Sheinbaum Becomes Mexico President Amid Worries Over Business Environment 

As Claudia Sheinbaum ascends to Mexico’s presidency this week,she is carried to power by the momentum of her Morena party and its agenda of constitutional reform. 

Few would dispute the sovereign right of a duly elected government to pursue what it sees as its mandate. But it is also true the global business community, after investing billions and creating jobs, has an interest in the direction Mexico is heading.  

And for business, the reforms are a source of concern, said former U.S. Ambassador to Mexico, Roberta S. Jacobson, who appeared last month on The Call, a morning video update offered as part of the Chamber’s Global Intelligence Desk.  

Jacobson said at least five aspects of the package of 18 reforms and two legislative initiatives are likely to violate the USMCA, the treaty between Mexico, Canada and the U.S., one of the world’s most powerful trading blocs.  

The reforms would “virtually eradicate a level playing field for foreign businesses,” Jacobson said. “I think this is really very worrisome for the future.”  

Mexico’s economy has benefited enormously from the investment of its neighbors, who are ready to expand their presence under the right circumstances.  

But the reforms are sparking worries, not just among businesses, but also among many in Mexico’s technocratic class, the bureaucrats, professionals and entrepreneurs who helped build Mexico’s nascent democracy against huge odds, including the persistent and growing threat of violent crime by drug cartels.  

Sheinbaum – rightly celebrated as Mexico’s first woman to be president – has legions of supporters who are urging her to defy critics and push through the controversial changes started by her predecessor, Andres Manuel Lopez Obrador, as the promised platform of a political movement that achieved a significant victory in June elections. 

The Morena party – largely the creation of Lopez Obrador, or AMLO, as he is known – achieved a supermajority in congress on Sept. 1, giving the outgoing president a full month to execute the judicial piece of his reform package, perhaps the most controversial of the Morena agenda, before he stepped down this week and gave power to Sheinbaum, his hand-picked successor.   

Amid protests, AMLO pushed through a complete judicial overhaul that will subject all of Mexico’s judges, from the local benches to the Supreme Court, to election by popular vote, a move that risks politicizing the courts, Jacobson said, adding that few precedents exist for the success of such judicial reform.  

All signs point to more reforms coming, though the scope, pace and support for those changes remain unclear.  Some will either weaken – or eliminate – independent agencies that allow for an independent check on the power of the executive branch. Still more would bolster state-owned enterprises at the expense of the private sector.  

The Chamber’s Neil Herrington, Senior Vice President for the Americas also joined The Call. He issued a statement earlier this year on the reform agenda.  

About the authors

Jay Sapsford

Jay Sapsford is Senior Vice President for Global Risk Analysis and helps lead the Chamber’s efforts in assessing geopolitical and economic risks that impact the business community. He plays a key role in identifying global trends, risks, and opportunities on behalf of the Chamber’s membership.

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