Plan México: Legal Risks (and Opportunities) of Mexico’s Public Sector-Led Industrial Strategy

By Rachel Thrasher

Note: This research follows previous GDP Center work on the USMCA review as a strategic opportunity for Mexico to increase Mexican labor incomes in alignment with the broad goals of Plan México. For more on this analysis, read the recent working paper by Sandra Polaski: “USMCA and the Need for a ‘Second Story’ of Mexican Wages and Household Incomes.”

July 1, 2026 marks the sixth anniversary of the United States-Mexico-Canada Agreement (USMCA) taking effect. After six years, trade ministers from all three countries are scheduled to conduct a joint review of the agreement and determine if the trade pact is still beneficial for all concerned.

At the same time, Mexican President Claudia Sheinbaum is helming an economy-wide “strategy for economic and sustainable development for a shared prosperity” known as Plan México. Launched in January 2025, Plan México aims to significantly scale up public works invest­ment in energy, water, transportation, professional and technical education and housing. It also seeks to attract new investment and scale up national production in strategic industries, increas­ing national content in production along supply chains and supporting micro, small and medium enterprises (MSMEs).

Two main policy drivers dominate the strategy: public procurement and state-owned enterprises. The Plan involves heavy and strategically targeted procurement of public works projects, electricity and special economic zones. Often procurement contracts require a certain amount of local content to ensure that such big government expenditures support developing backward and forward linkages in the Mexican economy and securing more jobs for Mexican workers. The Plan also assumes heavy reliance on state-owned enterprises in both the energy and financial services sectors. Firms like Petróleos Mexicanos (PEMEX) and the Comisión Federal de Electricidad (CFE) are at the center of a plan to increase energy sovereignty. National development banks like the Banco Nacional de Obras y Servicios Públicos (BANOBRAS) and the Nacional Financiera (NAFIN) are tasked with providing affordable financing for Mexican firms, especially those with government contracts for public works projects.

Like many countries in the Global South, however, trade and investment commitments can pose obstacles to Mexico’s industrial development policies. A new working paper from the Boston University Global Development Center explores the extent to which Mexico’s trade commitments, especially within the existing USMCA text, encourage or constrain the policies in Plan México as well as additional policies that will be needed to truly reach the goals of equitable and sustainable economic development. The analysis finds that, on the one hand, Mexico has already carved out key public procurement measures and activity by national development banks in the existing USMCA. Moreover, many of the current policies identified under Plan México are permissible under the USMCA and Mexico’s other trade and investment commitments. On the other hand, however, there are key areas of vulnerability in Mexico’s energy sector, and many policies necessary to reach Mexico’s overarching development goals and specific targets are likely to face challenges under its treaty commitments.

As Mexico enters this review of the USMCA, it faces a very challenging and unpredictable nego­tiating context. President Sheinbaum has laid out a comprehensive productive development plan which could, if implemented carefully, increase consumer welfare and productiv­ity across many sectors of the economy. At the same time, the USMCA represents an agreement from which Mexico cannot simply walk away. To ensure the agreement preserves the policy space to fulfill the goals of Plan México, the country must preserve existing carve-outs and exceptions for procurement and national development banks, as well as push towards eliminating investor-state disputes, especially for investors in the electricity sector.

Mexico’s industrial policy is well-designed to make noticeable changes for Mexican citizens in terms of their consumption, health and general welfare. Preserving and expanding the policy space in the USMCA for additional policy action will allow Mexico to make the development jump that it wants, while also restructuring the economy toward low-carbon industry and renewable energies.