Mexico

Our fortnightly Mexico Politics & Security publication is written by our in-country expert, and reviewed and edited by our in-house team. Each issue analyses key developments and trends of relevance to business, helping you to plan for the months ahead. To recieve your free sample copy just click the button below:

The Forecast, 2018

Below is a summary of The Forecast: Mexico 2018 — you can download the full pdf version for free here:

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Domestic politics

Andrés Manuel López Obrador (a.k.a. AMLO) (b.1953) is expected to win the presidential election on 1 July 2018 but there is still considerable political maneuvering that needs to unfold for this assumption to play out.

AMLO — who has promised to maintain the autonomy of the Central Bank if he wins —is likely to win his third attempt at the Presidency. There will be a major media campaign against him before the election but — despite having started his political career in the Partido Revolucionario Institucional (PRI) in the 1970s — his current quasi outsider and anti-establishment persona will remain his main advantage in the eyes of the Mexican public. There is also a perception that nothing changed under the Partido Acción Nacional (PAN) in spite of it winning the historical 2000 elections from the PRI and this will help AMLO.

Security

There were a record number of recorded murders in 2017 and it is unlikely that 2018 will see a significant decline. The majority are centred around control of drug and trafficking cartels — which almost always happens when a cartel leader is killed or captured — or in turf wars between different cartels for control of specific states or trafficking routes. Besides drugs, fuel theft is the most large scale and lucrative of the cartels’ activities and it shows no sign of declining. Indeed, it can be expected that violence will increase in the main oil producing states and in areas adjacent to major oil pipelines.

International Affairs and Macro-economy

2018 will be dominated by the Trump Administration’s determination to force Mexico to significantly modify the vitally important North America Free Trade Agreement (NAFTA) or risk it being unilaterally scrapped. NAFTA will not be ended but Mexico will almost certainly have to make numerous concessions to the US demands. These will include local content regulations applied to the Mexican automotive industry, which has experienced dramatic growth in recent years.

Energy

At least four new bidding rounds could take place before the current administration of President Enrique Peña Nieto finishes at the end of 2018. The first of the four, Round 2.4, will offer 30 offshore contractual areas: nine in the Perdido region; ten in Cordilleras Mexicanas; ten in Cuencas Salinas; and one in the Yucatan Platform.

The CNH regulator has not yet announced the tender date for Round 2.5 but the Energy Ministry has officially stated that unconventional and shale areas will be up for grabs in early 2018. The main goal is to leverage the country’s shale assets to reverse a steep decline in domestic gas production in light of ever-growing imports from the US.

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