GENEVA — Stiff competition from low- cost Asian competitors is expected to have adverse trade and investment effects on Mexico’s clothing export sector, according to a recently released report.
The latest economic survey of Mexico by the Paris-based Organization for Economic Cooperation and Development said there is evidence that some of the country’s export-processing zones, known as maquiladoras, “suffer from a loss of cost-price competitiveness, as productivity gains have fallen short of real wage increases.”
As a result, the effect on labor-intensive industries such as clothing is that “the decline is likely to be durable, with several multinational companies moving their projects to China or other competitive locations in Asia and Latin America.”
In 2002, Mexico — the world’s fifth-largest clothing exporter — posted a 3 percent decline in shipments, to $7.75 billion. That followed a 7 percent drop in 2001.
Last year, U.S. textile exports to Mexico totaled $4.2 billion, representing 76.4 percent of Mexico’s textile imports, according to World Trade Organization estimates.
The coming end of apparel and textile quotas — which WTO nations are dropping on Jan. 1, 2005 — is also expected to put Mexican exporters under greater strain in their principal market, the U.S., said trade diplomats.
Mexico is now the U.S.’s second- largest supplier of imported textiles and apparel. Its 10.6 percent market share for the year ended September trails China’s 14.3 percent, according to U.S. Commerce Department data.
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