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THE
Mexican government has announced a set of
protectionist measures aimed at combatting
"unfair trade practices" affecting
the textile and apparel sector.
The
measures, including soft loans for equipment
upgrades and more customs hoops for importers
and a new delay of scheduled tariff reductions.
The
World Trade Organisation (WTO) condemned
similar, but more severe measures, introduced
by Argentina on foreign companies, after
protests were lodged by European Union,
Japan and the US.
The
WTO's Appellate Body declared Argentina's
measures illegal and told it to no longer
force foreign firms to limit their imports,
offset the value of imports with equivalent
exports, invest in the country and keep
their profits there, or use certain amount
of Argentine content in their products.
The
body also confirmed that Argentina should
not require firms to secure approval for
their imports using the procedure known
as the Advanced Sworn Import Declaration.
Mexico's
aim is to enhance productivity and competitiveness
of domestic manufacturers in the face of
mounting foreign competition, said the press
from the Ministry of Finance and Public
Credit (Secretaria de Hacienda y Credito
Piblico).
The
ministry statement indicates that this action
includes six separate measures involving
import duties, importer registration, automatic
alerts, enhanced surveillance and minimum
estimated prices.
In
addition, Mexico will offer soft loans to
allow domestic textile and apparel producers
to modernise their infrastructure and increase
their exports to foreign markets, the press
release said.
Importers
of textiles and apparel products of HS Chapters
50 through 63 will be required to be listed
on a sector-specific registry. This requirement
is already in place for certain other sectors,
including footwear.
As
it has done with footwear and steel, the
Mexican government will establish an automatic
alert system for textile and apparel imports
that will ostensibly allow customs officials
to verify imported goods in advance.
Mexico’s
Tax Administration Service (Servicio de
Administracion Tributaria, or SAT) will
put in place a permanent system of controls
for importers of "undervalued"
goods and their clients.
Mexico
will again postpone the import duty reduction
that was expected to be implemented at the
beginning of next year on 73 apparel items
and seven textile made-ups.
Originally
scheduled to in January 2013, the duty reduction
from 25 to 20 per cent has been twice postponed
for one-year periods and will now be delayed
until 2018.
Minimum
estimated prices will be set for raw materials
and finished goods.
Tariff
breakouts for textiles and apparel will
be expanded from the eight-digit to the
10-digit level (it is not clear at this
point whether this action will be limited
to sensitive textile and apparel items or
cover all products).
Mexico
will implement a new financing mechanism
with total available credit of MXN450 million
(US$34.4 million) over the next 12 months
to enable the textile and apparel sector
(especially SMEs) to upgrade machinery and
equipment, pursue innovative strategies
and develop new products.
Mexico’s
National Foreign Trade Bank (Bancomext)
will enhance financing opportunities for
the textile and apparel sector through a
comprehensive programme that will include
direct credit for companies that are currently
exporting or are seeking to export their
products. It will offer international factoring
and provide letters of credit for import
and export transactions carried out by SMEs.
The
Service Agency for the Commercialisation
and Development of Agricultural Markets
(Aserca) will support the purchase of cotton
from domestic growers by textile manufacturers.
Mexican
authorities have also published a supplementary
resolution setting effective from February
certain reference prices for a range of
textile and apparel products. These prices
will be employed only as a reference or
guideline and may not be used to determine
the customs value of goods.
Importers
who declare a customs value for their goods
that is below the established reference
price will be required to append to the
import declaration proof of the deposit
or security issued by the credit institution
or surety authorised to operate customs
escrow accounts.
The
deposit or security must cover the difference
between the declared and estimated duties
and antidumping measures, whenever applicable.
Those
who pay taxes in Mexico in accordance with
the provisions of Title II or Title IV,
Chapter II of the Income Tax Law and are
current with their tax obligations may seek
a global security. This covers imports made
over a period of six months as long as the
average price of the goods declared during
that period is no more than 30 per cent
below the estimated price for such goods
at the time of importation.
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