they tip a glass. Sometimes they share a pizza. And, increasingly, they reach
In the past eight months,
This week, President Enrique Peña Nieto
delivered a proposal to crack open
The steady stream of deal-making, after
years of partisan gridlock, is causing ordinary Mexicans to take notice and
reviving international confidence in the country's economy even as interest in
other big emerging markets flags. During the past 12 months,
In the coming months, Mr. Peña Nieto and
the three parties plan to tackle a tax reform to boost revenues and reduce heavy
reliance on income from oil exports, and end the constitution's ban on lawmakers
serving consecutive terms. "I spend around 60% of my time with members of
the opposition, discussing bills," says Aurelio Nuño, chief of staff to
Mr. Peña Nieto. "We've all gotten to know each other very well. You come
to see each other as people, not just politicians."
As he talks, the phone rings. It is the
president, asking how the day's meetings with the opposition went. "He
calls after every meeting," Mr. Nuño says.
Behind the change is a wide-ranging
political agreement called the Pacto
por México, or Pact for Mexico. Unveiled with little fanfare the
day after Mr. Peña Nieto took office in December, the deal was signed by the
all three major political parties, the ruling Institutional Revolutionary Party
(PRI), the leftist Party of the Democratic Revolution (
The pact outlines 95 goals ranging from
the tax overhaul to barring junk food in schools. The hope is to get all done
before the politics of midterm elections in 2015 make deal-making more
"What we're seeing so far is a kind
of legislative coalition, something remarkable in
Many investors view the future of
Obstructionist politics were the norm here
over a bitter 15-year stretch beginning in 1997, when the country became a full
democracy and the PRI, which had governed since 1929, lost control of Congress
for the first time. Few major initiatives passed both houses, which were divided
between the three big political parties, none holding a majority.
The bickering got so bad that the losing
candidate in the 2006 presidential election, nationalist leader Andrés Manuel López
Obrador, refused to acknowledge then President Felipe Calderón as president.
Mr. López Obrador led months of street protests and declared himself the
Bickering is bound to resurface. The
pact's most crucial test comes as the parties sit down to discuss opening the
oil industry, whose protected status has long been a point of national pride.
The chances of getting the initiative
approved appear high. The opposition PAN party says it will back the proposal,
giving the ruling PRI the two-thirds majority needed to change the constitution.
The wild card is the leftist
"We're not going to abandon the
negotiating table," said Guadalupe Acosta Naranjo, a high-ranking
While the political stalemate in
For centuries, this land was ruled with an
iron fist—from Aztec emperors to Spanish colonial viceroys to a succession of
powerful presidents. That ended with the rise of democracy in the 1990s. The
president was forced to cede power to institutions like Congress and the courts
that had atrophied under centralized rule.
The result: a power vacuum filled by other
forces, including drug gangs that killed an estimated 70,000 people in the past
seven years and seized control of parts of the country. Some state governors,
left unchecked, ruled their states like feudal lords, building up vast fortunes.
Union leaders became enormously powerful.
Big business operated unfettered.
Government attempts to regulate the country's monopolies and introduce
competition in sectors from telecommunications to beer went nowhere.
"While politicians quarreled during
these last 15 years, the space that the state's democratic authority left empty
was occupied by private interest groups, be they monopolist firms, drug
traffickers or the unions," said Jesús Zambrano, the president of the
While the parties have very different
ideologies, they found common ground. All three parties, for instance, found
that they shared a frustration that Mr. Slim's telephone companies charged
ordinary Mexicans far higher rates than in comparable countries, and got around
regulation by tying up rulings in the country's Byzantine courts. So the
political parties agreed to create a new telecom regulator with powers to break
up monopolies and whose decisions cannot be suspended in court until the appeals
Another factor behind the deal-making was
the departure from the
It all began a year ago, around a month
after the July presidential election, when
"Why not? What do we lose?" Mr.
Peña Nieto responded, according to two people who talked to him on those days.
For the president, the pact could broaden his popularity beyond his 38% vote
share and get
At the same time, the president-elect's
team began holding private meetings with leaders of the PAN, which governed
"We didn't want revenge," said
Gustavo Madero, the president of the PAN. When in power, the PAN felt constantly
thwarted by the PRI.
By mid-September, a group of nine people
from all three parties secretly started working on a draft at the house of Mr.
Murat, the PRI politician.
The group laid some early ground rules.
"First, we agreed negotiations must always remain private. Second, nothing
is agreed until all is agreed. And third, negotiations shouldn't be affected by
current events," said Santiago Creel, a former PAN interior minister who
participated in the talks.
The group of nine politicians would agree
on broad principles, and then a group of only three members—one from each
side—would break off to hammer out the specific language of the pact.
An atmosphere of mistrust at the outset
gave way to familiarity and even friendship. Some nights ended with leaders
sharing improvised dinners of tacos or pizza.
"The key was to give the benefit of
doubt to the adversary," said Mr. Ortega. "Not to be dogmatic and
avoid as much as possible an ideological approach."
By late November, a 34-page draft was
nearly ready. On a feverish last night of negotiations following the president's
inauguration on Dec. 1, parties finally agreed on the wording of the proposed
energy reform. At
, Mr. Murat broke
open a bottle of Johnnie Walker Blue Label and poured everyone a glass. They
raised their glasses and offered each other a toast: "To