MEXICO CITY — Mexico is increasingly concerned about a flood of used and off-price clothing imports from the U.S. that are denting sales at a time of economic uncertainty.

“Our country can’t support this level of imports,” said Jose Cohen, the new president of textiles lobby Canaintex, adding that the unwanted shipments will likely total 27 million kilos this year, matching last year’s rate but lower than the 32 million kilos reported in 2015. “These clothes hurt our industry and consumers because they bring phytosanitary and health issues,” Cohen added.

Despite the comparative decline from two years ago, Cohen said the activity steals $700 million in sales from the local apparel sector, which is struggling under falling sales as Mexico’s economy declines amid uncertainty surrounding the renegotiation of the North American Free Trade Agreement.

According to Cohen, 100 million pieces of worn and discounted apparel will likely enter Mexico this year. Selling at $7 on average in the country’s flea markets and off-price stores, they are worth $700 million, or 3.5 percent of the $18 billion to $20 billion domestic clothing sector.

Cohen said much of the clothing is used or from off-season collections U.S. retailers dump on the secondhand market to stem inventory losses. However, adding salt to the wound, many of the clothes are made in China, Vietnam and elsewhere in Asia, Mexico’s top competitors for U.S. sourcing.

The bulk of the unloaded merchandise includes aspirational labels such as American Eagle, Abercrombie & Fitch, Tommy Hilfiger, Levi’s or Calvin Klein, which typically sell well in Mexico, officials said. Ironically, much American Eagle, Tommy and Levis’s apparel is made in Mexican maquilas that export to the U.S.

Leading apparel franchiser Axo sells Tommy Hilfiger and Abercrombie in the formal retail channel, which has also been hit by anti-American boycotts fueled by President Trump’s anti-Mexico policies in the past six months.

Meanwhile, reports surfaced that Mexican apparel manufacturing technology lags behind Asian and other emerging market rivals, with executives at recent denim trade fair Expo Denim saying that only 15 percent of the supply chain has updated its cutting and sewing equipment.

Cohen strongly disputed that, however, noting that the textiles and apparel sector has invested $1.5 billion in the past three years to modernize its machinery, especially in the key denim sector supplying Levi’s, Wrangler, Lee and many others and which is 80 percent automated, he claimed.

He said automation is at 60 percent for most of Mexico’s large, for-export maquilas which have also bought new machinery in recent years. That said, Cohen acknowledged “This year, we are looking at flat growth of maybe 1 percent compared to 1.8 percent last year,” without providing absolute figures.

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