Mexico’s Supreme Court judges have a hot offer on their desks that amounts, in effect, to this: Resign in the next few weeks and they can retain their pensions, or risk competing in an election next year where they would most likely lose these benefits.
If this sounds like a not-so-subtle extortion, that is because it is. At the same time, it is just a petty detail in the radical, controversial judicial overhaul that would put the country through the experiment of picking its judges — including to the top court — by popular vote.
The world of Mexican President Andres Manuel Lopez Obrador has no room for finesse, legal technicalities or consensus-building. In his last five weeks in power, the leader known as AMLO is pressing ahead with a dramatic revamp of Mexico’s constitution to leave an indelible nationalist mark on the country’s politics and public life.
Illustration: Yusha
Emboldened by the largest electoral triumph since Mexico started having competitive elections, AMLO’s Morena party and its allies are marching to pass a set of significant legal reforms. The result would be reduced government oversight and less public transparency; the loss of autonomous regulatory bodies, which would be folded back under the umbrella of political authorities; higher risks to investment; and a more intrusive role for the military in public security. All in the name of democracy, defending the people and fighting neoliberalism, of course.
Investors, trade partners and ordinary Mexicans are right to be worried, because the result would be more legal and political arbitrariness. It is not that Mexico’s existing rule of law was particularly stellar, or that this transforms the country into a dictatorship, as some argue. However, the proposed changes go in the opposite direction of what the nation needs and add volatility to the start of Claudia Sheinbaum’s presidency next month. The peso slumping more than 13 percent against the US dollar since the June 2 presidential election, the worst performance among the world’s top currencies, signals severe storms on the horizon.
Take the attention-grabbing reshuffle of the judicial system: It cuts the requirements and experience needed to be elected judge and caps salaries of new officials, discouraging professionalism. Establishing time limits for judges to resolve cases might result in rushed decisions to avoid reprimands. It is not a stretch to imagine lobbying groups or even organized crime bending the election of judges for cases or jurisdictions that might touch on their interests. Justices might be tempted to make rulings according to electoral criteria instead of taking impartial decisions. Cases where oral arguments have already been heard would need to be retried if judges are dismissed, possibly hurting victims, said Lisa Sanchez, head of think tank Mexico Unido Contra la Delincuencia.
On top of all these shortcomings (and the list is longer), the process of selecting more than 850 new judges from potentially more than 5,200 candidacies in June (and another bunch in 2027) is likely to paralyze the day-to-day operations of the courts, affecting companies and ordinary citizens on top of adding an extra burden to the new government, which must also absorb functions now performed by autonomous bodies. The current indefinite strike by judicial employees is only a taste of things to come.
“These several reforms look to completely change the institutional framework of the country. There will be a very traumatic transition,” Sanchez said.
There are valid arguments to push for a reform: Mexicans do not feel the legal system works in their favor, with cases dragging on or remaining unresolved. In his contempt for elites, AMLO might well think that letting voters pick their magistrates at least reduces the influence of the judicial establishment; polls show Mexicans like the idea, even if this support appears to be falling.
However, do not get confused: The underlying reason is that in AMLO’s reductionist view, there cannot be a rival bureaucracy that challenges his wisdom and hegemonic project. The Supreme Court has been the most effective counterbalance to his power in the past six years, blocking several presidential initiatives. Removing all 11 Supreme Court judges, even those appointed by him, is payback for the self-obsessed president, who probably still does not forgive court president Norma Pina for not standing up to greet him during a public event last year.
As Morena head Mario Delgado cheerfully said, approving the reform would be a “big gift” to the outgoing leader. No further questions, your honor.
With the new system, top judges would think twice before ruling against the wishes of the president, which is a powerful reason for Sheinbaum to back this reform.
Some say the president-elect might be privately damning her mentor’s excesses. However, notwithstanding the rumors of infighting, still take her at face value when she says she believes the reform would strengthen the judicial system, not the opposite.
That is where Sheinbaum’s first big presidential challenge resides: This view collides with the interests of big business, Wall Street and the US and Canadian governments, key allies in the US-Mexico-Canada Agreement (USMCA) trade treaty. By focusing on top courts, the reform is more likely to impact big cases including corporate disputes, explaining the unusual avalanche of criticism from Mexican and international stakeholders.
The result is more uncertainty around concessions, competition or fiscal issues, as highlighted by Morgan Stanley analysts last week. Good luck finding the billions in investment the country desperately needs to upgrade its energy, water and transportation infrastructure.
As US Ambassador to Mexico Ken Salazar said, the reform is a “major risk” to the functioning of Mexico’s democracy.
AMLO, never shy about opining on internal US affairs, quickly denounced the comment as interventionism. In typical grandstanding fashion, he announced a “pause” in his personal relations with the patient Salazar — yet more deadweight that Sheinbaum would have to lift once in power.
In a way, the new administration is inheriting a paradoxical situation: One of the country’s strongest political mandates overlaps with the most fragile macroeconomic outlook in years, despite Mexico’s great long-term potential. Activity is slowing, inflation remains stubbornly above 5 percent, the fiscal deficit is the largest since the 1980s, the US economy is gearing down and insecurity is rife. This is not the moment to be dismissive of the honest concerns your partners and financiers might have.
The Mexican government is surely free to choose its own destiny, but the country cannot be both an integral part of North America’s trade bloc and a nationalist fortress where the rule of law depends on your political allegiance or passport. Sheinbaum would have to consider her best path, particularly with the USMCA up for revision in 2026. However, in the end, something has to give.
JP Spinetto is a Bloomberg Opinion columnist covering Latin American business, economic affairs and politics. He was previously Bloomberg News’ managing editor for economics and government in the region. This column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.
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