WEEKLY REPORT 31.5.24

May 25–31, 2024

Conflict: Supreme Court and the Senate HOT TOPICS:

The Supreme Court of Justice has found the Senate in judicial contempt due to its failure to appoint commissioners to the National Institute of Transparency, Access to Information, and Protection of Personal Data (INAI)

This decision follows a ruling made on October 2, 2023, where the Court concluded that the Senate's failure to appoint commissioners constituted an administrative omission and a violation of the Federal Constitution The Court ordered the Senate to fill the vacancies before the end of the current session, but as of May 21, 2024, no appointments have been made Minister Norma Piña issued a warning regarding the expired deadline, prompting an official notification from the Supreme Court to the Senate The Senate now has 10 business days to respond regarding the submission and approval of candidates for the vacancies in the INAI

Source: Animal Político

OPPOSITION:

NEW PENSION FUND IS UNCONSTITUTIONAL

On May 28, legislators from PAN, PRI, and PRD filed an action of unconstitutionality with the Supreme Court against the reform which establishes the Pension Fund for Well-being, proposed by Morena Parliamentary coordinators Jorge Romero (PAN), Rubén Moreira (PRI), and Francisco Javier Huacus (PRD) expressed hope for a swift procedure Moreira criticized the alleged plundering of Afores, linking it to Mexico's financial troubles, citing a MXN 2 trillion deficit this year and another trillion pesos needed next year if current conditions persist Deputy Jorge Romero Herrera emphasized that the action is based on constitutional and human rights provisions protecting property rights and due process, highlighting that individuals were not notified about the withdrawal of their money

Source: El Financiero

TRUMP IS DECLARED GUILTY

A Manhattan jury found Donald Trump guilty on all 34 charges of falsifying business records, making him the first former president in American history to be convicted of a felony This historic verdict also makes Trump the first major-party presidential nominee to be convicted of a crime during a campaign If he defeats President Joe Biden in November, he will become the first sitting president to be a convicted felon

U.S. ACCUSES VW OF VIOLATING LABOR RIGHTS IN PUEBLA

The U S Department of Labor and the U S Trade Representative have requested that Mexico investigate Volkswagen’s Puebla plant, the country's largest automobile facility, over alleged labor rights violations

This follows an April 25, 2024, petition by 10 dismissed workers claiming that Volkswagen violated their rights to freedom of association and collective bargaining

The petition, under the USMCA Rapid Response Labor Mechanism, highlights the unjustified dismissal of these workers, who were members of the outgoing executive committee of the Independent Union of Automotive Industry Workers The Mexican government has 10 days to decide on a review and 45 days to investigate and report on the claims The Puebla plant employs around 6,100 assembly workers, 5,000 supervisory staff, and thousands of parts assembly workers, producing 2,300 vehicles daily In 2023, Volkswagen México exported over 300,000 vehicles, with 67% destined for the U S market

Source: El Economista

REDUCTION OF GDP EXPECTATION

In the second quarter in a row, Banxico lowered its economic growth expectations for Mexico this year while maintaining forecasts for 2025 and dismissing recession concerns Economic weakness persisting from late 2023 led to a GDP growth estimate reduction for 2024 from 2 8% to 2 4% Banxico's Quarterly Report for January-March 2024 adjusted the GDP growth range for the year from 1 9%-2 9% to 2 2%3 4% due to prolonged economic weakness

Governor Victoria Rodríguez highlighted a slowdown in construction, manufacturing weakness linked to low U S activity, and service sector performance heterogeneity Despite this, optimism exists for a resurgence in economic activity by the end of 2024, with the expectation of increased public spending boosting domestic consumption and investment

Source: El Financiero

Source: CNN

HOT TOPICS:

Last Week Before Elections

El Financiero: Vote Intention in the Presidential Election

Claudia Sheinbaum (Morena-PT-PVEM)

Xóchitl Gálvez (PAN-PRI-PRD)

Jorge Álvarez Máynez (Movimiento Ciudadano)

As the campaign period comes to an end, most surveys point to one outcome: Claudia Sheinbaum’s victory However, many of them differ over how much advantage she has over the ”second” place, Xóchitl Gálvez While the most recent poll from Enkoll estimates more than 20 points of advantage in favor of Sheinbaum, El Financiero says Sheinbaum is ahead by 14 points Nevertheless, Sheinbuam’s advantage, either large or small, is undeniable

In the Congress, results are not as favorable for the ruling party Although it is probable that Morena and its allies receive a simple majority in both chambers, they probably won’t get enough votes to have a qualified majority (2/3 of the chamber), which is needed to pass constitutional reforms This makes it harder for Sheinbaum, as her plan is to push for all the constitutional reforms proposed by AMLO

Source: El Financiero, El País, and Bloomberg

CAMPAIGN CLOSURES

After three months of touring the country and participating in debates, Xóchitl Gálvez, Jorge Álvarez Máynez, and Claudia Sheinbaum held their campaign closings on May 29 in different locations Claudia Sheinbaum of Morena held her closing event at the Zócalo in Mexico City, alongside Clara Brugada and other party candidates She emphasized Mexico's profound changes, and outlined 20 principles for her presidency, including a judicial reform She concluded by committing to uphold President López Obrador's legacy Xóchitl Gálvez, from the PAN-PRI-PRD alliance, closed her campaign at Arena Monterrey in Nuevo León She criticized Nuevo León’s governor, Samuel García, and promised to open the National Palace to everyone Jorge Álvarez Máynez of Movimiento Ciudadano (MC) held his event in Mexico City, focusing on the youth He thanked young people for their engagement and emphasized not criminalizing youth for marijuana use or women for reproductive choices

VIOLENCE IN ELECTIONS

José Alfredo Cabrera (PRI-PAN-PRD), the candidate for the Mayorship of Coyuca de Benítez, Guerrero, was assassinated during his campaign closing The Guerrero State Attorney General's Office confirmed they have launched an investigation into Cabrera's homicide and stated that the murderer was killed at the scene According to Integralia, the electoral process comes to an end with twice as many cases of violence compared to the 2018 elections

Additionally, the National Electoral Institute (INE) announced it will not set up 104 polling stations in Michoacán, Oaxaca, Nuevo León, Colima, and Mexico City due to security issues and political conflicts among indigenous communities This will affect over 60,645 people, mainly in Michoacán, who will need to vote at special polling stations on June 2 Additionally, 820 more polling stations are at risk of not being installed for similar reasons

Source: CNN, El Economista, and El Universal

ELECTION TENDENCIES: KEY STATES AND MUNICIPALITIES

State Tendency

Source: Animal Político State Municipality Tendency

Jalisco

Guanajuato

CDMX

Puebla

Veracruz

Although some polls favor Pablo Lemus (MC), current trends show a close election between Lemus and Claudia Delgadillo (Morena-PT-PVEM).

Current trends favor Libia García Muñoz Ledo (PRIPAN - PRD)

Current trends show a close election between Clara Brugada (Morena-PT-PVEM) and Santiago Taboada (PAN-PRI-PRD).

Current trends favor Alejandro Armenta (MorenaPT - PVEM)

Although some polls favor Rocío Nahle (Morena), current trends show a close election between Nahle and José Yunes (PRI-PAN-PRD).

Baja California

Ciudad Juárez

Tijuana

Mexicali

Jalisco Guadalajara

Nuevo León Monterrey

Tamaulipas

Nuevo Laredo

Trends favor Cruz Pérez Cuéllar (Morena - PT ).

Current trends favor Ismael Burgeño (Morena ).

Current trends favor Norma Bustamante (Morena ).

Close election between José María Martínez (Morena), and Verónica Delgadillo (MC).

Trends indicate a close race between Mariana Rodríguez (MC) and Adrian de la Garza (PRI-PAN-PRD).

Trends favor Carmen Lilia Canturosas (Morena ).

Chihuhua

Legislative and Regulatory issues: HOT TOPICS:

SAN LUIS POTOSÍ

CITIZEN INITIATIVE TO AMEND VARIOUS PROVISIONS OF THE STATE TREASURY LAW REGARDING ECOLOGICAL TAXES

Presented by : State Congress of San Luis Potosí

Purpose :

• The tax should be equitable and proportional, considering both companies already taking environmental actions and those that are not

• Eliminate indirect emissions

• Provide different treatment for less polluting fuels

• Reduce the current rate of 3 UMAs

• Raise the application threshold of the tax to 25,000 tons of emissions

• Consider fiscal incentives, such as emission compensation through remediation or conservation projects, as well as emission reduction certificates

• Take into account circular economy actions that companies are implementing to reduce the carbon footprint of their products

• Exclude companies already taxed at the federal level for the same concept from this tax

Status : 2024-05-29 - Initiative referred to the State Treasury Commission for opinion

MEXICO CITY

INITIATIVE TO AMEND AND ADD VARIOUS ARTICLES TO THE FISCAL CODE OF MEXICO CITY (REGARDING THE PROMOTION OF EMPLOYMENT FOR PEOPLE WITH DISABILITIES)

Presented by : Local Deputy Javier Ramos Franco (CDMX - PVEM)

Purpose:

• When individuals and legal entities in CDMX hire people with disabilities, a tax credit reduction of up to 100 percent will always apply

• Individuals and legal entities that use such properties as spaces where people with disabilities work are exempt from the total payment of property tax

• Payroll tax will not be charged on expenses incurred for hiring people with any form of disability

• Individuals and legal entities that use such properties as spaces where people with disabilities work are exempt from the total payment of the Lottery, Raffle, Draw, and Contest Tax

• Individuals and legal entities that permanently employ people with disabilities are exempt from the total payment of the Public Shows Tax

Status : 2024-05-28 - Initiative referred to the Treasury Commission for opinion