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Mexico challenges Chinese textile
GENEVA: Mexico has accused China of breaking World Trade Organization rules giving tax breaks and other favorable deals to its clothing and textile businesses,[link widoczny dla zalogowanych], the worldwide trade body said on Monday.
Mexico filed a complaint with the WTO saying Beijing was effectively subsidising Chinese companies in those sectors by exempting them from income tax,[link widoczny dla zalogowanych], value-added taxes and municipal taxes,[link widoczny dla zalogowanych], the organisation said in a statement.
Other Chinese support that Mexico said broke WTO regulations included cash payments from government agencies and discounts on loans, land rights and electricity prices.
It was Mexico's fourth WTO complaint against China, a competitor in several sectors including clothing and textiles.
China's utilization of subsidies and its failure to reveal them to the WTO happen to be the topic of strong criticism, especially from the United States.
The brief WTO statement announcing the most recent dispute didn't provide details about how big the alleged Chinese support or its effect on Mexico's trade,[link widoczny dla zalogowanych].
Trade diplomats were not immediately available to discuss the case in the WTO's headquarters in Geneva.
Mexico's textile (CANAINTEX) and clothing industry (CANAIVE) associations,[link widoczny dla zalogowanych], inside a joint statement, called Mexico's official complaint "a highly important move."
"The information on subsidies in China, which violate WTO regulations, give producers from that country an unfair advantage, distort international markets and seriously damage Mexican industry," they said.
Under WTO rules,[link widoczny dla zalogowanych], China has 60 days to solve the dispute by explaining its actions or changing its behavior. If no deal is reached,[link widoczny dla zalogowanych], Mexico could ask the WTO to rule on the case.
In December 2011, Mexico and China signed off on a series a trade agreements that sought to safeguard Latin America's second largest economy from cheap Chinese imports.
The treaty - negotiated over a period of seven years - formed part of China's conditions for entering the WTO,[link widoczny dla zalogowanych].
Under the agreement,[link widoczny dla zalogowanych], Mexico placed fixed tariffs of up to 1000 percent on products including textiles, shoes and toys, all susceptible to being undercut by cheaper Chinese imports. The tariffs gradually decreased to zero by December 2011.
In January 2009, Mexico challenged grants, loans and incentives that Beijing offered Chinese companies. The United States and Guatemala filed identical cases against China at that time, but none progressed towards the litigation stage.
In January this season,[link widoczny dla zalogowanych], Mexico, with the Eu and also the United States, won a WTO case against China's restrictions on exports of raw materials.
Recently the United States launched a WTO complaint against Chinese car exports. China hit back with its own suit, saying US duties targeting export-promoting subsidies themselves broke WTO rules.
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