Mexico votes for new president, leftist rebel favored to win

By Dave Graham

MEXICO CITY (Reuters) - Mexicans vote for a new president on Sunday in an election tipped to hand power to an anti-establishment outsider who would inject a new dose of nationalism into government and could sharpen divisions with Donald Trump's United States.

Former Mexico City mayor Andres Manuel Lopez Obrador has led opinion polls throughout the campaign and would be the first leftist to take the presidency in decades in Mexico if he ousts the ruling centrist Institutional Revolutionary Party (PRI).

Runner-up in the 2012 and 2006 elections, Lopez Obrador pitches himself as the only man capable of cleaning up a political class whose credibility has been ground down by persistent graft, soaring crime levels and years of sub-par economic growth.

"The new president of Mexico will have moral and political authority to demand everyone behaves with integrity and make honesty a priority as a way of life," Lopez Obrador said in his campaign finale in a soccer stadium in the capital on Wednesday.

The law bars current President Enrique Pena Nieto from seeking re-election. But his popularity crumbled as his name became tainted by investigations into alleged conflicts-of-interest and embezzlement scandals engulfing top PRI officials.

Campaigning relentlessly around Mexico for the past 13 years, Lopez Obrador has watched political careers rise and fall as established parties were consumed by the country's social and economic problems and the responsibility of power.

For a graphic on Mexico's presidential election, click here (...)

"Let's hope Mexico changes," said Oswaldo Angeles, 20, a Lopez Obrador supporter from Atlacomulco, a longstanding PRI bastion some 55 miles (90 km) from Mexico City and hometown of Pena Nieto. "Right now, we don't know if we're coming or going."

Lopez Obrador, 64, has been vague on policy details. Seeking to harness support from economic nationalists, leftist liberals and social conservatives, he vows to reduce inequality, improve pay and welfare spending, as well as run a tight budget.

A vocal opponent of the government's economic agenda, his criticism has been tempered by business-friendly aides.

But he has played with the idea of referendums to resolve divisive issues like whether to continue with Pena Nieto's opening of the oil and gas industry to private capital.

His rivals Ricardo Anaya, an ex-leader of the center-right National Action Party (PAN) heading a right-left alliance, and PRI candidate Jose Antonio Meade, a former finance minister, differ only in nuance in their support of the energy reform.

Their efforts to catch Lopez Obrador have been hampered by attacks on each other, allowing him to build a lead that some opinion polls have put in excess of 20 percentage points. They also represent the only two parties to have ruled modern Mexico.

TRUMP THREAT

If victorious, Lopez Obrador faces a tougher security situation than did Pena Nieto. The election campaign has been the bloodiest in recent history and murders are at record highs.

The next president will also inherit a simmering dispute with U.S. counterpart Donald Trump over migration and trade, with talks to rework the North American Free Trade Agreement (NAFTA) unresolved, pressuring Mexico's peso currency.

Trump has threatened to pitch North America into a costly trade war over NAFTA, and his insistence that Mexico pay for his planned border wall has deeply angered many Mexicans.

Lopez Obrador has trodden carefully and wants to broker a deal with Trump under which Mexico would work to rein in illegal immigration in return for economic support. [L1N1TC09R]

If that proves impossible and Trump keeps provoking Mexico, few think the fiercely patriotic Lopez Obrador will stay silent.

How much heft Lopez Obrador can bring to bear both domestically and internationally will depend significantly on his control of Congress, where no party has held an outright majority since 1997 in Latin America's no. 2 economy.

Polls suggest his National Regeneration Movement (MORENA), a party that has only existed formally since 2014, could be close to reaching a majority. However, markets may react negatively if voters give him too free a hand in Congress.

Lopez Obrador has been a divisive figure in Mexico since bringing much of the capital to a standstill for weeks with massive demonstrations to protest his 2006 election loss.

His commanding poll lead this time around has led analysts to question how deep-rooted the support really is.

"There's a sense of poor old (Lopez Obrador), he's not had a go yet, it's his turn. We may as well give it a shot," said Sofia Lara, 25, a graphic designer in Mexico City backing Anaya.

(Reporting by Dave Graham; Editing by Daniel Flynn and Susan Thomas)