Garza: “Democracy” 2024: Stakes high, conflict abounds.

Only a few days into September and somehow Labor Day already feels like a distant memory.

Globally, major geopolitical tensions persist. In the Middle East, we are now 10-months into the Israel-Palestine conflict. On September 1, tens of thousands of Israelis took to the streets protesting the Israeli government’s failure to secure the release of six hostages whose remains were recovered earlier that day. The United States continues to lead efforts to negotiate a ceasefire agreement.

The Ukraine-Russia conflict proceeds unabated, though last week Ukrainian president Zelensky announced that he will present a peace plan later this month at the United Nations General Assembly. This week, president Putin, for his part, also suggested an openness to peace talks, likely in response to Ukraine’s recent incursion into the Russia’s Kursk region.

Meanwhile, tensions with China seem to be set at simmer now following U.S. national security advisor Jake Sullivan’s visit to Beijing on August 29. In a less than frosty visit, both Chinese president Xi and Sullivan vowed to “maintain the stability of China-U.S. relations”.

In our own hemisphere, unrest continues in Venezuela following the country’s July 28 elections where Nicolas Maduro was declared the winner despite widespread alleged voter fraud. On September 2, the Maduro regime issued an arrest warrant for opposition leader Edmundo Gonzalez signaling that the political crisis is far from over.

In my last newsletter, I suggested that Mexico’s Morena party’s June electoral sweep would open the door for president Lopez Obrador to consolidate that party’s power when newly elected legislators were sworn in on September 1. In recent weeks, president Lopez Obrador has begun wielding his superpowers for judicial reforms which, if approved, would make all judges stand for election.

UN officials and international businesses, and an estimated 55,000 judicial workers have voiced concerns about the reform’s potential to limit the neutrality of Mexico’s judiciary. The American and Canadian ambassadors to Mexico declared their own concerns, leading president Lopez Obrador to announce on August 27 that he was pausing diplomatic relations with both embassies. Despite this pushback, Mexico’s Chamber of Deputies passed the bill on September 4, with the Senate expected to pass the bill in the coming days and further ratification to follow.

In addition to judicial reform, president Lopez Obrador is also proposing to nationalize Mexico’s National Energy Commission and to reassert executive control over Mexico’s National Electoral Institute, among others. You can find a full White & Case breakdown of the proposed reforms in our February 2024 brief. While the legislative reforms are currently generating the most attention in Mexico, Sheinbaum will also be inheriting a widening fiscal debt and major energy challenges as well.

The president-elect has been methodically announcing her cabinet picks. Former Foreign Affairs Secretary and presidential candidate, Marcelo Ebrard, will lead Mexico’s Economy Secretariat. Juan Ramon De la Fuente – Mexico’s former ambassador to the UN – will serve as Foreign Affairs Secretary. The physicist Victor Rodriguez has been tapped as the incoming PEMEX executive. Sheinbaum’s cabinet, led primarily by academics and public servants, has been generally well received by the Mexican business community.

Prior to Lopez Obrador’s reform push, the Mexican economy was already slowing down. In July, inflation reached 5.6 percent, the highest in over a year. Mexico’s central bank cut 2024 GDP forecasts to only 1.5 percent with an estimated 1.2 percent growth for 2025. Given concerns over Morena’s September political agenda and consolidation of power, on August 21, Morgan Stanley downgraded Mexico’s investment outlook.

In August, U.S. Customs and Border Protection reported roughly 58,000 migrant encounters, down almost 80 percent from almost 250,000 in December 2023. This decline comes after president Biden’s June 2024 presidential proclamation which temporarily prevents migrants from seeking asylum when the number of crossing surge, though, the Biden administration is reportedly considering more permanent asylum restrictions in the coming weeks.

Meanwhile, another of president Biden’s immigration proposals, which would provide a path to citizenship for up to 500,000 immigrants married to Americans was temporarily stayed by a judge on August 26, a week after the program began accepting applications.

On July 25, in an incident likely worthy of a Netflix deal, Sinaloa Cartel leader Ismael Zambada Garcia was arrested by U.S. authorities after his plane was rerouted to land in El Paso, Texas. In August, Mexico’s Attorney’s General office announced an investigation into the operation with allegations that Zambada Garcia was not legally detained by U.S. authorities but rather kidnapped from Mexican territory.

The results of the U.S. elections will also undoubtedly impact the North American relationship over the coming months. Vice president Harris is now ahead in 3 of the 7 battleground states, although these polls are well within the margin of error and we are months from election day. On September 10, vice president Harris and former president Trump will participate in their first presidential debate.

As you can well imagine here at White & Case in Mexico City, we will be monitoring these events closely on behalf of our clients and friends. Lastly, congratulations to my colleagues here at White & Case for once again receiving top ranks in Chambers’ guides of top law firms in Latin America.

Hope you are well, and am looking forward to staying in touch. You can reach me via X and LinkedIn.

Sincerely, 

Antonio Garza

Editor’s Note: The above guest column was penned by former U.S. ambassador to Mexico Antonio Garza. It first appeared on Ambassador Garza’s e-newsletter. The column appears in the Rio Grande Guardian International News Service with the permission of the author. Ambassador Garza can be reached by email via: marla@m2strats.com.

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