate balance between the concerns about security … and the legitimate flow of goods and services,” he said.

Fox and Bush also were likely to discuss drug trafficking in Mexico and the country’s recent promise to pay off a long-standing water debt to U.S. farmers across the border, he said.

The Mexico-U.S. border is one of the world’s most dynamic, with the daily exchange of about $750 million in commerce and the crossing of at least 1 million people.

The Mexican president will arrive at a time of chilled relations, following a series of statements from the United States expressing concern about Mexican security, human rights, drug trafficking and the potential for political instability during next year’s presidential elections.

Fox has bristled at the reports, calling at least some of them inappropriate and unrealistic.

U.S. Secretary of State Condoleezza Rice tried to smooth over some of the tension during a visit to Mexico City earlier this month, but CIA Director Porter Goss on Thursday reiterated his

AP-ES-03-21-05 2252EST