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Mexico opposition leads in Baja California, boosting reform pact

A police officer stands guard at a polling station in San Bartolome Quialana, in the outskirts of Oaxaca, July 7, 2013. REUTERS/Jorge Luis P
A police officer stands guard at a polling station in San Bartolome Quialana, in the outskirts of Oaxaca, July 7, 2013. REUTERS/Jorge Luis P

By Dave Graham and Luc Cohen

MEXICO CITY (Reuters) - Mexico's opposition conservatives were heading for victory in a regional election early on Monday, likely bolstering a fragile national cross-party pact forged to broker economic reforms.

Nearly half of Mexico's 31 states held elections on Sunday for a mix of local parliaments and municipal governments, but the focus was on the race for governor in Baja California, a stronghold of the conservative National Action Party (PAN).

Both the PAN and President Enrique Pena Nieto's Institutional Revolutionary Party (PRI) claimed victory in the state after polls closed, but an initial vote count showed the conservatives maintaining a narrow but consistent lead.

With nearly 96 percent of the ballots counted, the PAN had an advantage of 3 percentage points over the PRI, or 47.2 percent of the vote, preliminary results from the local electoral authority showed.

The Baja California vote has been under close scrutiny because a defeat for the PAN was expected to rattle the "Pact for Mexico" that Pena Nieto made with opposition leaders to strengthen his hand in Congress, where the PRI lacks a majority.

A victory for the PAN could prove more useful to Pena Nieto than a win for his own party if it helps strengthen the political accord he unveiled after taking office in December.

The PAN lost control of Mexico in last year's presidential elections and it is now the third force in Congress. But Pena Nieto needs to keep the conservatives on board to push through planned overhauls of state oil giant Pemex and the tax system.

Those two reforms are due to be presented by early September, and Pena Nieto is keen to secure as much political support for them as possible, particularly as the Pemex shake-up is likely to face stiff opposition from the left.

Before results came in, Manlio Fabio Beltrones, the PRI's leader in the lower house of Congress, encouraged the parties not to dwell on the outcome of Sunday's elections.

"Once election day has passed, we need to focus on the pending legislative work," Beltrones said.

VIOLENCE

Baja California is one of the PAN's few remaining bastions, and the first state it captured from the PRI 24 years ago. It proved a major stepping stone to the PAN claiming the presidency in 2000 after 71 consecutive years of rule by the PRI.

Throughout the election campaign, PAN lawmakers accused the PRI of trying to fix the outcome by buying votes, and they warned that any sign of fraud could scuttle the national pact.

Outside of the gubernatorial contest, partial results in major mayoral races showed the PAN looked set to take city hall from the PRI in Mexicali, Saltillo and Aguascalientes.

By contrast, the PRI led in Oaxaca and other rural strongholds, as well as the populous Gulf state of Veracruz.

A few hours before the polls closed, Madero was asked how he viewed the future of the Pact, and said: "the need to reach agreements is still there, it's still imperative for Mexico."

The PAN's image has been hurt by public infighting since last year's national election defeat, when voters punished the party for failing to curb violence between warring drug cartels that has claimed more than 70,000 lives since 2007.

The bloodshed has continued under Pena Nieto's rule and the campaign for the July 7 elections was marred by the murder and kidnapping of a number of candidates.

The Baja California election was also deemed to be crucial for Madero's continuing leadership of the PAN. Any battle for control of the party could threaten the pact, which has already pushed a big education reform and a shake-up of competition in the telecoms sector through Congress.

But the central planks of Pena Nieto's hopes to raise economic growth to 6 percent a year from an average of barely 2 percent since the millennium began are reforms to bolster tax revenues and open up Pemex to more private investment.

Those measures may be in doubt if the pact falls apart.

(Additional reporting by Michael O'Boyle and Tomas Sarmiento; Editing by Bill Trott)

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