Mexico’s Ruling Party Considering Changes to Judicial Reform to Stabilize Markets, Sources Report

By Diego Oré

MEXICO CITY – Mexico’s ruling party is considering modifications to its proposed judicial reform to address market concerns. One key change under discussion is a staggered election process for judges, intended to alleviate fears of a political takeover of the judiciary.

The initial proposal from outgoing President Andres Manuel Lopez Obrador alarmed investors, as it suggested the election of nearly 1,600 judges, including Supreme Court justices, by popular vote. President-elect Claudia Sheinbaum, who will assume office in October and is also from the ruling Morena party, has defended this proposal, arguing that judges should be elected.

However, to mitigate concerns, Morena plans to revise the reform. The proposed adjustments would involve staggered judge elections and the selection of participants by a technical committee after they pass suitability assessments, according to four party insiders familiar with the discussions.

Additionally, the lucrative trust funds for judicial workers are set to be safeguarded. This follows a contentious situation last year when Mexico’s Senate voted to eliminate 13 trusts for the judiciary, escalating tensions between the government and judicial authorities. The Supreme Court later overturned this decision.

Following the elections on June 2, which solidified a super-majority for Morena in the lower house of Congress, the Mexican peso fell 8% the subsequent week. Despite the market volatility, Lopez Obrador has denied any connection to the judicial reform proposals.

The outgoing president has pitched the reform, which also aims to reduce the number of Supreme Court judges from 11 to 9, as essential for transforming a justice system he claims "is not at the service of the people." Critics argue that electing judges via popular vote would politicize the judiciary in favor of Morena and its allies.

The Morena party also plans to take into account the upcoming 2026 review of the United States-Mexico-Canada Agreement (USMCA) in the adjustments to the reform. Concerns had been raised that the initially proposed popular election of judges could disrupt the operation of Mexico’s labor courts, meant to facilitate prompt resolutions of labor disputes under the USMCA.

Legislators are working to amend Lopez Obrador’s proposal to ensure it does not compromise the legal and commercial framework that the USMCA mandates to be "clear, transparent and predictable."

Senator Ricardo Monreal, who is expected to lead Morena in the lower house when the new Congress begins in September, emphasized that it is the legislators’ responsibility to incorporate changes that could enhance or modify the presidential proposal. He assured that all perspectives will be respected, and that the party will remain steadfast in its commitments amidst both internal and external pressures.