MONTERREY, MEXICO, NOV. 26 -- President Bush today began a two-day visit to Mexico that will focus on trade, drugs and other issues, pledging to move rapidly to negotiate a free-trade agreement that is a top priority of Mexican President Carlos Salinas de Gortari.

Arriving in this northern Mexican industrial city at midday, Bush immediately flew by helicopter to Agualeguas, a town of about 5,000 people 30 miles from the Texas border, where Salinas's family home is located. He and First Lady Barbara Bush attended a rodeo with Salinas and his wife, Cecilia, watched folk dancing in the town plaza, and walked to Salinas's house for lunch and talks.

The two talked mostly about their joint desire for a free-trade agreement, as well as about efforts to cooperate in the war on drugs, White House press secretary Marlin Fitzwater said in a statement. They also agreed to press for a cease-fire and a negotiated settlement to the 11-year-old civil war in El Salvador, which last week saw new attacks by leftist rebels.

Bush returned to Monterrey this evening for a festive reception and fireworks display in front of the Governor's Palace, where he hailed improved relations. "I believe that U.S.-Mexican relations have never been better," Bush said. Calling the relationship of "vital importance" to the United States, he added: "We will never neglect it. We are neighbors and we are friends."

The visit to Mexico is sandwiched between two longer foreign trips: last week's marathon to Europe and the Persian Gulf and a seven-day trip to five Latin American countries beginning on Sunday.

At the top of the agenda here is a proposed U.S.-Mexican free-trade agreement. Salinas, who has instituted significant economic change since his election in 1988, has pushed for the negotiations as a further spur to Mexico's economy.

In September, Bush notified Congress of his intention to move ahead on a "fast track." Congress is expected to approve the request by next spring, and both countries say such an agreement, which would eliminate trade barriers, could be completed by 1992.

"Our overall purpose can be expressed simply," Bush said in an interview with the Mexican news agency Notimex last week. "We want to increase the economic well-being of both our people."

American labor unions fear that such an agreement will eliminate many U.S. manufacturing jobs because of low wages in Mexico. But Fitzwater said today, "We want a free-trade agreement that would create jobs."

Mexico is the third-largest U.S. trading partner, behind Canada and Japan, with about $52 billion in goods exchanged in 1989.

Canada, which already has a free-trade agreement with the United States, has asked to become a partner in the U.S.-Mexican trade negotiations. Fitzwater said a meeting of the three countries will be held in Houston on Tuesday.

But Bush said in his interview last week he would not allow Canadian interests to get in the way of the U.S.-Mexico negotiations.

U.S. Trade Representative Carla Hills said today that Bush and Salinas are not expected to discuss oil during their trade talks, although Mexico's oil industry will likely be part of the eventual trade negotiations. At present, the Mexican consitution prohibits foreign investment in its oil industry.

Bush is expected to give Salinas an update on the Persian Gulf crisis. Mexico increased its oil production by 100,000 barrels a day to help offset production lost by the invasion of Kuwait and the resulting trade embargo against Iraq. But because of diminished investment in the oil industry during the 1980s, Mexico does not have the production capacity to take advantage of the demand for oil in the way that Venezula did after the invasion.

Bush and Salinas also are expected to talk about efforts to fight illegal drugs, although the dispute over the prosecution of a Mexican doctor implicated in the killing of Drug Enforcement Administration agent Enrique Camarena clouds the discussions. Mexico said the doctor was kidnapped from Mexico and brought to the United States.

With illegal immigration -- much of it from Mexico -- on the rise in the United States for the first time since enactment of the 1986 Immigration Reform and Control Act, Bush and Salinas are also expected to address that issue. This is their fifth meeting since Bush became president.