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Mexican leader fails to approve limits on foreign energy firms | business news

MEXICO CITY (AP) — Mexican President Andrés Manuel López Obrador failed to find enough votes Sunday night to pass a constitutional reform that limits private and foreign companies in the electric power industry, marking the first major legislative setback for the president.

The defeat may set the tone for an angry, hard-line and polarizing president in the last two and a half years of his administration.

No longer able to count on a legislative supermajority as he did in the first half of his term, López Obrador can now resort to harsher attacks against opponents and regulatory bodies, such as the courts and electoral authorities.

The reforms that did not pass Sunday would have undone much of the market opening in power generation carried out by his predecessor in 2013, but they also raised concerns among US officials and companies, who worried they would violate the pacts. trade and guarantees for foreign investors.

On Monday, López Obrador called opposition congressmen who voted against the reform traitors, alleging that foreign firms “bought the legislators.”

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The lower house of Congress voted 275-223 in favor of the measure, which would have given more power to the state power company, but fell far short of the 333 votes needed for constitutional changes.

Ana Vanessa Cárdenas Zanatta, a political science professor at the Tecnológica de Monterrey and Anáhuac universities, said the vote marked the first legislative setback López Obrador has suffered since he took office in late 2018.

“Today he couldn’t hide the fact that he was very angry,” Cárdenas Zanatta said, noting that he had continued to push the project despite warnings from the US government.

“Yesterday a group of legislators committed an act of treason against the country,” López Obrador said Monday. “Instead of defending the interests of the nation, of the people, they openly defended foreign companies that steal and deprecate.”

Alejandro Moreno, leader of the former ruling Institutional Revolutionary Party, replied “they are the traitors, and they have not solved the crime problem and have left women abandoned,” referring to the increase in homicides against women in Mexico.

Political analyst José Antonio Crespo said that López Obrador was a victim of his own refusal to negotiate any of his proposals, preferring instead to divide the country into camps of “traitors” and patriots.

“For him, sitting down to negotiate with the opposition is betraying the cause, because he is used to doing things as he says they should be done or not done,” said Crespo. “I think this is going to hurt him in the second half of his term, because he no longer has the majority to carry out his orders.”

“I think the final half of this administration is going to be very tough, very tense, forced, very risky,” Crespo said.

López Obrador promised to separately present a bill that would nationalize lithium mining, which was part of the reform project that failed on Sunday.

The bill presented for debate on Monday would create a state company for lithium mining, something that López Obrador said would “nationalize lithium.”

Only one lithium mine in Mexico, operated by a Chinese company, is close to starting production. Presumably, that would be taken over by the government if the bill passes by a simple majority.

The electricity reform sought to limit renewable power plants built abroad and ensure that at least 54% of electricity would be purchased from government-owned generating plants, which are dirtier. Private and foreign companies, which have built wind and gas power plants, would have been allowed to hold up to 46% of the market.

Critics said the reform would hurt investors and their confidence in Mexico. The companies could have sought court injunctions, and the US government could have complained under a free trade agreement and then impose countervailing duties on Mexican products.

Pro-government lawmakers have already passed a law giving the state utility more discretion in deciding who to buy power from, but it remains stalled by court challenges.

Sunday’s debate began with almost all 500 deputies present. The ruling party and its allies needed a two-thirds majority to pass the constitutional reform.

Some pro-government legislators chanted ‘Traitors’ to the opposition, which objects to the reform. Opposition lawmakers shouted: “That will not happen.”

Given the atmosphere, López Obrador’s Morena party failed to win over a significant number of opposition lawmakers. The vote seemed to promise two and a half more years of polarization in Mexico.

“Now families and couples are divided, I have friends that I no longer see, good friends, because we are going to end up fighting,” said Crespo. “I have never seen this level of polarization, especially one that is promoted from above.”

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