Published
Nov 8, 2012
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Mexico calls in the WTO on Chinese subsidies

Published
Nov 8, 2012

A few weeks ago, Mexico filed a complaint with the WTO, citing hidden subsidies granted by China to its textile and apparel industry. Now the complaint just got some real momentum with the United States, European Union and Japan supporting Mexico. The three markets have submitted similar complaints in the past.

Mexico essentially wants the WTO to recognize the subsidies China grants to its textile industry in the form of tax exemptions or reductions in costs for goods and services such as electricity or raw materials.

The Mexican government claims that such policies are detrimental to the Mexican textile industry. In October, they invited China to discuss the issue before the WTO, a precondition for involving a dispute settlement panel.

The meeting is scheduled to take place in the third week of November in Geneva. If talks fail, the next step is the establishment of a panel to settle the conflict, at which point Mexico would be able to call in the support of the United States and the European Union. The U.S. National Council of Textile Organizations had already made known its support in Mexico last month.

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