Peru Government has been negotiating with its Chinese counterpart to ink a free trade agreement (FTA) which will initiate tax-free transaction of goods between the two countries.
However, the textile and clothing industry of Peru has urged the Government to take safeguarding measures against China.
This is largely because China is quiet capable of flooding Peruvian markets with its goods resulting in job losses for thousands of Peru's textile workers.
Presently, there are about 650,000 people working in Peru textile industry and if imports from China are allowed to increase, a large number of these may be left without a job.
While workers in Peru receive a wage of US $1.25 per hour, the salary of a Chinese worker is mere $0.25 and this makes it easier for the latter to cut down on its cost of production and export good at a price much cheaper than what is available in Peru.
In the year 2007 alone, imports of Chinese textile and clothing products made by Peru increased by 43 percent. Experts believe that the FTA would only step-up the rate of cheaper imports reducing the value of Peruvian made goods.
Mr Martin Reano, Director of the textile department of Peru Industrial Association, opined that unless protective measures are taken, Peru is likely to get severely affected by the agreement with China.
Fibre2fashion News Desk - China
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