Mexico’s Steel Pact Exposes a Dangerous Antitrust Silence

The Mexican Federal Government recently announced what it characterized as a “historic” agreement with the domestic steel industry aimed at prioritizing the use of Mexican steel in public infrastructure projects. The policy objective was presented in unequivocal terms: reducing dependency on imports, strengthening domestic production capacity and promoting closer coordination between government and industry participants.

However, beyond the political and industrial implications of the announcement itself, the most noteworthy aspect may ultimately be the institutional silence that followed.

Particularly, the silence of Mexico’s newly created National Antimonopoly Commission (“CNA”).

This silence is especially significant considering that the 2025 reform to Mexico’s Federal Economic Competition Law (“LFCE”) was publicly framed as a substantial strengthening of the country’s antitrust enforcement framework. Among other changes, the reform expanded the scope of prohibited conduct, increased administrative sanctions and adopted a considerably stricter approach toward coordination mechanisms and exchanges of sensitive information among competitors.

Nevertheless, in the context of a publicly announced agreement involving a highly concentrated industry, designed to promote domestic producers, discourage imports and align procurement strategies for public infrastructure projects, the CNA has not issued any meaningful institutional or technical position regarding the potential competition law implications of such measures.

To date, there has been no public statement, guidance, warning or technical assessment issued by the authority.

From a competition law perspective, this absence is difficult to ignore.

The LFCE expressly prohibits agreements, arrangements or coordination among competitors aimed at manipulating prices, restricting supply, allocating markets or coordinating commercial strategies and public bids. Furthermore, the 2025 reform significantly broadened the authority’s ability to scrutinize exchanges of commercially sensitive information among competitors, particularly in concentrated sectors or industries with structural barriers to entry.

Against this backdrop, a legitimate legal question inevitably arises:

How does the CNA intend to assess a government backed industry agreement that may directly or indirectly favor domestic producers and disincentivize foreign participation in a concentrated market?

Thus far, the authority’s apparent answer has been silence.

Historically, Mexican competition authorities sought to build institutional legitimacy around the principle that competition laws must be enforced consistently, including in politically sensitive sectors or in cases involving significant economic policy considerations.

However, recent developments risk undermining that perception.

The constitutional elimination of COFECE as an autonomous regulator and the subsequent creation of the CNA as an agency formally sectorized within the Ministry of Economy immediately generated concerns among practitioners, investors and market participants regarding the future independence of antitrust enforcement in Mexico. Although the Government repeatedly stated that the CNA would maintain technical autonomy, the current lack of visible action in connection with the steel agreement will likely intensify skepticism regarding the authority’s practical independence.

This concern becomes particularly acute when the potentially anticompetitive conduct originates not from private market participants acting independently, but from initiatives promoted or coordinated by the Federal Government itself.

Under such circumstances, the absence of institutional scrutiny sends a problematic signal to the market.

Particularly to foreign companies, importers, manufacturers, construction firms and international investors operating in Mexico under the assumption that the country continues to maintain an independent and technically driven competition enforcement framework.

Indeed, a growing perception may emerge that certain forms of coordination or market intervention could receive different levels of antitrust scrutiny when aligned with broader industrial or political objectives pursued by the Federal Government.

Such a perception poses significant risks not only for competition policy, but also for legal certainty and investor confidence more broadly.

Importantly, the issue is not whether governments may legitimately support domestic industries. Industrial policy initiatives exist in virtually every major economy. The legal concern arises when the authority responsible for enforcing competition law appears unwilling to evaluate potential antitrust implications precisely in situations where political sensitivities may exist.

The potential market effects are not merely theoretical.

Importers may face artificial market displacement. Construction and infrastructure projects may experience increased costs due to reduced competitive pressure from international suppliers. Foreign manufacturers could encounter disruptions in procurement and supply chain structures. Mexico’s trading partners may also begin questioning whether such measures operate, in practice, as indirect national preference mechanisms inconsistent with international trade obligations.

Moreover, current developments increasingly suggest that the agreement forms part of a broader import substitution strategy accompanied by growing non tariff restrictions affecting international trade flows and foreign market participation in Mexico.

Yet despite these potential implications, the CNA remains publicly absent from the discussion.

There is currently no clarity regarding whether the authority is conducting any competition assessment related to the agreement, no transparency concerning applicable analytical standards and no public effort to provide certainty to market participants regarding the limits of permissible coordination under the new LFCE framework.

The apparent lack of institutional engagement may ultimately become the most consequential aspect of this entire development.

Competition laws rarely enforce themselves. Historically, significant antitrust enforcement actions frequently arise when affected market participants actively challenge policies, agreements or conduct perceived as artificially distorting competitive conditions.

Absent meaningful institutional action, a concerning perception may gradually consolidate within the market: that competition enforcement in Mexico may no longer operate independently when broader governmental policy objectives are involved.

Should that perception take hold, the consequences will extend well beyond the steel industry itself.

They may ultimately affect the credibility of Mexico’s entire competition law and enforcement system.