Mexico’s lower house of Congress approved on Wednesday a measure to abolish most of the autonomous bodies that regulate some economic sectors and ensure government transparency, a reform that could worsen tension with the U.S. and hit credit ratings.
The measure is among the constitutional reforms presented in February by former President Andres Manuel Lopez Obrador and backed by current President Claudia Sheinbaum, aimed at cutting public spending by centralizing the state apparatus.
Lawmakers in the Chamber of Deputies voted 347 in favor with 128 against, and no abstentions, after hours of occasionally heated debate, with some jeers and personal insults exchanged.
A final vote on objections to details of the measure is expected on Thursday before it moves to the Senate, where ruling party Morena holds a large majority.
The reform proposes scrapping autonomous agencies such as antitrust watchdog Cofece, telecoms regulator IFT, energy regulator CRE, hydrocarbon regulator CNH, and public information and data protection office INAI.
Their functions would be taken over by other government bodies, including the official statistics office, the electoral authority, and government ministries.
Analysts warn the reform could potentially lead to conflicts with the United States and Canada, as the United States-Mexico-Canada Agreement (USMCA) mandates a telecoms regulator, particularly as the pact is due for review in mid-2026.
Sheinbaum has said the “technical independence” of the autonomous bodies would be maintained and special provisions would ensure compliance with USMCA requirements.
While advocates said more streamlined governance would save some $5 billion annually and reduce graft, critics argued it would strip funding from important projects, reduce transparency and oversight, and concentrate power with the executive.
Some analysts have also warned the measure could trigger potential credit rating downgrades for Mexico, which now has investment-grade ratings from Fitch, Moody’s, and S&P.
The reform “implies a further deterioration of Mexico’s institutional framework, which increases the likelihood of credit rating downgrades,” said Gabriela Siller, director of economic analysis at Grupo Financiero BASE.
Ratings agency Moody’s recently downgraded Mexico’s outlook to negative from stable, citing institutional and policy weakening that threatens the economy and government accounts after a contentious judicial overhaul.
What are the consequences of the disappearance of the INAI and other autonomous organizations?
Without the National Institute for Transparency, Access to Information, and Protection of Personal Data (Instituto Nacional de Transparencia, Acceso a la Información y Protección de Datos Personales INAI), the capacity for accountability and legal certainty in the country is significantly affected.
Without the National Council for the Evaluation of Social Development Policy (Consejo Nacional de Evaluación de la Política de Desarrollo Social: Coneval), the door is opened to a less rigorous evaluation of social policy, with negative implications for budgetary decisions and the quality of social programs.
Without the Federal Economic Competition Commission (Comisión Federal de Competencia Económica; Cofece), the guarantee of free competition in the markets is put at risk, affecting diversity, quality, and prices of goods and services.
Without the Federal Telecommunications Institute (Instituto Federal de Telecomunicaciones; IFT), there would be discretionary regulation in access to the radio spectrum, communication networks, and satellite communication, to the detriment of competition and quality.
Without the National System for Continuous Improvement of Education (Sistema Nacional de Mejora Continua de la Educación), the evaluation of educational policy and actions to improve the skills of students and workers is limited.
Without the National Hydrocarbons Commission (Comisión Nacional de Hidrocarburos; CNH), a technical body, independent of Petróleos Mexicanos (Pemex) and the private sector, in charge of managing oil assignments and contracts, is lost.
Finally, without the Energy Regulatory Commission (Comisión Reguladora de Energía: CRE), there is no guarantee of a level playing field in the regulation of electricity, natural gas, and oil products.
Sources: Reuters / El Financiero
