Talks fail to resolve Mexico dispute with China

MEXICO: WTO talks fail to resolve dispute with China

By Keith Nuthall | 27 November 2012

Talks between Mexico and China at the World Trade Organization (WTO) have failed to resolve a dispute over Mexico's claims that China is illegally subsidising its textile and apparel producers, the Mexican government has told just-style.

A spokesperson for Mexico's ministry of economy said the two days of WTO consultations did not result in a settlement, opening the way for Mexico to request a WTO dispute panel to rule on its claims.

"Unfortunately it was not possible to reach a satisfactory solution," the spokesperson said. "However, Mexico reiterates its willingness to find a negotiated solution to the benefit of the textile and clothing industries in Mexico."

Under WTO rules, Mexico must wait until 15 December before it can request that a disputes panel be set up to rule on the matter.

Mexican officials said no decision has been made whether to pursue such a request, although it is expected.

Mexico initiated WTO dispute proceedings on 15 September, charging that China was providing illegal subsidies in the form of exemptions and reductions from income tax, import duties, and value-added tax, low-cost loans and debt forgiveness, discounted land use rights, electricity, cash payments, and other measures.

China refused requests from the United States, the European Union, Australia, Brazil, Colombia, Guatemala, Honduras and Peru to sit in on the consultations because of trade interests in the dispute, Mexico said.

However, China cannot prevent these countries from participating as third parties in any subsequent WTO panel proceedings.

Sectors: Apparel, Fibres & fabrics, Manufacturing, Sourcing