The goal of Zona Libre was to equalize the imbalanced economic environments that had resulted after the Mexican–American War on either side of the Rio Grande River, which had become the international border between the United States and Mexico under the Treaty of Guadalupe-Hidalgo.
[5] Even worse, merchants grew more and more frustrated as they watched towns spring up and prosper on the American side of the border just opposite theirs, where business flourished without the high costs of the Mexican tariff system.
In their book The Zona Libre, Samuel E. Bell and James M. Smallwood argue that after the Treaty of Guadalupe-Hidalgo, many American border towns prospered at the expense of Mexican villages.
Finally, in 1858, the ad interim Governor of Tamaulipas, Ramón Guerra, established the Zona Libre by special decree in an attempt to grow the economic prowess of his state at the petitioned request of his citizens.
Under this decree, goods remained duty-free so long as they stayed within the boundaries of the free trade zone, loosely outlined by Guerra.
Most Americans merchants viewed the free trade zone in a positive manner as an opportunity to make money, and moved across the border to do just that.
[17] Finally, in July 1905 after over a decade of movements against Zona Libre, Mexican President Díaz executively abolished the free trade zone.
Díaz cited his actions on the reasoning that the expansion of the railroad system and increased communications across the border no longer necessitated a free trade zone.
The business prospects in the district were never more encouraging or the various industries more active, and there never was a time when the customs officials were handling more revenues from the ports and exports.