All eyes were on Mexico’s Senate as it voted early on Wednesday on an eighteen-point judicial reform package, which passed 86-41. While the last major legislative hurdle has been cleared, the constitutional changes that come next will likely be front and center for US legislators, who will soon begin their review of the United States-Mexico-Canada Agreement (USMCA) ahead of the trade deal’s six-year mark on July 1, 2026.
The Senate vote came after the judicial reforms were given the green light by the Chamber of Deputies of Mexico’s newly inaugurated Congress in the wee hours of September 4 in a tally of 359-135. Protesters blocking access to the Chamber ahead of the vote forced deputies to instead convene at a local sports complex; the Senate vote also required proceedings to move locations due to protests. While the package has now cleared both houses of the legislature, the question of what comes next for the USMCA and for businesses and investors remains up in the air.
Mexican officials have been clear that the judicial reforms are an internal matter, including in response to an August 26 Washington Post editorial. But US senators on both sides of the aisle—who will likely influence the United States’ USMCA review—don’t see it that way. On August 27, four US senators noted that the legislation “may contradict commitments” made by Mexico in the USMCA. Meanwhile, House Foreign Affairs Committee Chairman Michael McCaul has said that the reforms “could put our two countries on a negative trajectory as we head into renegotiating USMCA in 2026.”
A potential new challenge to the underpinnings of the USMCA could represent a critical test for the future of North American economic integration and competitiveness, and it comes just as China looks to further assert its own commercial influence both regionally and globally.
For businesses operating under the USMCA framework, legal clarity is not just a principle but a practical necessity. It ensures that laws are applied without favor, contracts are honored, and disputes are resolved fairly. The judicial reforms, by introducing the popular election of more than 1,600 judges and magistrates, have concerned investors, who depend on relative consistency in rulings and question if that will continue once judges are ultimately decided by the people. After all, investors rely on a stable, certain, and predictable legal environment to make long-term investments.
Additionally, the reforms are expected to result in changes to regulatory agencies such as the Mexican Federal Economic Competition Commission, the Federal Telecommunications Institute, and the National Hydrocarbons Commission. All of these are critical to upholding labor, environmental, and trade standards enshrined in the USMCA. Stripping away or diminishing the power of these agencies could lead to questions of noncompliance from the United States and Canada, sparking trade disputes and bringing into question the provisions that permit the USMCA to function effectively.
At the same time, North America faces increasing economic competition from China, which is working to position itself as a viable alternative and partner for trade and investment. If North American commercial ties appear on the defensive, or worse, then the deepened economic integration of the three countries—increasingly essential to compete globally—could face new roadblocks that may ultimately impair their collective competitive edge.
With the sunset clause approaching, the USCMA will soon be under increased scrutiny, and it is clear that Mexico’s judicial reforms will have implications far beyond domestic politics. The reforms, for example, may be welcomed by those hoping to use the trade agreement’s review period to significantly alter the accord—a move that may prove difficult, perhaps even impossible, to reconcile among the three countries. Now, continued diplomatic efforts should be expected that reinforce the importance of maintaining strong regulatory agencies and judicial independence as part of the three countries’ shared USMCA commitments.
The USMCA is a linchpin for the vibrant and effective regional cooperation upon which thousands of jobs depend. The alternative—a fragmented and less competitive North America—would harm all three countries. It is thus imperative for North American leaders to find common ground and work together to safeguard the economic future of the continent. Our collective future depends on it.
Jason Marczak is the vice president and senior director of the Adrienne Arsht Latin America Center.
María Fernanda Bozmoski is deputy director, operations and finance at the Atlantic Council’s Adrienne Arsht Latin America Center, where she leads the center’s work on Mexico and Central America.
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Image: A general view shows Mexico's Senate on the day of a debate about a highly contested proposal on a judicial reform, after it was approved by the Chamber of Deputies and senators have backed it at the commission stage, in Mexico City, Mexico September 10, 2024 REUTERS/Luis Cortes