At a time when an alarming number of Latin American countries are eschewing free markets for populist nationalism, the United States needs all the friends it can get in the hemisphere. Yet the Bush administration has largely missed a promising opportunity to promote deeper market reform and democracy next door in Mexico.

Two conservative presidents who like to wear cowboy boots somehow didn't get along. Now approaching the end of their time in office, much remains to be done to integrate our markets and share the burden of securing the North American continent.

George W. Bush was a straight-shooting governor from Texas who wanted to improve U.S.-Latin American relations. Likewise, Vicente Fox Quesada was the reform-minded leader from Guanajuato state who became Mexico's first opposition party president in 71 years. But politics and miscommunication jinxed the alliance.

For one thing, the 2001 terrorist attacks on the United States consumed the energies of the brand-new Bush administration's foreign policy team and dramatically reshaped domestic political discourse.

Fox missed the significance of this, relying on the judgment of a quirky foreign secretary he appointed to garner support from the Mexican left. On his secretary's advice, Fox made migratory reform with the United States the centerpiece of his foreign policy and rigidly adhered to it despite glaring signs that the timing was wrong.

U.S. officials knew Fox was badly advised. Yet, the Bush administration turned a cold shoulder instead of trying to educate him, his congress, or the Mexican public on American perspectives. That shoulder grew even colder after Mexico withdrew from the Rio Treaty of Reciprocal Assistance in 2002 and declined to support the United States in liberating Iraq.

Just last month, President Bush hosted a summit for President Fox and Canadian Prime Minister Paul Martin at his Crawford, Texas ranch. Again, miscommunication was at play. Press accounts suggested that Fox thought he was going to discuss a broader vision how the North American Free Trade Agreement might develop into a common market and how Canada, the United States and Mexico could collaborate on a tri-national security zone.

Instead, the White House used it as an opportunity to shake hands on small details such as developing common inspection procedures at border entry points, harmonizing rules governing the movement of goods as well as cooperating to reduce dependence on overseas sources of energy, an unrealistic goal considering the United States' huge petroleum appetite that dwarfs total North American production.

To their credit, Bush and Fox mentioned the problem of hundreds of thousands of undocumented Mexican migrants streaming into the United States each year. President Bush said he needed U.S. Congressional action to approve a guest worker program, but declined to suggest what Mexico could do to create jobs at home and better educate workers to take advantage of them.

Half of Mexico's 40 million laborers work informally. Recently, there have been only enough new jobs to go around to a fifth of the 1 million or so that join the labor force each year.

At fault are political oligarchs who still control the core of the Institutional Revolutionary Party that ruled for seven decades, as well as the national leadership of the left-leaning Democratic Revolutionary Party. They oppose free market policies fearing loss of control over state monopolies and the rise of a broad, independent-minded middle class.

The Bush administration refused to hold them accountable while missing numerous opportunities to praise President Fox, such as when he passed a freedom of information act that encourages government accountability. He also successfully promoted civil service reform so that public servants are selected by merit, not political patronage. In addition, he helped establish a new, professional federal bureau of investigation and has dramatically increased Mexico's cooperation with U.S. authorities on border security and counter-narcotics.

In 2006 Mexicans will elect a new president. Absent pointed recognition of what Fox and his National Action Party have achieved, Mexicans could opt for an old-fashioned populist big spender such as Mexico City Mayor Manuel López Obrador. Currently under prosecution for violating court orders on a road construction project, López could well roll back Fox's democratic and free market achievements while retaining the misguided, migration-focused foreign policy that helps Mexico evade further reform.

But for now, George W. Bush talks about secure borders that will help keep terrorists out, while Vicente Fox insists that unemployed Mexicans have a right to work in the United States where economic pastures are greener.

Their words seem chosen to please disparate audiences. For the good of both countries, they should drop the posturing and use remaining encounters to foster better understanding so both countries can enjoy a more beneficial relationship.

Stephen Johnson is senior policy analyst for Latin America in the Davis Institute for International Studies at The Heritage Foundation.