On September 15, 2024, President Andrés Manuel López Obrador (AMLO) signed a controversial law that allows for the election of all judges in Mexico by popular vote, making Mexico the only country to implement such a system [17906549]. This significant reform aims to address corruption within the judiciary, which AMLO has described as 'rotten' [17906549]. The law mandates elections for Supreme Court justices and high-level judges to occur in 2025 or 2027, further entrenching the political influence over the judiciary [17906549]. Critics, including U.S. Ambassador Ken Salazar and UN special rapporteur Margaret Satterthwaite, have raised alarms that this could undermine judicial independence and expose judges to political pressures and organized crime [17906549].
The reforms have sparked widespread protests, with demonstrators storming the Senate on September 10, 2024, in an attempt to disrupt the debate surrounding these changes [17906549]. The Mexican Senate subsequently approved the reforms with an 86-41 vote, raising serious concerns among investors regarding legal impartiality and the potential politicization of court rulings [483d02fa]. While AMLO argues that the reforms are necessary to combat corruption within a historically weak judicial system, critics warn that they threaten democracy and the rule of law [42488a29].
The incoming president, Claudia Sheinbaum, who won the election on June 2, 2024, is set to take office on October 1, 2024. Her party's coalition holds a two-thirds majority in Mexico’s lower chamber, positioning her to advance the proposed changes, which could destabilize Mexico’s investment climate and undermine the country’s commitments under international agreements, notably the U.S.-Mexico-Canada Agreement (USMCA) [fb139a35].
U.S. senators have expressed concerns that the proposed reforms may contradict USMCA commitments, with House Foreign Affairs Committee Chairman Michael McCaul warning of potential negative impacts on U.S.-Mexico relations [7a4a3a3b]. Moody's Ratings has warned that the reforms pose risks to Mexico's economic strength and the independence of its judiciary, with experts like Jason Marczak highlighting fears that judicial decisions may be swayed by public opinion rather than law [a0e16ee1]. The Mexican peso has already lost over 10% of its value following the June elections, reflecting investor unease regarding the stability of Mexico's legal framework [42488a29].
U.S. Ambassador Ken Salazar has emphasized that these reforms pose a 'risk' to democracy and could jeopardize U.S.-Mexico commercial relations, highlighting the need for a strong and independent judiciary [cb93eeb3]. Similarly, Canadian officials have voiced apprehensions about the potential trade impacts under the T-MEC agreement [42488a29]. Coparmex, a business organization, has expressed worries about institutional fragility affecting foreign investment, while Oxford Economics forecasts a potential 12% drop in investment and increased recession risk in Mexico [a0e16ee1].
Experts warn that if these constitutional changes are approved, they could risk billions in U.S. investments and complicate the review of the USMCA in 2026, with the potential to threaten food security in Mexico, as the U.S. imports over $5.3 billion worth of corn from Mexico annually [fb139a35]. Proposed reforms include the popular election of over 1,600 judges, raising investor concerns about legal consistency and the impact on regulatory agencies critical to USMCA standards [7a4a3a3b]. Protests and strikes have erupted within the judiciary, with judicial workers, legal scholars, and students opposing the reforms. Critics, including María Josefina Gamboa, have condemned the ruling party's approach, warning that it could lead to the erosion of checks and balances in government [42488a29].
As the international community closely monitors the situation, analysts emphasize that the politicization of the judiciary could severely impact Mexico's business environment and complicate negotiations regarding the 2026 free trade pact between the U.S. and Mexico [68710785]. The ongoing developments highlight the delicate balance between governance and economic stability in Mexico, as the nation grapples with the challenges posed by organized crime and lawlessness, raising broader concerns about the future of democracy and economic health amidst rising tensions in U.S.-Mexico relations [3324949f][9696c71c].