AMLO’S FINAL ACT: A growing number of American lawmakers and U.S. industry groups are warning that Mexico’s proposed constitutional reforms, which would upend the country’s judiciary, could undermine bilateral economic interests by violating the USMCA. Mexico’s package of reforms — which includes a plan to replace federal judges with ones that are popularly elected — could soon pass through its legislature. The judicial overhaul is spearheaded by President Andrés Manuel López Obrador and backed by president-elect Claudia Sheinbaum, who is slated to take office in October. “The people of Mexico should know that if some of these reforms are implemented, it could put our two countries on a negative trajectory as we head into renegotiating USMCA in 2026,” said House Foreign Affairs Committee Chair Michael McCaul in a statement posted to X on Thursday. His opposition comes on the heels of a similar assessment from lawmakers in the upper chamber. “We are deeply concerned that the proposed judicial reforms in Mexico would undermine the independence and transparency of the country’s judiciary,” said Sens. Ben Cardin (D-Md.), James Risch (R-Idaho), Tim Kaine (D-Va.) and Marco Rubio (R-Fla.). Background needed: Supporters say the package of reforms will crack down on corruption. Beyond the judiciary overhaul, other proposed measures would restrict the ability of the state-owned electric utility of Mexico, the Federal Electricity Commission, from partnering with private firms; eliminate certain oversight and regulatory agencies; limit water concessions; prohibit open-pit mining and fracking; and restrict the use of genetically-modified corn. A Congressional aide told Morning Trade that “proposed reforms to electricity, mining, water and agriculture, and the elimination of independent oversight bodies, contradict existing commitments in USMCA, undermine transparency and threaten to exacerbate trade disputes at the expense of workers and businesses in the U.S., Mexico and Canada.” Industry view: The U.S. Chamber of Commerce warned the proposals risk diminishing “guarantees of protection for business operations in Mexico,” in a statement last week. Several other industry groups, including the National Association of Manufacturers and the National Mining Association, sent a letter making similar claims. They asked Secretary of State Antony Blinken to “raise these concerns and recommend to the incoming Sheinbaum government a slower, more deliberative approach.” What to watch: In a signal of contention to come, López Obrador said he would pause relations with the U.S. and Canadian embassies after facing criticism from officials. “Hopefully there will be a statement from them that they are going to be respectful of the independence of Mexico,” he said in a recent daily news conference.
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