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Under the new judicial reforms, judges will be elected by popular vote. | Photo Credit: AFP
Controversial judicial reforms promoted by Mexico’s outgoing president are straining diplomatic relations with the United States, its neighbour and major trading partner, as well as rattling financial markets.
U.S. Ambassador to Mexico Ken Salazar warned that the changes would “endanger” trade relations that “depend on investor confidence in Mexico’s legal framework.”
He told reporters last week that the reforms, which would see judges elected by popular vote, could pose “a major threat to the functioning of Mexico’s democracy.”
In particular, they “could make it easier for cartels and other bad actors to take advantage of politically motivated and inexperienced judges,” Mr. Salazar said.
Canada, which is a member of major free trade partnerships with the United States and Mexico, has said investors are concerned.
“My investors are concerned, they want stability, they want a judicial system that works even when there are problems,” said Canadian Ambassador Graeme Clark.
Mr Salazar’s comments particularly angered Mexican President Andrés Manuel López Obrador, who on Tuesday declared a “pause” on talks with the US diplomat.
At the same time, the leftist leader clarified that he did not mean that there would be a rift in relations with the government of US President Joe Biden.
Days earlier, Mr López Obrador said his government had sent a diplomatic note to protest Washington’s “interventionist” statements on the matter.
The proposed reforms are supported by Mexico’s incoming president, Claudia Sheinbaum, who will take office in October.
Ms. Sheinbaum, who would be the country’s first female president, won a landslide victory in June 2 elections, but the Mexican stock market and currency saw sharp drops soon afterward on investor concerns about reform plans.
In his first press conference after the election, Sheinbaum promised “wide consultation” on the proposals and said this would include bar associations, law schools and judges.
Limited Time
But Congress is due to meet on Sunday, so Mr. López Obrador has a month to push through reforms, after which Ms. Sheinbaum will replace him.
The bloc led by his ruling Morena party would receive more than the two-thirds of votes needed in the lower house to amend the constitution.
In the upper house, the Senate, she will fall a few seats short of a majority, but analysts believe she can get the votes needed to make up the gap.
British consultancy firm Capital Economics said in a note to clients that the proposed changes could result in “the politicization of the judiciary” and have “a potentially major negative impact on Mexico’s business environment.”
“The politicisation of the justice system may raise concerns about whether disputes between businesses and government can be resolved fairly,” it says.
According to experts, these disagreements could complicate the review of the continent’s free trade agreement, which is due in 2026.
Political risk analysis firm EMPRA said another proposed reform seeking to dismantle autonomous regulatory agencies “poses a significant risk” to the agreement.
It said the change would violate provisions of the trade agreement that aim to protect the autonomy of regulatory agencies to prevent state interference.
The tensions come at a time when Mexico hopes to benefit from the “nearshoring” trend of companies moving their manufacturing operations from Asia closer to U.S. markets.
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