Coparmex warns of foreign capital leaving Mexico after judicial reform

The uncertainty that the country is experiencing after the approval of the reform to the Judicial Branch and Plan C is moving forward, causing investments to be cancelled and go to other destinations like Texas and Honduras, said José Medina Mora, president of Coparmex.

“Investment projects are being cancelled, they are going to other countries, it is remarkable how the state of Texas has been able to attract a lot of investment that could have reached Mexico.

“They have left Ciudad Juárez (Chihuahua) 14 maquiladoras in the six-year termthis year alone they have been lost 44 thousand jobs“.

When questioned about the effects that the reform to the Judicial Branch that has already been published will have, the business leader exemplified that a maquiladora I had planned to build two plants in Mexico, finally decided to go to Honduras.

“We are already seeing the consequences of increasing legal uncertainty. Hay Investments that are stopped, cancelled or moved to other countries“s,” he said after the opening of the “International Innovation and Entrepreneurship Fair 2024.”

He commented that there are also international companies established in Mexico, whose corporates have decided that they do not want to invest any more in the country.

Judicial reform in Mexico violates the USMCA

“The approval of the reform to the Judicial Branch violates what we agreed on in the T-MEC and this will have consequences, the governments of the United States and Canada will be able to make a request for information and subsequently convene an international panel, which if it is convened we will lose it and This will have consequences for the country.“, he anticipated.

He considered it regrettable that the party in power (Morena) have not heard to the opposition, to the experts, or to the workers of the Judiciary, and that this is because he has a qualified majority in Congress.

Using a qualified majority is like applying a steamroller

“The use they have given to the qualified majority is apply the steamrollernot listening to the opposition. For more than 40 years in the country, changes to the Constitution were agreed upon with the opposition.

“It seems that the The intention of Morena and its allies is to apply the steamroller, “both in the Chamber of Deputies and in the Senate. We are back to a country like Mexico in the 1970s when there were no counterweights or autonomous bodies,” said the business leader.

Judicial reform will reduce legal security for investors: IMEF

For its part, the Mexican Institute of Finance Executives (IMEF) warned that the reform of the Judicial Branch may reduce confidence in institutions and legal security of investors.

“A level of distrust will be generated with the approval of the Judicial reform, which will result in a significant brake on investments,” said J.Jose Domingo Figueroa Palacios, president national of Imef.

“That would have a significant impact on the great opportunity we currently have, which is the relocation of companies,” he added during the monthly press conference.

The Institute indicated that, with the reform published in the Official Gazette of the Federation (DOF), could be security at risk for investors to have the possibility of settling commercial disputes in courts specializing in energy, mining, telecommunications or any other type of matters.

In this regard, Victor Manuel Herrera, President of the National Committee for Economic Studies of IMEF, said that there is great uncertainty about what will happen in the future.

“If you have a commercial dispute with a government action, who will defend you, how long will it take to process in court, how long will it take to put together the new scheme of judicial reform,” he said.

“There are many investors who are saying that I’d rather wait to make my investment until I have more clarity on how things are going to work in Mexico,” he added.

The Institute added that in case the elimination of autonomous organs happenswould be had serious consequences for the economy and investor confidence, This would mean that there would be no need for specialized technical organizations necessary to avoid biased government intervention that alters technical decisions on free competition and concurrence in the Mexican market, among other situations.

This, he said, would reduce or eliminate the opportunity represented by the relocation of companies, by slowing or delaying the investments that Mexico needs to grow above 2 percent of the Gross Domestic Product (GDP), which is the average growth rate for the present century.

He noted that this growth and a better distribution of wealth is crucial to reducing poverty and inequality in the country.

It should be noted that, at the end of 2024, public finances will show a deficit of approximately 5.9%, which will result in limited room for maneuver in the 2025 budget and in the following years.

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