MEXICO CITY — Mexico’s apparel industry has postponed plans to strike an antipiracy deal with its Chinese counterparts. Instead, it will partner with the textile, footwear and accessories sectors to launch a common project to build a much stronger “made in Mexico” fashion brand, Sergio Lopez de la Cerda, the new president of apparel association Canaive, told WWD in an exclusive interview.
The partnership will be struck with textiles and footwear associations Canaintex and Ciceg, respectively, as well as with smaller bodies representing the other sectors, Lopez said. It is the best way to tackle a growing volume of subvalued Chinese imports as well as a ballooning contraband and counterfeit trade, which has been apparel producers’ biggest headache for years, he added.
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The strategy does not mean that an antipiracy deal with Chinese counterpart the China National Textile and Apparel Council will not be pursued, Lopez said, adding that an accord could be reached in 12 months. WWD first reported in December that the two industries were in discussions about a possible antipiracy deal.
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In other revelations, he said Canaive has met with Mexico’s new president, Enrique Peña Nieto, to iron out a four-pronged strategy to shore up the industry’s fortunes. If the government fulfills its part of the deal, by 2016, illegal clothing sales could fall to four out of 10 items in Mexico, down from six out of 10 currently, Lopez predicted.
“We don’t think this is the right moment [to pursue the Chinese agreement],” he said. “There is a new government in Mexico and we are working to create a unified block comprising the textile, footwear, leather goods and jewelry sectors.”
He continued: “We need to have the government’s support and for the block to be strong so we can all go together to talk to the Chinese.”
To oversee the new effort, Mexico plans to launch the National Fashion Council, according to Lopez. The council will work to transform Mexico’s apparel industry into one that’s much more fashion-centric.
“A change of culture is needed,” Lopez noted. “We need to educate the industry to stop being an industry that produces basic clothing to one that generates fashion.”
To do this, companies will be encouraged to produce items from fashion concept to design to sale in order to generate a deeper fashion consciousness in Mexico as well as to export fashion, Lopez explained.
“Today, most companies make clothing and sell it for the price of a T-shirt or plain trouser,” Lopez said. “There is no value-added concept in the industry’s mentality.”
By joining forces, the country’s best clothing, accessories, footwear, leather goods and jewelry makers can work together to create a more powerful “made in Mexico” fashion wardrobe, increasing their appeal with domestic and international consumers. Lopez would not provide details about how exactly the associations will work together, adding that the strategy is confidential.
The four-part strategy includes efforts (which were not yet specified) to combat the counterfeit and contraband trade, strengthen support for new research and development projects and policies to “specifically and directly” support the sector, he said.
As part of the R&D promise, Peña Nieto pledged to build a new $9 million fashion innovation and design center in the town of Pachuca, which is located about an hour outside Mexico City. The center will be built in a local university to better prepare students for design and fashion careers and bolster fashion knowledge in the Mexico City area.
Lopez noted Mexico needs “all the billions we can get” for R&D. He said only 10 percent of Mexican textile and apparel firms invest in research.
“R&D is crucial and we need as many innovation centers as possible; also programs that link to academia and that offer design students at least four-month internships at fashion companies,” he said. “We also need industrial projects directed at generating fashion in Mexico. The Economy Secretariat has some we are partnering with, but we need many more.”
Peña Nieto’s plan also calls for giving economic incentives to companies prioritizing investment in fashion research as well as in exporting Mexican fashion. Lopez said the industry is also working to give more Mexican designers space in department stores and hypermarkets, which dominate Mexico’s clothing retail scene.
Chinese apparel imports to Mexico surged 20 percent to $728 million last year, forcing some 300 producers to shut down and leaving 3,000 people unemployed. But Lopez said tax collection and customs agency SAT’s new merchandise pre-validation system, combined with tougher customs inspections, mean Chinese imports will decline sharply this year.
As of June, imports had increased 10 percent in value but fallen 2 percent by unit, Lopez revealed. The pre-validation system alerts customs officials of the correct price imported Chinese and Asian merchandise should arrive at in Mexican ports, avoiding subvalued goods from entering the country.
“The results show the system is working and it’s just the beginning” Lopez enthused, predicting imports’ value will rise by 25 percent and volume fall by 10 percent by yearend.
Lopez noted Chinese items, including some women’s brassieres, have been entering Mexico with a price tag of $2 when they cost at least $3.50. This huge price disparity can also be seen with many other Asian apparel pieces arriving in Mexico.
According to Lopez, SAT has been more efficient at monitoring Mexican ports, controlling inspectors and ensuring they don’t engage in corruption, in addition to modernizing IT systems to catch organized crime rings that smuggle contraband apparel to Mexico.
He hopes the new government will continue these policies. If it does, and the industry can become a larger supplier of stylish items, consumers should begin favoring “made in Mexico” clothing, helping slash contraband and counterfeit apparel sales. Still, Mexico’s fledgling government will need to fulfill its promises for this to happen.
“Peña Nieto has all the good intentions in the world,” Lopez said. “Let’s just hope he will put them into action in December” when the new administration takes over.