Mexico's lower house constitutional affairs commission changed its draft bill on eliminating independent regulators to keep the energy regulatory commission (CRE) independent on technical issues even after the energy ministry absorbs it.
In an earlier draft, respective ministries would take over the functions of previously independent regulators. With the change, CRE will become a "decentralized body," said President Claudia Sheinbaum. It will retain technical independence but will no longer be an autonomous regulator able to set its budget, the president added.
Sheinbaum did not mention hydrocarbons regulator CNH, which could take up a similar position as CRE.
Antitrust watchdog Cofece and telecommunications regulator IFT would become similarly decentralized bodies with technical independence from the economy ministry.
Transparency watchdog Inai will disappear but a new anticorruption ministry will take over its functions. Inai in recent years has forced state-owned oil company Pemex to release more detailed data about harmful emissions and fuel theft, among other issues.
Mexico's independent regulators and watchdogs still formed part of the 2025 budget proposal the government revealed this week.
The actual independence of Mexico's energy regulators has been questioned since the previous government, as the number of permits granted by CRE to private companies has dropped in favor of state-owned companies.
Critics have raised concerns regarding the bill, arguing it will destabilize Mexico's balance of power and undermine investor confidence. The proposal also fueled concerns that this change could weaken Mexico's standing in the 2026 review of the US-Mexico-Canada free trade agreement (USMCA), as the US and Canada may see the exit of independent regulators as a risk to their business interests in Mexico.
Sheinbaum said she met with US president Joe Biden and Canadian president Justin Trudeau during the G20 summit and discussed the importance of the USMCA. She did not mention any concerns the trade partners had regarding the bill.
Morena previously tried to absorb the independent regulators early on during the previous administration. The ruling party saw its efforts strained because it lacked the two-thirds supermajority required to pass constitutional changes. Morena and its allies are now expected to secure the votes swiftly, as they have passed other constitutional reforms in the previous weeks.
