This report presents an analysis of the potential effects of the U.S. Immigration Reform and Control Act (IRCA) of 1986 on U.S.-Mexican relations. To date, IRCA has been implemented pragmatically, but it reflects anxieties in the United States, arouses concern in Mexico, and may lead to actions that damage bilateral relations. However, the issues that Americans raise about immigration are similar to those that Mexicans raise about foreign investment. Parallels also appear in the laws each country has enacted to deal with these issues. The authors conclude that nationalist mindsets in both countries should be questioned. They suggest that the flows of immigration and investment may be equally good or bad for both countries. As economic and social integration deepen the two countries' interdependence, harmonized views will be needed about both flows in both countries.