Following the decisive electoral victory of Mexican President-elect Claudia Sheinbaum on June 2, the governing party’s coalition secured a two-thirds majority in Mexico’s lower chamber and only needs one more seat to attain a supermajority in the Senate. Mexico’s new Congress is currently advancing constitutional amendments that would undermine the country’s status as a strategic partner for the U.S.
The proposed series of constitutional changes would weaken Mexico’s economic regulatory landscape, degrade its investment climate, dissolve checks and balances, and undermine the country’s ability to fulfill international commitments, including the U.S.-Mexico-Canada Agreement. If approved, these legal shifts could jeopardize North America’s competitive edge, disrupt nearshoring (the practice of relocating production closer to consumer markets), risk billions of dollars in U.S. investments in Mexico, and complicate the U.S.-Mexico-Canada Agreement 2026 review. Three key proposals risk downgrading the U.S.-Mexico partnership and could stunt growth for decades.
The first targets Mexico’s justice system. Over the years, Mexico’s Supreme Court has found several of President Andrés Manuel López Obrador’s policies unconstitutional, including efforts to undermine private investment in the energy sector and place civilian public security forces under military control. If approved, this change would subject all Supreme Court justices and federal judges to be elected by popular vote without clear qualifications. It would severely weaken the judiciary’s role as a check on presidential power, leaving judicial decisions vulnerable to political influence and the participation of organized crime.
Instead of tackling corruption and impunity within Mexico’s judiciary, this overhaul could cause significant delays, pauses or retrials in cases involving human rights and investments outside the U.S.-Mexico-Canada Agreement’s coverage. Under the agreement, investors can only pursue claims in the oil, gas, power generation, infrastructure and telecommunications sectors. For disputes in other sectors, they must first go through Mexico’s domestic courts before seeking arbitration.
Another proposal seeks to eliminate independent watchdog agencies, dismantling Mexico’s antitrust agency, along with the Federal Economic Competition Commission, the Federal Telecommunications Institute and the Energy Regulatory Commission. Their functions would shift to executive branch agencies like the Ministry of Economy and the Ministry of Energy. These changes would strip away critical checks on presidential power and directly conflict with Mexico’s commitments under the U.S.-Mexico-Canada Agreement to grant fair treatment to U.S. companies and investors. By eroding legal certainty, the change would cripple Mexico’s nearshoring potential, drive investment elsewhere and weaken North America’s global supply chain position.
AMLO has also included a proposal that aims to ban genetically modified corn for both harvest and human consumption. As the U.S.’s second-largest agricultural export market, Mexico imports over $5.3 billionworth of corn annually. Such a ban could lead to the loss of thousands of U.S. agricultural jobs and threaten food security in Mexico, as domestic production would likely be unable to meet the country’s corn demand.
If approved, these changes would severely limit the country’s growth prospects and its ability to create well-paying jobs that help mitigate northward migration. The resulting legal issues and business uncertainty could trigger billions of dollars in tariffs if U.S. and Canadian authorities or firms request formal dispute settlement under the U.S.-Mexico-Canada Agreement, as well as significant economic losses for consumers and workers across North America. In other words, Mexico risks undermining the conditions that foster job creation and investment growth. Additionally, the potential for trade disputes and economic disruptions could deter new investors and negatively impact nearshoring opportunities.
These proposals pose a serious risk to the U.S.-Mexico-Canada Agreement’s upcoming review, potentially stalling negotiations with U.S. authorities and triggering demands for changes from the U.S. Congress during the 2026 review process. This heightened scrutiny could complicate negotiations and result in unsuccessful outcomes in subsequent years. Ultimately, the changes could jeopardize the agreement’s renewal and increase the risk of its expiration in 2036, undermining the long-term stability and benefits of the U.S.-Mexico-Canada Agreement.
If approved, the proposals will undermine Mexico’s trade and investment commitments under the U.S.-Mexico-Canada Agreement, making Mexico a less reliable partner for the U.S. They threaten to destabilize Mexico’s investment climate, disrupt regional integration, weaken supply chain resiliency and undermine democracy. When she takes office Oct. 1, Claudia Sheinbaum, with the strongest mandate in Mexico’s modern history, must prioritize long-term growth and regional cooperation, ensuring these changes do not erode the hard-won progress that has made North America a global leader in trade and investment.
Abed is the Mexico Institute director at the Wilson Center and lives in Washington, D.C. Marroquín Bitar is the North America Scholar at the Wilson Center and lives in Washington, D.C.
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Publish date : 2024-09-09 13:00:00
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