Mexico’s Judicial Reform Raises Economic Concerns for Aerospace

The approval of Mexico's Judicial Reform has raised concerns about its potential economic impact, particularly on the aerospace industry. Luis Lizcano, Executive President, Mexican Federation of the Aerospace Industry (FEMIA), warned that the reform could create long-term legal uncertainty that might affect business operations. 

"When a company looks to invest in a country, it conducts risk studies, reviews data, and collects information to make an informed decision. If the legal system is compromised, it will impact the industry. This reform could undermine the trust that companies have in the justice system, which is crucial for economic growth and development," Lizcano stated in an interview with A21.

Mexico's aerospace sector, which heavily relies on exports to the United States, may face challenges if legal uncertainties disrupt trade between the two countries. Lizcano highlighted Mexico's strong commercial ties with the United States, noting that any instability in the legal framework could hinder this relationship.

"We do not expect foreign or Mexican companies to stop exporting or operating overnight. Growth may slow, but this would occur over the long term. It is not something that will happen suddenly." Lizcano stated.

The aerospace sector’s extended production cycles, with some products having a lifespan of up to 50 years, mean that decisions are made with a long-term perspective. Lizcano pointed out that government policies have a significant impact on the industry’s planning process.

"It is important to work closely with presidential administrations. The government has a lot of influence over industrial planning," he said. FEMIA intends to cooperate with the incoming administration of Claudia Sheinbaum, who will take office on Oct. 1, 2024.

 "We cannot say whether her administration will be good or bad for the industry, but we will work with the government to push the aerospace sector, which has great potential," Lizcano added.

The reform, approved on Sep. 4, 2024, by Mexico’s Chamber of Deputies, introduces significant changes to the country's judiciary. These changes include reducing the number of Supreme Court justices from 11 to nine and shortening their terms from 15 to 12 years. Additionally, it mandates that judicial officials, including Supreme Court justices, be elected by popular vote, a first in Mexico's history.