The Legacy of the Pact for Mexico

March 4, 2014

Mexico’s Moment….The Legacy of the ‘Pacto por México’

A guest post by Yves Hayaux du Tilly, Partner at Nader, Hayaux and Goebel

A year ago the Pacto por México was made public and – as I wrote at the time  – shed light on the 95 commitments agreed upon by the main political parties in Mexico. These covered the development of rights and freedoms, economic growth, employment, competition, accountability and anti-corruption.

But despite the initial excitement it was not until major reforms on education, competition and telecommunications passed smoothly through Congress that the Pacto por México began to be taken seriously – indeed there were always those who kept predicted its failure.

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Mexico’s new president, Enrique Peña Nieto, has enacted far-reaching reforms

The Pact wasn’t problem free. The left-wing Party of the Democratic Revolution (PRD), a signatory to the Pacto por México and one of the three main political forces in Mexico, decided to “leave” it. Nonetheless the positive effects of the Pact are permanent and will have a direct effect on the Mexican population and an indirect impact on Mexico’s role as a global player. It will change the landscape of Mexico and constitutes the basis for a new and modern framework for sustained development of a country, which still hasn’t achieved its full potential.

Irrespective of whether or not the PRD will reintegrate itself to the pact process, we must fully understand that the framework has changed. The Mexican market has been true to its principles and continued to open up to private investors. As is the case with any change, there are challenges but most of all, opportunities.

So far, the Pacto for México has delivered a major education overhaul; a new legal framework of the amparo proceeding; openness and expanded oversight in the telecommunications market; new and expanded authority to the antitrust authorities; reforms to increase tax revenues; a new and modern framework to the financial sector; a new framework of the federal electorate body; political reforms, that although with limitations, reinstate re-elections for lawmakers and mayors of municipalities, and last but not least, the end to Mexico’s 75-year-old oil and gas monopoly.

As is the case with any change, there are challenges but most of all, opportunities….

Not bad taking into account that some of these reforms required a majority vote from two-thirds of Congress and had to be ratified by the majority of the State legislatures.There is still much work to be done, but let’s all be clear that the success of these reforms will depend on private investment following the legislators and making the most out of the opportunities offered by Mexico.

The year ahead will challenge all of us within the legal sector to get up to speed on the changing environment. Those that stagnate and ignore the trends will be left behind. The Pacto for México has given us more than enough for a new and promising beginning. It is up to us to create trends and make things happen.

It is the time for Mexico. It is our time