Mexico's Ruling Party Considers Modifications to Judicial Reform to Soothe Market Concerns
By Diego Oré
Mexico City (Multibagger) - As Mexico's ruling party contemplates changes to a proposed judicial reform, investors are closely watching the developments. The original proposal by outgoing President Andres Manuel Lopez Obrador caused alarm among market participants, who feared that the changes would compromise Mexico's system of checks and balances.
One of the key concerns was the introduction of popular voting for the election of nearly 1,600 judges, including those for the Supreme Court. However, in response to these worries, the ruling Morena party is considering adjustments to the reform.
Under the new plan, the election of judges would be staggered over several years, and participants would be chosen by a technical committee after undergoing suitability tests. Additionally, the reform aims to safeguard the trust funds of judicial workers, a move that could help alleviate tensions between the government and judicial authorities.
Despite these efforts, Mexico's peso experienced an 8% drop in the week following the June 2 elections, which saw Morena secure a super-majority in the lower house of Congress. President Lopez Obrador has denied any connection between the market volatility and the proposed reform.
The outgoing president has defended the reform as a necessary step to overhaul a justice system that he believes is not serving the people effectively. However, critics argue that the popular election of judges could politicize the judiciary in favor of Morena and its allies.
In addition to addressing concerns about the judicial reform, the ruling party is also taking into account the upcoming 2026 review of the United States-Mexico-Canada Agreement (USMCA). The modifications to the reform aim to ensure that Mexico's legal and commercial framework remains in line with the provisions of the trade pact.
Senator Ricardo Monreal, expected to lead Morena in the lower house of Congress, emphasized the importance of incorporating feedback and perspectives from various stakeholders to enhance the presidential proposal.
Overall, the proposed modifications to the judicial reform signal an attempt to strike a balance between addressing market fears and ensuring compliance with international trade agreements. Investors will be closely monitoring the developments to gauge the impact on Mexico's political and economic landscape.