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A million jobs are in jeopardy if safeguards are not applied to Chinese clothing

A million jobs are in jeopardy if safeguards are not applied to Chinese clothing

The Government of Dina Boluarte will decide in the next few hours whether to apply this measure, endorsed by the WTO in favor of the local industry, to balance the market in the face of saturation of Asian garments that enter and are sold at lower prices.

Since the start of the pandemic, clothing imported from China and Bangladesh has not stopped entering and dominating the market, despite the coronavirus restrictions, to the point that Asian garments represented 9 out of 10 units sold in Gamarra, according to the Society National Institute of Industries (SNI).

And, during 2022, imports of Chinese clothing totaled US$573 million, 24.2% more than what was registered in the bicentennial; with a variation of 11.1% in total production since 2019. The opposite happens with the local industry, where there is a contraction of 19.6% in the manufacture of garments compared to the pre-pandemic year.

In this sense, Indecopi sent a report months ago in which they would recommend applying safeguards to garments imported from China, since they represent a threat to Peruvian production, and it is in the hands of the Multisectoral Commission of the Executive Power — made up of the Ministry of Economy and Finance (MEF), Production (Produce) and Foreign Trade and Tourism (Mincetur) — make a final decision.

What is a safeguard?

According to World Trade Organization (WTO), the safeguard makes it possible to put an end to unfair competition when it is verified that a certain imported product threatens the production of a local industry; Therefore, tariffs should be raised or restrictions applied to the entry of their merchandise.

Juan Carlos Mathews, former Vice Minister of Mype and Industry, comments to The Republic that the Commission of the regime of Dina Boluarte It must show that there has been an explosive growth in Asian clothing imports and the damage to Peruvian production.

In his opinion, the technical criteria of the WTO must be respected and “not applied for the sake of it”, since it is more than likely that China will apply the same with other products such as food and minerals that we export to them.

And, regarding the rate —currently 11%, although it should be 30%, according to Gamarra’s mypes— it must be fair and correct and be adjusted once a certain time has passed.

Mypes await political will

Both the governments of Francisco Sagasti and Pedro Castillo had the opportunity to protect national mypes against Chinese clothing, but they did not apply the safeguards despite recommendations from Indecopi.

“It is false that the safeguards are dangerous, as Minister Alex Contreras (MEF) said. Fair trade will be guaranteed. We ask Dina Boluarte to apply it because there are not even policies for industrialization or cheap financing to compete against prices Chinese,” Valeria Mezarina, director of the Peruvian Association of Garment Manufacturers (Apic-Gamarra), told this newspaper.

Mezarina recalls that there are a million jobs in the textile clothing chain nationwide, spread over nearly 100,000 mypes, which are in danger of not protecting the local industry.

“For example, a jean costs us 25 soles to produce it, while one brought from China enters an average of two dollars. The government does not meet with the mypes of Gamarra, but with the members of Confiep. But to collect taxes from us they are There is a lack of commercial and customs intelligence work,” he concluded.

Source: Larepublica

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