MEXICO CITY — Mexico hopes to launch a much-awaited textiles and apparel aid package by Christmas to shield the industry from a flood of sub-valued Asian products, an Economy Ministry official said.
His comments came shortly after the government snagged a 250-strong textile contraband network flouting 500 million, or $36 million at current exchange, in taxes, adding to $660 million evaded from such organizations this year.
“The package is definitely moving ahead,” said the official, who requested anonymity, adding that it’s expected to be ready by year-end or sooner. “We are getting ready to start the approval process for all the entities [government] involved.”
The package will be “very similar” to an eight-pronged one introduced for the footwear sector in August that sets import duties at 25 to 30 percent, limits import flows to nine custom ports, forces importers to give a five-day notice of a shipment’s arrival and allows industry observers to work in customs offices.
“We hope this will come by year-end, though given everything that’s happening in Mexico, it may get a bit delayed,” Jose Manuel Martínez, general manager of key apparel industry lobby Canaive, said.
Mexico’s government is roiled under a slew of corruption scandals, most recently involving the alleged massacre of 43 students that triggered huge demonstrations demanding the resignation of President Enrique Peña Nieto.
Mexico-China political relations are also cooling after Mexico last week canceled a bullet-train contract days after handing it to a Chinese consortium which has since threatened damage compensation. While some said the impasse could hamper negotiations to settle Mexico’s WTO suit against China’s unfair exporter subsidies, Martinez said that’s unlikely.
“These are two very separate issues,” he noted, adding that the process continues to advance, though slowly and gradually.
China is responding to a customs cooperation agreement between both countries tackling the suit’s dumping concerns. Therefore, Martinez said Mexico is not in a rush to step up its claim. “We would of course like to resolve all the issues, but we are moving step by step,” Martinez said.
Canaive’s President Sergio Lopez de la Cerda had expected this month’s meeting between Nieto and Chinese counterparty Xi Jinping to yield a breakthrough after continual delays in reaching agreement. Canaive tabled the suit in October 2012, claiming China’s illegal subsidies (which can equal as much as 35 percent of a garment’s price) were wreaking havoc in Latin America’s second-largest clothing industry. In 2014, Chinese imports are set to triple, de la Cerda said, though he would not disclose a figure. Meanwhile, the industry reported third-quarter sales fell 5.6 percent and 7.4 percent for textiles and apparel respectively.
The Economy Ministry official said a 5 percent duty against Chinese imports (set to expire in January) will be extended as part of the aid package.