Thread: Mexicans protest illegal imports!

Would Mexicans call these "undocumented import"?
Funny how Mexico says that cheap labor is good for the U.S. but cheap chinese product is bad for Mexico!



http://retanet.unm.edu/LADB-articles/25319.html

TEXTILE MANUFACTURERS PROTEST GOVERNMENT'S FAILURE TO CONTROL ILLEGAL IMPORTS FROM CHINA
SourceMex
Date: 2003-05-14

--------------------------------------------------------------------------------

Mexican manufacturers of textiles and apparel are up in
arms against what they perceive as a failure by President
Vicente Fox's administration to curb illegal imports of
Chinese products.
According to industry estimates, contraband accounted for
58% of the clothing and apparel sold in Mexico during the past
year.
The illegal imports have had a profoundly negative effect
on the domestic apparel industry, with more than 1,000
clothing-related companies closing their doors during the past
year. The closures have resulted in layoffs of 50,000 to
60,000 workers, said the Camara Nacional de la Industria del
Vestido (CANAINVES).
CANAINVES president Salomon Presburguer Slovick said the
illegal imports, primarily from China, have gained a larger
percentage of the clothing market than the combined domestic
production and legal imports. "Illegal imports amount to
US$9.6 billion in losses for our industry," said Presburguer.
Footwear manufacturers are also pushing for the
government to strengthen restrictions on illegal imports.
According to some estimates, 15% of sneakers and athletic
footwear sold in Mexico are brought to the country illegally
from China.

Textile workers plan nationwide stoppage
Business organizations like the CANAINVES, the
Confederacion de Camaras Industriales (CONCAMIN), and the
Camara Mexicana de la Industria Textil Central, said they are
supporting a plan by 100,000 textile and apparel workers to
call a nationwide stoppage to bring attention to their
situation.
"Workers have a right to fight for their rights," said
CONCAMIN president Leon Halkin Bider. "This is no longer a
fight between employers and employees, but an alliance to
confront the external conditions that are taking away our
competitiveness."
As part of its strategy to bring attention to their
concerns about illegal clothing imports, the Sindicato de la
Industria Textil y de la Confeccion organized protests on
international labor day in front of the Chinese Embassy in
Mexico City, the headquarters of the retailers organization
Asociacion Nacional de Tiendas de Autoservicio y
Departamentales (ANTAD), and the main buildings for the
Secretaria de Economia (SE) and the Secretaria de Hacienda y
Credito Publico (SHCP).
The textile and apparel industry organizations said they
have formed a commission to develop a series of
recommendations to reduce illegal imports from China. The
commission, which will include Fox's top economic and
political adviser Eduardo Sojo, has developed a plan for
local, state and federal agencies to coordinate their
monitoring activities more closely to reduce the flow of
contraband into the country.
Textile manufacturers and some legislators are also
pushing for a resolution in Congress to include contraband
among the activities that constitute "organized crime." This
designation would create stronger penalties for anyone
involved in the smuggling industry, said Deputy Juan Carlos
Saiz, a member of Fox's center-right Partido Accion Nacional
(PAN).
"There are many locations where Chinese products are sold
openly without any fear of reprisals," said Saiz.
Mexican customs officials, responding to the complaints,
said a large share of the Chinese clothing, toys, electronics,
and other products that are sold in the informal economy have
entered the country legally. Still, they acknowledged that
many products are brought in illegally. "We do not have the
personnel to inspect 100% of all the shipments entering the
country," said Jose Guzman Montalvo, director of Mexico's
customs agency.
Zhao Chunjiang, a trade officer at the Chinese Embassy
in Mexico City, said his country has shown some willingness to
look into the complaints of contraband but has not received
cooperation from the Mexican government. "We have requested
data from the SHCP and SE, but have received no response," the
Chinese official told the Mexico City daily newspaper La
Cronica de Hoy.

Mexican-Chinese commercial relations remain rocky
Commercial and economic relations between the two
countries have never been smooth, and in fact have
deteriorated in recent years because of complaints by the
Mexican government that China has offered unfair incentives to
try to lure maquiladora plants away from Mexico (see
SourceMex, 2002-07-17 and 2002-11-13).
The controversy over the past few years, however, has
been Mexico's contention that China provides unfair subsidies
to its exports and also condones triangulation, which involves
the export of its products through a third country. In 1993,
Mexico took some steps to counter the wave of Chinese imports,
imposing stiff anti-dumping tariffs on several products from
that country in 1993 (see SourceMex, 1993-04-21, 1994-09-2.
During grueling negotiations on a bilateral agreement
with China, Mexico reluctantly agreed to phase out these
restrictions by 2008. The agreement, which allowed China to
join the WTO, was completed in 2001 (see SourceMex, 2001-08-19
and 2001-09-19).
Mexican importers remain concerned about the eventual
impact of China's entry to the WTO, which means that some of
the products that now enter Mexico via contraband will become
legal imports in 2008.
"We will be able to retain anti-dumping tariffs beyond
that date if we can prove to the WTO that China is continuing
its unfair trade practices in specific sectors," said Eduardo
Perez Motta, Mexico's ambassador at the WTO.
The footwear industry is concerned that the Chinese
government may pressure Mexico into eliminating barriers for
footwear sooner than expected. This has prompted politicians
in Guanajuato state and other shoe-producing regions to seek
special government's protection. "We have a pledge from
President Fox not to open our borders to Chinese shoes because
we cannot compete against these imports and because the
footwear and leather industry is strategic to our area," said
Ernesto Ayala Torres, mayor of the industrial city of Leon in
Guanajuato state.
Mexico's restrictions, in the meantime, have failed to
slow legal imports of Chinese products. According to the
Consejo Mexicano del Comercio Exterior (COMCE), Mexico's trade
deficit with China widened to US$3.5 billion from US$2.5
billion over a span of just three years.
China has not only expanded its market in Mexico, but has
also displaced Mexican products in the US. According to a
study published by BBVA-Bancomer, the competition with Chinese
imports in the US could greatly reduce the recovery of the
Mexican maquiladora sector. The report recommended that
Mexico use its advantages to better compete against the
Chinese. "Mexico surpasses China in several areas of
competitiveness, including protection of intellectual
property, a more qualified labor force, lower costs of
transportation to the US, and preferential access attained
through the North American Free Trade Agreement (NAFTA)," the
study said.

SARS outbreak in China may be helping Mexico
Some analysts say the outbreak of severe acute
respiratory syndrome (SARS) in China may slow the influx of
legal and illegal merchandise to Mexico and also provide an
opening for Mexico to recover some of the market share it lost
to the US. The outbreak of SARS has caused multiple deaths in
China and other Asian countries and has significantly slowed
economic activity in the region.
"Mexican wholesale buyers, whether they are smugglers or
representatives of the large department stores, have canceled
their trips to China because of the SARS outbreak," said
CANAINVES director-general Raul Garcia Tapia. "Obviously this
is going to affect the flow of merchandise."
Some CANAINVES officials used the news of the outbreak to
recommend that Mexican consumers not buy any clothing that is
manufactured in China. "They say this virus can survive on
any surface for 48 hours," said CANAINVES' Presburguer. "I am
concerned that this assessment may be wrong and that the virus
may mutate and live for a longer period and arrive in a
shipment of clothing from China."
Still, there is no evidence to back up the concerns
raised by CANAINVES. According to US Centers for Disease
Control (CDC), most cases of SARS have been spread through
close person-to-person contact. The CDC, however, did raise
the possibility of other forms of transmission. "It is also
possible that SARS can be spread more broadly through the air
or by other ways that are not currently known," said a CDC
report.
There is other evidence that the SARS outbreak may be
diverting some business from China to Mexico. Officials from
COMCE and the Consejo de Camaras Industriales de Jalisco
(CCIJ) said several businesses that have plants in Asia have
inquired about moving their operations to Jalisco state
because of concerns about the SARS outbreak. "Many US-based
companies with operations in Asia have closed their plants in
the region and are looking for other options," said CCIJ
coordinator Tomas Lopez Miranda.
The outbreak of SARS has also suspended commercial
contacts between Mexican business executives and counterparts
from China and other countries in the region. "If one of our
employees absolutely has to fly to the region, we recommend
emphatically that he not visit areas that have been infected,
that he wash his hands frequently, and that he wear a mask
over his mouth," said Albert Chico, a spokesperson for the
Mexican glass manufacturer Vitro.
Some government officials, including Michoacan Gov.
Lazaro Cardenas Batel, postponed planned trade missions to
Asia because of the SARS outbreak. The governor had planned
to promote the state's largest seaport, named after his
grandfather Lazaro Cardenas, to business interests in Hong
Kong and Singapore. "Even though this trip was important for
Michoacan and the port of Lazaro Cardenas, this was not the
proper time to take this trip," said Cardenas Batel.
(Sources: Associated Press, 04/02/03; Agencia de noticias
Proceso, 04/30/03; CNI en Linea, 05/05/03; Reuters, 05/06/03
La Jornada, 04/22/03, 05/07/03; US Centers for Disease Control
Update, 05/08/03; La Cronica de Hoy, 04/30/03, 05/05-08/03,
05/13/03; Reforma, 04/25/03, 04/29/03, 05/02/03, 05/06-09/03,
05/14/03; Milenio Diario, 04/30/03, 05/02/03, 05/05/03,
05/07/03, 05/14/03; El Universal, 05/06/03, 05/07/03,
05/14/03)

Chinese imports hit economy hard -- in Mexico

http://www.boston.com/business/articles ... in_mexico/



Some blame trade rules, smuggling for loss of jobs
By Marion Lloyd, Globe Correspondent, 11/28/2003

SANTA ANA CHIAUTEMPAN, Mexico -- You can't get much more Mexican than the Virgin of Guadalupe.

Unless, that is, she is made in China.

Like the United States, Mexico has been flooded with cheap Chinese goods since the Asian giant joined the World Trade Organization, or WTO, in 2001.

But the Chinese are not only managing to undersell their Mexican competitors in areas such as toys, clothing, and housewares. They also are producing low-cost versions of traditional Mexican crafts, from brilliantly striped blankets to statues of the Virgin of Guadalupe, the country's patron saint.

In Santa Ana Chiautempan, a textile hub 60 miles northeast of Mexico City, competition from China has cost thousands of jobs over the past three years. The town is one of the country's leading producers of synthetic textiles, as well as a center of traditional woven goods. But those industries are threatened by the growing competition from China, which exported $6.3 billion in goods to Mexico last year -- up from $3.1 billion in 2000 -- according to Mexican government figures. Mexico exported $455 million in goods to China in 2002.

The figures do not include contraband, which Mexican industry leaders estimate accounts for 60 percent of the country's $16 billion domestic clothing industry. Chinese goods, they say, account for the vast majority of the black market.

"The main problem isn't that the Chinese have joined the WTO, but that they smuggle their goods," said Rafael Torre Mendoza, manufacturing director of Grupo Textil Providencia, the largest of the several dozen textile factories in Santa Ana Chiautempan. He blamed the Mexican government for not doing enough to fight contraband, particularly at the US border. He and other business leaders said much of the Chinese goods enter the United States first, where tariffs are far lower. The goods are then illegally retagged as "made in the USA," allowing them to pass into Mexico virtually tax-free under the North American Free Trade Agreement.

"We can compete if the playing field is even. But it's not," said Torre. He estimated 7,000 of the city's 20,000 factory workers had lost their jobs since 2001, while local textile earnings fell as much as 60 percent. Nationwide, he said 80,000 jobs in the textile industry had disappeared since 2000.

In addition, the government estimates 230,000 jobs have been lost in the maquiladora industry during the same period, when 500 of the country's 3,700 assembly plants moved to China to take advantage of cheaper labor and operating costs.

China has many of the competitive advantages that persuaded American manufacturers to move operations south of the border. Chinese workers earn half that of Mexican workers, according to trade specialists. With 800 million people in the work force, half of them poor farmers, the country has a huge reservoir of cheap labor. China also benefits from its proximity to other manufacturing hubs such as South Korea and Japan.

China has one additional advantage: Chinese companies pay one-fourth as much as Mexican firms for electricity, industry officials said.

Mexican industry officials, meanwhile, echo concerns of American critics of free trade, saying China's lax environmental regulations and worker protections allow it to undercut Mexican prices. "It's unfair competition," said Samuel Quiroz, president of the textile chamber in Puebla. "China uses subsidies. They don't really have a market economy at all."

The growing competition from China is also affecting Mexican exports to the United States, which slumped slightly last year, while China's exports to the United States grew 21 percent. If that trend continues, China is poised to overtake Mexico as the United State's second-largest trading partner, after Canada.

The Mexican government has gone from being mildly concerned to panicked in three years. President Vicente Fox, a former Coca-Cola executive who is generally in favor of free trade, urged other Latin American countries this month to work together. China, he told university presidents, "is taking away jobs here in Mexico, in the United States and Canada, in Japan, and certainly in many countries in Latin America."

Chinese officials say they are playing by the same rules as everyone else. "Competition is part of trade, especially in the current context of globalization," said Shi Wei, press secretary at the Chinese Embassy in Mexico City. "It's not fair to blame your country's problems on imports from other countries. That won't resolve the root problems."

Shi downplayed the threat to Mexico, arguing that Mexico exports to China nearly half as much as it imports. He said Mexican estimates -- which put the export-import ratio at 1 to 14 -- unfairly include Chinese imports from third countries, like Taiwan and Singapore. He said only 3.7 percent of all Mexican imports come from China.

Tell that to workers and factory owners in Santa Ana Chiautempan. In the town's markets, blankets made in China reportedly sell for as little as one-third the cost of those manufactured right in town. It takes a trained eye, however, to spot the Chinese product, which the locals say are of lower quality. Often, the most visible difference is the lack of tags on the Chinese goods.

While few admit to selling Chinese wares, the effect of Chinese competition can be felt in the mood of textile workers.

"We are all very nervous about losing our jobs," said Adelina Romano Santizo, 25, who was packaging fleece blankets at Grupo Providencia's main factory. Romano, who makes $220 a month, said she had been asked to scale back her work days at the plant.

The company, which reports losses of 40 percent over the past three years, fired about 200 of its 1,000 workers this year. And it may have to lay off another 150, said Torre, the manufacturing director.

He argued that Mexican companies would have to improve the quality of their products and accept smaller specialty orders to take advantage of Mexico's proximity to the United States.

In the meantime, however, he suggested another strategy.

"We should have a national boycott of Chinese goods," he said. "Otherwise, if we have to keep laying off workers, we will have to start importing Chinese consumers to buy our products."

The scoundrel(s) that allowed China to join the WTO in the first place should not have. All efforts to move China closer to a democracy have failed, in fact, China has moved farther away from democracy. Their slave camps (and don't think for one minute that they don't exist) are putting north American workers out of business. The US and Mexico would be better off not doing business with China. When we do, that's telling them that we approve of their government model.

The illegal imports have had a profoundly negative effect
on the domestic apparel industry, with more than 1,000
clothing-related companies closing their doors during the past
year. The closures have resulted in layoffs of 50,000 to
60,000 workers, said the Camara Nacional de la Industria del
Vestido (CANAINVES).

Ironically, this is probably what some would refer to as "poetic justice." Some of textile plants that are producing the fabrics for Mexico's apparel industry were probably operating in America at one time.

The right people had better wake-up quick before China has monopolized the worlds clothing market. Mexico was able to undercut the U.S. apparel industry by utilizing cheap labor, which forced many clothing manufactures and textiles companies to outsource their operations. Now China is undercutting them by providing even cheaper labor. It's sort of funny when you think about it, but I'm not laughing!