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Mexico's President Claudia Sheinbaum speaks, on the day of the 114th anniversary of the Mexican Revolution, in Mexico City, Mexico November 20, 2024.
Constitutional changes target regulatory agencies in Mexico
The lower house of Mexico’s Congress approved the text of a constitutional proposal to scrap oversight bodies on Wednesday, a first step in the ruling Morena party’s goal of eliminating autonomous institutions and consolidating power.
The change is just the latest in a series of reforms begun under former President Andrés Manuel López Obrador and carried out by his successor, Claudia Sheinbaum. Plans include overhauling the energy sector and judicial system, and guaranteeing a minimum wage that stays above inflation.
The bill passed by the lower house moves agencies overseeing government transparency, telecommunications, antitrust, energy, education, social policy, and other regulators under the jurisdiction of the executive branch, removing their institutional autonomy. It passed 347–148 and only needs one vote to pass the Senate before the legislative period ends on Dec. 15.
Sheinbaum backs the proposal, arguing that regulators are inefficient and that eliminating them will save taxpayer dollars. But her party has put forward a compromise to appease critics: decentralized agencies to ensure that antitrust and communications regulators remain independent, even as they are absorbed under the executive’s umbrella. The compromise is also meant to ensure the constitutional changes don’t contradict the terms of the trade deal with the US and Canada — which requires Mexico to have independent oversight bodies — ahead of renegotiations in 2026.
Mexico City’s Mayor Claudia Sheinbaum poses for a picture during an interview with Reuters in Mexico City, Mexico September 22, 2022.
Mexico’s first female president takes the reins
Claudia Sheinbaum will be sworn in as Mexico’s first female president — and first of Jewish heritage — on Tuesday, succeeding the wildly popular Andres Manuel López Obrador, whose shadow hangs heavily over the prospects for her administration. She won the June election with 60% of the vote, but as much as the people may support her, the left-leaning populist agenda she has promised to continue pursuing doesn’t always sit right with the investors the Mexican economy needs.
World leaders will be in attendance, including presidents of Brazil, Bolivia, Chile, Cuba and Guatemala, and a large US delegation led by first lady Jill Biden. However, Canadian Prime Minister Justin Trudeau will send his deputy prime minister in his place, and Russian President Vladimir Putin, whose invitation stirred controversy, will not attend. Argentinian President Javier Milei is also likely to skip, given his ideological opposition to Sheinbaum and AMLO’s left-wing ambitions.
After the celebrations, Sheinbaum has plenty on her plate. Far too many Mexicans face severe threats to their personal and communal safety from drug violence and corruption. Eurasia Group analyst Matias Gomez-Leauteaud says he’s watching how the new president addresses security in her inaugural speech, but such long-term goals may stay on the back burner for the moment.
“There are two key decisions for her in the short term, both related to economic policy: The 2025 budget, which must be presented at the latest on Nov. 15, and her selection of a new central bank deputy governor," he says. We’re watching whether Sheinbaum’s decisions can halt the slide of Mexico’s peso, which has fallen 14% against the dollar since she was elected.Mexico's President Andres Manuel Lopez Obrador hands over a ceremonial baton of command to Claudia Sheinbaum after she was elected by the ruling National Regeneration Movement (MORENA) as its candidate to succeed him in 2024 in the presidential election, in Mexico City, Mexico September 7, 2023.
Mexico’s president-elect pushes controversial judicial reform
In her first press conference since winning the Mexican election in a landslide earlier this month, president-elect Claudia Sheinbaumbacked a highly controversial plan to introduce a popular vote for the country’s Supreme Court justices.
The reform is the brainchild of current President Andrés Manuel López Obrador, aka AMLO, a charismatic left(ish) populist whose Morena party won a supermajority in Congress and fell just shy of one in the Senate.
Directly electing Supreme Court justices via popular vote would put Mexico in the company of just one other country that we know of: Bolivia, where AMLO’s ideological cousin Evo Morales instituted the practice in 2009.
AMLO and his supporters say the move would introduce more accountability to a system long dominated by corrupt elites.
But critics say it would dangerously politicize the justice system, upending the rule of law right as Mexico tries to catch an investment boom from “nearshoring” – that is, the trend of US-oriented companies moving their factories out of Asia as a way to skirt US-China trade tensions and avoid future global supply chain issues.
The skeptics could be right: The Mexican peso fell 2% after Sheinbaum’s comments.