Mexico’s Midterm, Washington’s Gridlock

  • Date : 12/03/2014

Just over a week ago, Mexican voters headed to the polls to cast their votes for federal, state, and municipal officials in the country’s midterm election.

With roughly 48 percent of the eligible population making it to the polls, it was a higher than expected showing for an electorate weary of the traditional parties. In the short term, the results signal a continuation of the status quo. But take a longer view and they also reveal dramatic shifts in Mexico’s political landscape.

Most notably, the election ushered in a wave of new faces. For the first time in eighty years, voters in Nuevo Leon elected an independent candidate, Jaime “El Bronco” Rodríguez Calderón, as their state governor. Similarly, the MORENA party, a PRD spin-off led by Andrés Manuel López Obrador, grabbed five out of the possible sixteen delegations across Mexico City. And in Jalisco, a candidate from the small Ciudadano Movimiento party snagged Guadalajara’s mayorship.

Meanwhile, President Peña Nieto’s PRI didn’t fare as well as they might have hoped. The party won five of nine state governorships and lost an absolute number of seats in the Lower House. They did, however, maintain a majority, especially when combined with seats won by the allied Green Party (Verde) and New Alliance (NA). And in good news for the reform agenda, the voter rebuke stemmed more from recent scandals than from a rejection of the earlier legislative overhaul.

But the PRI shouldn’t view their electoral survival as a mandate to continue business as usual. Mexicans are still extremely frustrated by their government’s inability or unwillingness to tackle corruption and rule of law issues, with the lack of progress exacting high costs on citizen security and the economy. These challenges are not unique to Mexico, with Guatemalans and Hondurans also increasingly demanding greater accountability from their leaders. Yet as Mexicans push their government to prioritize the rule of law, the PRI would be wise to listen.

In other news, Mexico’s reform implementation is largely continuing apace. On July 15, the government will open the bids and announce the winners for the energy reform’s shallow water exploration blocks (part of Round 1). In the lead up, over forty companies sought access to the government’s geological data rooms and nineteen companies and seven consortia were eventually pre-approved, including oil and gas heavyweights Exxon Mobil, Chevron, BP, and Statoil. Pemex too had some recent good news, announcing the discovery of five oil rich fields off the coast of Campeche and Tabasco that could hold an impressive 350 million barrels of crude.

And, in the United States, the big news story is last week’s setback on the Trans Pacific Partnership (TPP), the mega trade deal spanning North America and nine other countries across Latin America and Asia. The U.S. Congress passed a Trade Promotion Authority (TPA) bill, which would have fast-tracked the agreement. But the corresponding Trade Adjustment Assistance (TAA), which guarantees benefits to workers who would be negatively affected by the agreement, failed to clear the hurdles necessary to allow the package to advance. While there still may be several paths forward, none look particularly easy.

And lastly, President Obama recently announced his nomination of Roberta Jacobson as the next U.S. Ambassador to Mexico. I’ve known Roberta for many years, and it would be hard to imagine someone more capable, committed, or qualified for the position. I know I relied on her sharp insights during my time as Ambassador, and I’m sure that Roberta will hit the ground running to strengthen one of the United States’ most important bilateral relationships. I’d urge the Senate to take her nomination up quickly and move this outstanding individual to confirmation.

I hope you’ll stay connected and in touch with me on LinkedIn, Facebook and Twitter for more news from Mexico.  And, if I can assist you or your team here at White & Case in Mexico City or through Vianovo Ventures, simply call.

Sincerely,

Antonio Garza

– White & Case is grabbing headlines and praise for its representation of BlackRock and First Reserve in their acquisition of 45 percent equity interest in two natural gas pipelines from Pemex. You can read more about the work in our Mexico City office here. It’s the first major investment in Mexico’s energy sector since landmark reforms were passed. The Wall Street Journal offers up its perspective on the deal here.

— If your summer travels bring you to Mexico, you’ll find ample opportunities to take in the art, culture and history of the country from Acapulco to Zacatecas and all points in between.  Visit Mexico offers up a wide range of resources to plan a memorable trip here.

— Or, if you’re in Texas, consider visits to two new art exhibits at the Meadows Museum at Southern Methodist University and the Blanton Museum at The University of Texas at Austin.

Meadows’ 500 Years of Spanish Art in Texas includes works from Modigliani to Picasso, Goya to El Greco, and runs through Aug. 2.

Down in Austin, the Blanton Museum just opened an extensive Impressionist exhibit that draws on the works of Oller, Cezanne, Homer, Monet, Pissaro and others, running through Sept. 6.


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