Mexico in search of allies to support its case in WTO

22 Oct '12

1 min read

Mexico, which filed a complaint last week in the World Trade Organization (WTO) accusing China of violating international norms by giving subsidies and tax incentives to textile companies, is now in search of allies to support its case.

Some other countries may join the Mexican camp in the next one or two months, Reuters quoted Francisco de Rosenweig, Mexico’s undersecretary for foreign trade, as saying.

The official felt that having allies in the dispute would help in putting more pressure on China.

In its complaint to the WTO, the Mexican Government said China provides various subsidies to the Chinese companies in the form of exemption in income tax, value-added taxes and municipal taxes.

The complaint cited cash payments from government agencies, discounts on loans, land rights and electricity tariffs as some of the subsidies provided by the Chinese Government to textile and apparel companies.

As per WTO norms, China has to give a satisfactory explanation and resolve the dispute within 60 days of the filing of the complaint.

Mexico has massive textile trade deficit with China. In 2011, Mexico exported textiles and garments worth US$ 88 million to China and imported goods worth US$ 1.07 billion.

Fibre2fashion News Desk - India

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