The following is an excerpt from FOX News Sunday, Jan. 11, 2004.

CHRIS WALLACE, HOST, FOX NEWS SUNDAY: Mr. President, thank you so much for joining us. And welcome, sir.

VICENTE FOX, PRESIDENT OF MEXICO: Thank you, Chris. Very glad to be with you and your audience.

WALLACE: I know that immigration reform is one of your top foreign-policy goals and that you have said that the Bush plan does not go far enough. What will you say to the president when you meet with him in Mexico?

FOX: I say that's a process. I think that in life you have to get what is real and what you have at hand and not keep on dreaming all the time. And what he is proposing is real, it's interesting.

WALLACE: Well, Mr. President, when you say it's a process, that sounds like you feel it's a beginning but not an end.

When you talk about the two nations working together, does that mean that you'd like to see all immigration barriers removed, so people could work, could live in either country as they chose?

FOX: Well, on the long, long term, yes, I think that would be the best for our two nations, or our three nations including Canada. On the long term, this North American bloc can be the leading bloc on the world and be the most competitive bloc on the world by working together and, through that, be able to keep increasing the quality and the level of life of our citizens.

WALLACE: But, as you well know, President Bush has told the American people this is not in any sense an amnesty, it does not put these workers on the path to citizenship. In fact, when their visas run out, they will have to leave. That sounds like that is not what you would like to see.

FOX: We are not looking for an amnesty from Mexico. It's not that we're looking for this Mexicans working productively in the United States to become U.S. citizens. They like tacos, they like their families, they like their community, they like Mexico. Unfortunately, they don't have the opportunities that they would like to have as persons, so that's why they move.

WALLACE: Do you really think it's just a coincidence that President Bush has come up with this plan, returned to this idea, during an election year, when Hispanic voters are very important to him?

FOX: Well, as you well know, in politics timing is an issue, a critical and a strategic issue. And you have to find that proper timing for driving ahead the issues.

And this is what President Bush has considered, that the time for this idea is now. And we're with him, and we will be working with him to convince everybody that it's a good proposal for both of our nations.

WALLACE: Mr. President, let's talk about timing, because you were pushing for immigration reform in 2001, and then, after 9/11, President Bush put it on the back burner.

Do you now feel that homeland security, the terrorist attack, was a legitimate reason for shutting this issue down for more than two years?

FOX: Well, I think so. I think so. And this is one conviction that President Bush has, and he's acted consistently on this. And the amount of time, the amount of budget, the amount of effort that has been dedicated to this made other issues to lag behind. That's why I talk about timing. But now I think the time has come for our bilateral relationship to be strengthened.

WALLACE: President Bush and you came into office at almost the same time. In fact, the president's first foreign trip was to your ranch in Mexico. But there's a perception that relations between the two of you went into the deep freeze for a while. Would it be fair to say that things got a little bit hot and cold there?

FOX: Well, it has ups and downs, any relationship. But we have never weakened our relationship or our friendship and our convictions.

We keep on working with the same passion. So we can speak frankly to each other, and we can take positions that sometimes are different, but we understand each other. And of (ph) it all is the relationship itself.

WALLACE: One of the sorest issues was your opposition to the war in Iraq. Now, after Saddam Hussein's capture and seeing the U.S. trying to establish a democracy there, do you sometimes think that perhaps the president was right and that you were wrong?

FOX: No. No. I think that by different roads you can get to Rome.

The main purpose is to rescue Iraq from the dictator, and that was accomplished. Number two is to move Iraq into a democratic nation, a free nation, with citizens who start enjoying better opportunities to their own development.

And this route, it's working as well as maybe the other one could have worked.

WALLACE: Do you still think there was another way to deal with Saddam Hussein, though, short of invasion?

FOX: Well, I am not sure that we have to go back to the discussions and the positions then. But our position was very clear that multilateralism is a key issue on this 21st century, and it should be enhanced and developed to the better of all nations.

WALLACE: Mr. President, let's turn to homeland security. During the terror alert the last few weeks, the U.S. barred several Mexico flights from flying to the U.S. and, in fact, turned one around in the air.

Are you satisfied that the U.S. had legitimate reasons to cancel the flights? And did the U.S. provide Mexico with enough information?

FOX: Well, let me put it this way. You cannot take risks when life or death is involved. When you get information that some act of terrorism might happen, or when you get intelligence information that you could face problems, you better act. And that's what we did.

WALLACE: And finally, Mr. President, I know you're going to be meeting with President Bush starting Monday at the summit. Besides immigration reform, what is at the top of your agenda?

FOX: The other one is this North American initiative, which is the concept of a NAFTA-plus. How can we three nations — Canada, United States and Mexico — take steps further for this next 10 years of NAFTA?

And there, we're talking about an energy policy, a security NAFTA policy, an advance in financial institutions interchanged (ph) and other matters, so that we remain competitive and meet the challenge of Asia and China.

WALLACE: Mr. President, we want to thank you so much for joining us here on "Fox News Sunday." Thank you very much.

FOX: Certainly. Thank you very much.