Mexico is to take safeguard against textile imports from Asia
Mexico has announced detailed safeguard measures against textile imports from Asia at dumping prices
The Mexican industry associations Canaive and Canaintex are working closely with the authorities to monitor imports and since last December also a new price alert system is in place to detect practices of underpricing, or better dumping prices. According to the Ministry of the Economy, since 1997 its Unit of International Trade Practices has initiated 209 investigations and 12 were textile-related and were mostly focused on exporters from Asia (including China, Hong Kong, Taiwan and South Korea). There are still special safeguard measures possible according to the WTO protocol with China but they end in 2013. Mexico is evaluating to make a claim at the WTO arbitory council.
The Mexican textile sectors cover the entire value chain, including natural and man-made fibres and yarns, knitted and woven fabrics. Apparel manufacturers in Central America source fabrics from Mexico, especially denim, denim/Lycra blends and special man-made fibres qualities. The Mexican apparel industry produces basic garments such as five pocket denim jeans and knit tops mainly for export to the US. Mexican 2011 apparel exports amounted to US 5.1 billion and thereof USD 3.8 billion was exported to the U.S.A. Mexico ranks as fifth major exporter of apparel to America after China, Vietnam, Indonesia and Bangladesh. China and Hong Kong have made practically no textile investment in Mexico, because they prefer to export directly from their base. According to Jesús Castillo, Tax Partner for KPMG Mexico, Mexico is well recognised as a high quality manufacturer of export goods. Besides, the presence of large foreign retailers pushes the local garment manufacturers to be more efficient. However, in reality Mexican textile and apparel manufacturers have a minor role in their own domestic market, because except for the middle-income segment, the market is dominated by foreign suppliers.
The Mexican textile market is segmented in a flourishing luxury market, a middle-income market and a very price-competitive low-end market. For Hugo Boss and other international brand Mexico represents up to 60 % of sales in Latin America, but few of these brands have a local production. Other foreign companies such as Zara, C&A, Wal-Mart and Sears compete in the middle section with Mexican chains like Edoardo, Lineas, Liverpool, Suburbia and Palacio de Hierro. But the middle income customers are more and more also buy second-hand clothing imported from U.S.A.