Until we know how its governing body will be designated, its rules of contact and what tools it will have, we will have an idea of whether there is adherence to the treaty.

Uncertainty persists in the areas of competition policy and telecommunications in Mexico after the federal legislative process of the constitutional reform that extinguishes the regulatory bodies of the sector was completed last Thursday.

While the last-minute change in the decree approved by the Senate plenary session to establish that a technical authority will have to replace the now constitutionally autonomous Federal Economic Competition Commission (Cofece) was positive, this is not enough to ensure that Mexico will comply with the Mexico-United States-Canada Agreement (T-MEC), analysts consulted said.

In his opinion, in order to have a clearer idea of whether the treaty will be respected - which is crucial for Mexico to arrive at the agreement review table in 2026 without any pending issues - we will have to wait to see the secondary legislation.

And there seems to be a consensus: the more similar it is to current legislation, the less risk there will be of non-compliance.

"I don't think that the approved ruling will dispel any concerns or uncertainty," said Lucía Ojeda, partner at the law firm SAI, Derecho y Economía, in an interview.

The mere promise of a technically independent body is not enough. It remains to be seen whether secondary legislation will provide mechanisms to ensure that independence is realised and to eliminate as far as possible the risk of politicisation of its decisions.

For the lawyer, a first step is to ensure that the people who will make up the governing body of the authority - assuming that a collegiate body is chosen, because the approved reform does not specify this - have permanent appointments for a relatively long period and that they cannot be removed except for serious reasons.

"This helps the appointed officials to have the freedom to make decisions based on their own technical and non-political criteria. And that is what independence really is," he said.

The Tenth Transitory Article of the reform opinion on organic simplification approved last week establishes that “The authority in matters of free competition and concurrence will have legal personality and its own assets, will be endowed with technical and operational independence in its decisions, organization and operation, and the separation between the authority that investigates and the one that resolves the procedures will be guaranteed.”

This provision was not originally included in the draft reform that was approved last August by the House of Representatives Committees during the last legislative session.

And it was not until it was voted on in the plenary session of that chamber on November 21, when it was included in a reservation presented by the Morena deputy Ricardo Monreal, with the aspiration of making the reform compatible with the T-MEC, which states that partner countries must have specialized authorities to combat monopolistic practices.

"The ruling states that the reform does not violate the USMCA, but those who will have to decide whether it complies or not are the organizations provided for in that mechanism to resolve disputes," says Javier Núñez, managing partner of Ockham Economic Consulting.

From his perspective, in addition to the rules for new executive appointments, the budget of the new authority will also be important, since the effective fulfillment of its functions also depends on it.

"The devil is in the details. And one important detail will be the budget, because they are assigning new functions (to the new authority)," he said.

It should be noted that the new antitrust body will be responsible for supervising competition in the telecommunications and broadcasting sectors and for applying asymmetric regulation of the predominant economic agents in these areas, functions that currently fall to the Federal Telecommunications Institute (IFT), which will also disappear.

UNCERTAINTY IN TELECOM

And the issue of telecommunications is another thorny one. Chapter 18.17 of the USMCA establishes that partner countries must have regulators without any ties to telecommunications operators (as the IFT guarantees today, thanks to its constitutional autonomy).

However, the extinction reform transfers the sectoral regulatory powers of the IFT to the Federal Public Administration, which controls state telecommunications operators, such as Altán Redes.

"There could be a claim from trading partners for conflicts of interest, that part is more worrying than in other sectors," says Miguel Flores Bernés, president of the Competition Commission of the International Chamber of Commerce (ICC).

Like Lucía Ojeda, Flores Bernés also emphasizes the unknowns surrounding the rules of the new authority, especially with regard to the separation of the authority investigating monopolistic practices and the sanctioning authority.

The approved reform bill contemplates this segmentation, but it is not known how it will operate. “The rules of contact are going to be very important. In the current legislation, the separation between the investigating and sanctioning authorities is guaranteed in the sense that they cannot dialogue or exchange information. That part still needs to be developed to make clear how they will operate,” he commented.

Another source of uncertainty is that there is no date for the extinction of either Cofece or IFT. The approved opinion states that this will take place 180 days after the promulgation of the secondary legislation, for which there is no deadline.

“Cofece and IFT could be left in legislative limbo if secondary legislation is not issued. There is a death sentence, but there is no date for its execution,” says Javier Núñez.

On the other hand, the fact that the reform speaks of a new secondary law and not of reforming the current Federal Law on Economic Competition also raises doubts.

“Another thing that is worrying is that they are talking about a new secondary law, not about adapting the one we have, and here it is worrying that there is an opportunity to change substantial things that are international best practices that should not change because of this reform,” concludes Lucía Ojeda.

POINTS OF UNCERTAINTY ABOUT THE NEW COMPETITION AUTHORITY

- Definition of the new governing body. It is not yet known whether it will be collegiate.

- Criteria for selection of officials, duration of appointments and criteria for removal.

- Rules of contact between the investigating and sanctioning authorities and with the regulated agents.

- Continuity of staff from current bodies to avoid losing experience and ensure continuity of ongoing cases.

- Sufficient budget for the new competent body in the face of new powers.

- New economic competition law. There is concern that current good practices and special procedures will be maintained.

- There is no deadline for issuing secondary legislation and, therefore, clearing up any doubts in view of the review of the T-MEC in 2026.

- To date, the legislature has not been open to listening to the concerns of academia, professionals and private enterprise.