Mexico Challenges China over Subsidies for
Clothing, Textiles
China is being called on to defend its support of
clothing and textile manufacturers, after Mexico City filed a complaint with
the WTO on Monday accusing Beijing of unfairly subsidising its domestic
industry. Citing a number of alleged government support measures, the Mexican
complaint adds to the list of a growing number of challenges by some of China’s
trading partners - in particular, the US - over what they claim is an unfair
use of subsidies.
The move comes as Mexico seeks to reduce its trade deficit
with China and to consolidate its position as a credible competitor to the
Asian economic powerhouse in its role as a key manufacturing exporter to the
US.
Trade
between the two countries has increased more than ten-fold between 2000 and
2011, according to official Chinese figures, with Mexico representing China’s
second largest trading partner in Latin America behind Brazil. It is, however,
the two countries’ evolving roles as competitors for a share in the US import
market which have come to characterise their relationship in recent years.
Protecting its ability to fairly compete for trade with other
countries is central to the complaint, clarified the Mexican statement
announcing the move. “The Government of Mexico reiterates its commitment to
fight any practice that improperly puts our products at a disadvantage compared
with other products in a third country market,” the government said.
The spat comes as China and Mexico have in recent months been
looking to improve relations following the tension which came to characterise
their competition for the US market.
In April, it was reported that the two countries had entered
into a cooperation agreement aimed at promoting a fairer balance of trade and
ending what the Mexican government described as “unfair Chinese practices” in
shoemaking. In December 2011, a series of trade agreements were concluded
between Mexico City and Beijing, in part to protect Mexico from cheap Chinese
imports.
This is the fourth time that Mexico has lodged a trade
complaint against China, with two of its previous challenges also concerning
tax breaks and other subsidies which Mexico accused China of unlawfully
providing to its manufacturers.
Mexico and China will now have 60 days for consultations to
reach settlement of the dispute. If unsuccessful, Mexico will then be able to
request the establishment of a WTO dispute panel to consider the case.