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Mexican ruling party faces defeat but might back economic reforms

TIJUANA, Mexico -- Mexico's ruling party faces heavy defeat at a presidential election on Sunday and already is preparing for life in the opposition, where it could help pass economic reforms that it was unable to push through in power.

The conservative National Action Party, or PAN, ushered in a new era in Mexican democracy in a 2000 election that broke the Institutional Revolutionary Party's (PRI) 71-year grip on power and raised high hopes of change.

Twelve years on, however, Mexico is mired in a brutal drug war and the economy has suffered from sluggish growth, in part because two successive PAN governments have failed to get structural reforms through an opposition-controlled Congress.

Josefina Vazquez Mota, the PAN candidate, is paying for those failures. Running to become Mexico's first woman president, she is far behind front-runner Enrique Pena Nieto, who touts himself as the new face of the PRI.

Most polls show her in third place to succeed President Felipe Calderon, who is not allowed to seek re-election.

Faced with the possibility of a stinging defeat, PAN leaders already are looking back at what went wrong and plotting how to reshape their strategy in the future.

While polls show Pena Nieto winning the presidency comfortably, Congress will be a key battleground as he may need the support of PAN lawmakers for a series of economic reforms.

Calderon took office in 2006 with his own ambitious plans to lure private investment to state oil giant Pemex, reform restrictive labor laws and restructure the tax system in order to strengthen the economy and tackle poverty.

But his hopes were repeatedly dashed by PRI lawmakers loathe to hand victories to their rivals before this election.

Now Pena Nieto — a young former governor of Mexico's most populous state — has promised to change the PRI's ways, floating ideas for reform that look very similar to Calderon's old plans.

The PAN, which sees itself as a party of principles, may have to choose between helping to pass laws it believes in or looking for political payback.

Several PAN politicians interviewed by Reuters say they will not block positive change for Mexico even if it means collaborating with their often obstructive old foes.

“We cannot act like them,” PAN Senator Alejandro Gonzalez Alcocer said of the PRI. “We know Mexico needs these structural reforms to jump ahead in growth. If Pena Nieto sticks to what he has said, we will pass his reforms.”

PRI Resistance

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