Experts Call for Latin ‘Textiles Mart’

Mexico and Latin America’s leading textile and apparel executives want a stronger textiles trading bloc between Mexico, Peru, Colombia and Chile.

Mexico and Latin America’s leading textile and apparel executives have called for the creation of a stronger textiles trading bloc between Mexico, Peru, Colombia and Chile — an effort they hope will spawn the creation of a “textiles mart” to help the region battle cutthroat Chinese competition.

“Our industries are ready and we can create a Latin textiles mart [market] to improve the quality of our products and showcase them to the world,” Rosario Mendoza, managing board director of the Jalisco State branch of Mexico’s top textiles trade association, Canaive, said during the Intermoda fashion fair in Guadalajara, Mexico. The fair, held from Jan. 14 to 18, received 21,000 visitors, up 5 percent from last year.

Her comments came as Mexico’s newly elected government is reviewing whether to allow the controversial Dragon Mart project to be built in Cancún, an initiative the government of Quintana Roo (the state where Cancún is located) is keen to pursue to diversify the tourist city’s industries.

“This would be an exhibition center for Chinese companies to show and sell their apparel products,” Mendoza claimed. “Mexico cannot accept this. It’s an insult to our industry, which has been suffering from years of unfair competition and subvalued goods from China.”

Despite government and Customs authorities’ efforts to tame Chinese imports, some observers said they could match last year’s 20 percent increase in 2013.

According to Mendoza, the industry has asked Mexico’s economy secretary to reject the $200 million initiative that would establish a 1,385-acre facility where Chinese companies would market not just apparel but all kinds of products, including toys and furniture, in Mexico and North America. Canaive said the initiative runs against the group’s efforts to generate and recover thousands of Mexican textile jobs lost to the Chinese in recent years, as well as its plan to develop Mexican designers and new clothing brands.

Mendoza said 1,600 Chinese companies would be able to participate in the market, which would open in 2014. However, some observers said the government could approve the project, as it is expected to be 90 percent owned by a group of influential Mexican investors and 10 percent by Chinese financiers.

Last October, Mexico launched a World Trade Organization complaint against China to stop the country from dumping subvalued apparel on its shores. Under WTO rules, both sides had 60 days to resolve the dispute. Mendoza said talks have stalled and a settlement may not be reached until next year.

“We need to continue fighting against China through efforts to add fashion to our products, not just for sale in Mexico but also abroad,” Mendoza said, adding that many Mexican companies are currently engaged in that process.

Here’s where the Latin Mart would help. Speaking at a luncheon to promote Peru’s efforts to boost apparel exports to Mexico, Peruvian Ambassador Elizabeth Astete said the time is right to deepen commercial ties between the four countries to deploy a textiles and apparel market strong enough to compete with Asia-Pacific’s.

“We are working to deepen our trade relations,” Astete said. “Our presidents have a very similar political and trade agenda.” Astete said a stronger trade agreement between the four countries is expected to be ready in the first half of 2013.

Experts said it was too early to say how the Latin Mart will actually work but it would provide a strategic export platform for the four countries’ textile and apparel industries to collaborate and reach the international markets, including Asia.

“We don’t need to be scared,” Mendoza said. “We have the right product mix and a strong enough industry to place ourselves in the heart of the Asian dragon.”

Peru is already working to do that. It has plans to take the Asian market by storm in a few years. It is working to enter China, Japan and South Korea to sell high-end apparel made from vicuña (the most expensive fabric in the world) to woo China’s booming millionaire set.

“We still need to do a lot of work to understand these markets before we get there, but the plan is to eventually go in with full force,” Igor Rojas, manager of Peruvian export promotion agency Promperu’s textiles division, told WWD. He added that Peru is also working to promote its top designers to create a “Made in Peru” fashion brand that can compete globally.

As Peru works to diversify exports outside the U.S., it expects to boost apparel trade with Mexico by more than 50 percent by 2014.

Not to fall behind, Mexico is also working to develop its emerging designers. The Intermoda fair hosted the second season of Mexico’s Designer Corner, a space aimed at developing the country’s new designers by helping draft an effective business and commercial strategy.

Headed by Mexican fashion expert Anna Fusoni, the corner has had good results for some designers, most notably for men’s wear label René Orozco, which last year saw a 150 percent sales increase and hopes to double them this year.

Other success cases are Aline Moreno, who recently began selling her collection in San Diego, and Natalia Ferriz, a new group addition, whose women’s wear collection, Apple Tea, is now stocked at upscale department store chain El Palacio de Hierro.

The Corner, which added four new designers this year, is helping them sell their clothes to boutiques and small retailers seeking to stand apart from the Zaras and H&Ms of the world. For now, it has no immediate plans to promote them outside Mexico, though this could change in the longer term, Fusoni said.

Last July, Canaive launched a strategy to unify the industry to beat the Chinese, dropping (at least temporarily) an earlier plan to strike antipiracy agreements with Chinese counterparts.

Under the plan, textiles lobby Canaintex and footwear, accessories and jewelry associations forged alliances to build a “Made in Mexico” brand. As planned, a fashion council was also set up in Guadalajara last fall to manage the process, Mendoza said.

“We are working to become a country that generates fashion as opposed to one that just makes clothes,” she noted.

Mexico is also looking to promote more established designers. It’s set to bring Fhernando Colunga, a high-end London-based Mexican designer (who makes hats for the British royalty) to Mexico to produce and expand his apparel line and boost the country’s fashion profile.

While it will look for similar talent around the world, Mendoza said the council will also work to promote local designers outside Mexico by financing their participation in international fashion fairs, among other actions.

“Very often, design careers [degrees] have courses that have nothing to with fashion,” Mendoza noted. “We are working to change this and to increase international student exchange programs.”

Separately, Mendoza said China’s rising labor costs and delivery delays are providing an opportunity for Mexico to raise sales to the U.S., which is demanding more apparel from recently streamlined, full-package firms such as André Badi, Modatec and Dunes, Mendoza said.

Mexico is also working to diversify its exports to Western Europe, South America and Asia, she added.
As exports are forecast to rise sharply in 2013, the textiles and apparel industry could grow 5 percent this year, up from 4 percent in 2012, according to Mendoza.