MEXICO CITY — Mexico’s World Trade Organization lawsuit against China’s unfair importer subsidies is unlikely to be settled until after the summer, the textile and apparel industry’s leader told WWD, adding that imports continued to surge in 2013.
“The case has not moved at the speed we hoped,” said Sergio López de la Cerda, president of top industry lobby Canaive. “Still, both countries’ economy subsecretaries and two high-level working groups have been meeting regularly. We hope this will be resolved in the second half.”
In a win for the industry, which has been scrambling to tame a flood of Chinese and other subvalued garment imports for years, the government recently extended a plan to slash import duties on Chinese-made apparel by 5 percent until December 2014 — giving it more breathing room until the WTO complaint is resolved.
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Meanwhile, Lopez said the new administration of Enrique Peña Nieto must work harder to meet its pledge to tackle Mexico’s growing contraband trade, which industry executives have branded as “Mexico’s cancer.”
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That promise was part of a pact the administration and Canaive struck in fall 2012 to prop up the sector’s fortunes and help it create a more innovative and fashionable product suite for local sale and export.
“The government and SAT [the customs and tax collection agency] are moving to address the issue but they must launch tougher actions and expand the pre-validation system,” which checks undervalued merchandise against a reference-price matrix, Lopez said, reiterating past Canaive complaints that state actions to fight contraband are too weak.
Lopez added the industry’s goal to slash the contraband trade to about 40 percent of sales from 60 percent by 2016 could still be achieved if the administration toughens its stance.
That said, Lopez conceded Chinese imports continued to rise last year though he declined to provide precise figures. In 2012, Mexico imported $556 million worth of apparel from China, up 245 percent compared to 2011. Including textiles and apparel, the figure was $2.2 billion while Mexico shipped a mere $150 million to China, according to Canaive, which used the data to back its WTO suit. From January to April 2013, Chinese imports surged 93 percent to $204 million.
China apart, Mexico has been moving to create a more fashionable industry and a Made in Mexico label. As part of that effort, it is on track to inaugurate the National Center for Innovation and Fashion in the town of Pachuca near Mexico City in late 2015.
The facility will help textile and apparel makers research and develop new products modeled on international fashion trends, introduce cutting-edge manufacturing technologies and issue regulations to help propel the sector’s growth, Lopez said.
“There will be a market intelligence section to evaluate international trends and drive product innovation,” Lopez noted. “We will also enter into product-development alliances with three international centers, including Portugal’s Citeve.”
The center will also have a training and education division to help Mexican trademarks create more fashionable products for sale in the domestic and international markets, helping fend off Chinese competition.
A planned fashion council to help steer Mexico’s goal to create a stronger fashion identity and culture began operating recently. According to Lopez, the council will comprise a 24-member technical leadership committee including Mexican fashion expert Anna Fusoni and Beatriz Calle, who coordinates the annual Mercedes-Benz Fashion Week in Mexico City.
Regarding the Dragon Mart, a $200 million project to install 1,600 Chinese companies to market their products to the U.S. and the Latin America region from Cancun, Lopez remains hopeful the project will be scrapped or reshuffled to protect the industry’s interests.
“The Economy Ministry has recently shown more willingness to listen to our complaints and help mediate a fairer outcome,” Lopez said. He added the industry’s request for a Latin Mart to enable Mexico and other Latin American countries to export textiles and garments from the Caribbean beach resort could still be met.