Mexico wins support in its textile row against China

05 Nov '12

2 min read

Mexico has won support of the EU and six other nations, including the US, in its trade dispute against China, Mexican Secretary of Economy Bruno Ferrari said.

According to the Mexican Government, China extends subsidies to its textile and garment producers in the form of tax exemptions or reduced charges for goods and services like electricity and raw inputs. Moreover, producers in China also benefit from direct fund transfer and debt forgiveness policies of the Chinese Government.

Claiming that such subsidies have proved detrimental for the domestic textile and apparel industry, in October this year, Mexico invited consultation with China under the World Trade Organization (WTO) framework, which is a precondition for demanding establishment of a dispute settlement panel.

However, considering the number of proofs needed to establish a direct relation between the subsidies granted by China to its industries and it impact on the Mexican textile and apparel industry, the fight is not going to be an easy one, Mr. Ferrari added.

Although he does not foresee a mutually acceptable solution to the row, Mr. Ferrari said representatives from Mexico and China would meet at WTO’s Geneva-based headquarters in the third week of November in an effort to reach an amicable solution that can avert the need for establishment of the dispute settlement panel.

As per WTO norms, other member countries can extend their support to the applicant country, in this case Mexico, if a dispute settlement panel is established.

Fibre2fashion News Desk - India

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