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MEXICO: An Introduction

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On July 1st 2018, Mexico had elections for many federal, state and municipal offices. At the federal level, Mr. López Obrador won the presidency with more than 50% of the votes and it is likely that his party, MORENA, will win majorities in both the Senate and the House of Representatives. The victory shows clamour for: change in the economic system to rescue more than 50 million people living in poverty, changes to insecurity, and an attack on corruption. Mr. López Obrador has indicated that he will redirect government spending and he will reduce current expenses of the government and increase investment. He has pledged to abide by the law, respect civil liberties, respect institutions including the autonomy of the Central Bank and work with the business community.

Mr. López Obrador's plans include (i) fostering internal production of foodstuffs, (ii) that all government purchases will be made through public bids monitored by society, (iii) the construction of two refineries, (iv) scrutiny of contracts under which oil fields were awarded to the private sector, and (v) USD200 of monthly support to the youth population neither in employment nor education. A number of the economic projects of the new administration will be financed through approximately USD20 billion of savings in cost-cutting strategies. Society and business will face a new environment, and as with any other major change, there will be winners and losers.

Over the past 12 months, the country has seen many changes and below is a summary of a few matters that are worth reviewing.

Business Environment 

The economy is expected to grow approximately 2.3% in 2018, in line with other years. This growth is insufficient and keeps over 50 million people at the poverty level and does not allow businesses to receive 1 million young people who join the labour market every year. Although foreign investment has continued to flow, the future of NAFTA withholds or delays projects and there is no clear calendar to complete the NAFTA negotiations. It is too early to anticipate the López Obrador strategy in the NAFTA negotiations but he will probably raise the national interest argument in many of the open points.

Mexico does not have independent investment protection treaties separate from NAFTA with the United States or Canada. If NAFTA is repealed or one country renounces its participation therein, the investors of such a country who have billions of dollars invested in Mexico will lose the investment protection benefits afforded by NAFTA.

Regulatory Improvement 

An important step towards competitiveness was taken with the General Law of Regulatory Improvement in May 2018. The main objectives of the law are to avoid regulatory inefficiencies, create clearer regulations and simplify filings with public entities. The law also promotes the participation of the private sector, civil society and academics in the National System of Regulatory Improvement to reduce regulatory burdens and create a national catalogue of regulations, filings and government services.

CONAMER (formerly COFEMER) is the National Regulatory Improvement Commission with strengthened authority to oversee regulatory improvement at federal and local levels. There are also obligations imposed on states and municipalities to improve their regulatory frameworks. A National Council and a National Observatory for Regulatory Improvement should be created to develop implementing regulations for the law and a long-term strategy. Finally, a mechanism of “Protesta Ciudadana” must be implemented as a means for citizens to formally complain about deficient services provided by public entities.

Fintech Law

Another legislative development is the enactment of the Law that Regulates Financial Technology Institutions (the “Fintech Law”).

The Fintech Law regulates, inter alia: (i) the organisation of financial technology institutions (“ITFs”) to operate either as collective financing institutions, i.e. crowdfunding platforms, or electronic payment funding institutions, i.e. e-money or e-wallet operators; (ii) virtual assets, such as cryptocurrency; (iii) certain obligations of financial entities regarding programming interfaces for applications (APIs); and (iv) the rendering of financial services through new technological models.

The Fintech Law aims to provide more certainty to users of financial services through digital platforms and other means and to provide small and medium companies funding in a regulated framework.

Supreme Court  

The Supreme Court recently ordered Congress to legislate on government spending for publicity and advertising. This is the first time that the Supreme Court has ordered Congress to enact legislation.

The Court stated that the omission of Congress to legislate on government spending for publicity and advertising purposes “violates freedom of speech, press and information…” and that “the absence of regulation on official advertising promotes an arbitrary exercise of the budget for social communication, indirectly restricting freedom of speech.”

To comply with the Court’s decision, Congress enacted the General Law of Social Communication. Although there has been criticism on the contents of the law, the Court’s decision was a major step to curtail the excessive use of public funds for government publicity.


The Federal Antitrust Commission (Commission) has stepped up enforcement of Mexican antitrust law over the past year in a variety of sectors such as banking, transportation, public bidding, manufacturing, real estate, energy, and food and beverages. The Commission has the power to obtain information from parties involved in the respective industries both in the form of written requests as well as on-site inspections. It has also developed a leniency and immunity programme to obtain information. The combination of active investigation by Commission officials and the means of enforcement provided by law have resulted in significant fines for economic agents found guilty of violating antitrust law. For instance, in 2017, the Commission imposed record fines almost 12 times as large as those imposed in 2016. In addition, the Commission has filed its first ever criminal complaint. As the governors of the Commission are independent of the government, I do not expect any major change in policy.


The largest infrastructure projects underway in Mexico are the New Mexico City International Airport (~USD13.3 billion), the new Port of Veracruz (~USD1.7 billion) and the public shared telecommunications network (~USD7 billion).

The new airport will have a capacity of 66 million passengers and is one of the largest in the world. The new port of Veracruz is expected to quadruple its installed capacity from 22 to 90 million tonnes. The shared telecommunications network intends to bring connectivity to 92.2% per cent of the country's population, one of the largest open access, wholesale telecommunications networks.

Other major programmes in place for infrastructure are in the hydrocarbons sector, with three rounds of tenders awarding major contracts for exploration and exploitation, and in the clean energy sector, with four power auctions awarding long-term PPAs for more than 7,500 MW.


It is still too early to see the tangible benefits of the National Anticorruption System. The implementing laws were enacted a little over a year ago. A number of states have not fully implemented the reforms and very few have satisfactory anti-corruption laws. At the federal level, the anti-corruption prosecutor and the specialised anti-corruption judges have not been appointed. Anti-corruption has been a central banner of Mr. López Obrador and we should expect important measures to combat corruption.