Voters in Mexico will crowd polls Sunday to elect a new president, who faces challenges growing the busy export trade that has enriched his country's corporate sector — and America's — in the 23 years since passage of the North American Free Trade Agreement.

U.S. wealth and Mexican labor make both countries rich in competition with China and Europe, trade boosters say. But President Trump's demands for rewriting NAFTA, Mexico's promise to boost its fees on U.S. goods in retaliation for Trump tariffs, and the expected election of big-government populist Andrés Manuel López Obrador to Mexico's powerful presidency in voting July 1, spooked investors at last week's Latin America investment conference sponsored by BlackRock's iShares funds group.

"The next two months will be very important," with the Mexican election, and practical deadlines for President Trump's efforts to update or replace NAFTA, said Tina Byles Williams, chief executive and chief investment officer at Philadelphia-based FIS Group, which manages about $10 billion in global stocks and bonds for clients including Pennsylvania and North Carolina state pension funds.

If a NAFTA deal doesn't get settled by early August, "I think the president [Trump] will abrogate NAFTA and attempt to get bilateral [U.S.-Mexico and U.S.-Canada] trade deals," Byles Williams added. "You need the [current, pro-U.S. trade] Mexican Congress to ratify a deal if one is struck in that time frame. And then you have to have our Congress ratify such a deal by December, before [López] Obrador begins office."

Stock-watchers at Vanguard Group told investors in a recent report they expect a NAFTA deal next year or later, with little disruption, as cool heads on all sides put money-making over political posturing. Yet, as President Trump likes to point out, most Mexican exports go north to the United States, giving the U.S. leverage if it continues to press for favorable tariffs and terms.

If the U.S. pushes too hard, Mexico could follow other Latin American countries, where "the so-called de-gringo-ization" of exports, with development, financial, and trade deals increasing between Latin American nations, China, Europe, and Canada, "has been a trend for the past 25 years," Byles Williams said at the BlackRock event.

Now, Mexico may finally feel obliged to diversify its exports, instead of relying so much on U.S. markets. Trump's moves would "tip us away from the U.S. as being the main player in Latin American trade" and increase the appeal of shipping to China, Byles Williams added.

She expects President Xi Jinping will present the United States "as the big bad bully, kind of like what [Russia's] President Putin has done," to justify painful fiscal or economic reforms in his country as well as new pressures on its trading partners. That won't help U.S.-Latin American trade.

The Mexican currency, she added, could take a hit: "I think the peso has a lot further to fall." FIS also expects a weaker Brazilian real, and it has sold Brazilian small-cap exchange-traded funds to reduce exposure for Pennsylvania and other clients. Yet, Brazil could benefit if U.S.-Mexico relations continue to deteriorate: "I don't know if it's a trade war yet, but Mexico is a clearer casualty," Byles Williams said. By contrast, "Brazil, Colombia, maybe Chile, are the brightest spots in Latin America."

"Bullish on Brazil, bearish on Mexico, neutral on Argentina," was the similar approach adopted by Patrick Jamin, chief investment officer at another investment group that tracks Latin America, NorthCoast Asset Management in Greenwich, Conn.

At the start of the conference, BlackRock exchange-traded funds strategy chief Christopher Dhanraj posted a report reviewing the U.S. stake in Mexico's vote.

He noted that López Obrador, known as AMLO for his initials, is familiar to many Mexicans: He was mayor of Mexico City for the social-democratic Party of the Democratic Revolution, then split to form his own, MORENA. The name is both an acronym for "National Regeneration Movement," and a word for a woman who is, like most Mexicans, of indigenous heritage or mixed race, unlike the nation's European- and Middle Eastern-descended business elite.

AMLO, BlackRock notes, "enjoys a sizeable lead in the polls, and his victory is becoming most investors' base-case scenario." Rival candidates Ricardo Anaya, who represents an odd alliance of the conservative PAN (National Action) party and AMLO's old PRD, trails, and José Antonio Meade, of the once-dominant PRI (Revolutionary Institutions) party, is running last, amid rising political and narcotrafficking murders in several Mexican states.

Also at stake: Will voters give MORENA control of the Mexican Congress, so it can ram through constitutional changes that will make life harder for business? Or will it be forced to compromise with rival party factions? Mexico's economy has been "reasonably stable, with sound growth, healthy employment, and lower inflation" — and a falling birth rate that may reduce emigration pressures and force wages higher, according to BlackRock.

But investment in Mexico has declined this year, given the rising uncertainty over how hard both AMLO will hit Mexican business with new taxes and restrictions — plus Trump's tariffs. Mexican stocks have been dropping since May and are down nearly 10 percent in U.S. dollar terms (a little more than half as much in pesos).

"An AMLO victory could lead to an increase in public investment, which could be beneficial in the short term," at least until inflation and interest rates start going up, BlackRock added. But that could be followed by a painful drop in export sales, increases in debt and interest rates, and continued decline in investment, which could stall Mexican economic growth, boosting social pressure along the U.S. border.

Some investors are urging clients to take a long view. Mexico's steel industry, along with Canada's, will be hurt by the Trump administration's 25 percent U.S. import tariffs, but such exports are only about 0.3 percent of Mexico's national economy (gross domestic product), Vanguard told investors in its trade note last week.

But "a U.S. withdrawal from NAFTA certainly remains a risk," Vanguard added.  Until the conflict is settled with a new agreement, "investors can likely expect occasional market volatility resulting from intemperate political rhetoric."