Industry groups differ on Mexico’s WTO China complaint
US textile industry experts are urging the American government to step up and support the recent complaint filed by Mexico at the World Trade Organization (WTO) on Chinese industrial policy regarding the textile and clothing sector.
Cass Johnson, the president of the National Council of Textile Organizations (NCTO), says he anticipates the US government will back Mexico's claim: "[It is a] very good thing, good for everyone. We will be urging them to support the Mexican initiative at the WTO."
Despite this, the US government has so far not indicated it will become a third party supporter to a Mexico-led WTO disputes case on Chinese textile and clothing policy.
"The United States is obtaining a copy of the complaint and will evaluate US interests upon reviewing it," a spokeswoman from the US Trade Representative (USTR) told just-style.
While Washington considers its position, an official from the Mexican government also told just-style he was confident Mexico will be successful in its complaint, with or without support from other countries.
"We do believe we have the arguments to win it on our own. And if any other country decides to join the process, the Mexican government may be willing to play along those lines to reinforce their case as happened with the raw materials complaint," said the official, referencing a WTO case won earlier this year by Mexico, EU and the US against China's restriction on exports of raw materials.
Diplomats in Geneva have also told just-style that the US government is unlikely to publicly support Mexico's position so close to the American Presidential election on 6 November - but a more forthright decision could be expected shortly after the vote.
The European Union (EU) will also have to decide whether to back the Mexicans, and already there are signs that Europe's clothing importers could resist the move, while exporters may back it. A spokesperson for the European Commission's directorate general (DG) for trade would not comment on "an ongoing international trade investigation."
Meanwhile the European Apparel and Textile Confederation (Euratex) is also cautious.
"It is clear that being China, an economy governed by central planning, public intervention in the economy is a reality and in this sense it is very likely that the Mexican complaint has legal grounds, but again we cannot comment more without having concrete information", explains Luisa Santos, Euratex's international affairs chief.
She points out Chinese textile and clothing exports to Europe reached EUR37.4bn in 2011, while in 2006 they were only EUR24.1bn. "However we have to point out that our exports to China are also growing from EUR1bn in 2006 to EUR2.1bn in 2011", Santos adds.
Jef Wintermans, director of Modint, the Dutch trade association for fashion, interior design, carpets and textiles, told just-style the EU should keep away from the dispute.
"I challenge the wisdom of the Mexican move", Wintermans says, saying such action would not help boost trade.
Indeed, he believes a Mexico victory (if followed by a withdrawal of Chinese subsidies to its clothing and textile sector) would raise the price of garments worldwide, when Chinese exports were already becoming dearer because its labour costs are increasing.
While he says he is not supporting any unfair trade practice, Wintermans believes Mexico is trying to protect "a [garment] industry that apparently is losing its competitive advantage".
With additional reporting by Carmen Paun.
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