Mypes demand that Chinese clothing pay more tariffs

“Dina Boluarte He said that we are the heart of the economic recovery, but he has not complied. The engine of the Peruvian economy has been hit,” says Susana Saldaña, president of the Gamarra Peru Association, with indignation, after learning that the government will not apply safeguards to clothing imported from China.

According to Indecopi, despite demonstrating that Chinese clothing has a greater presence and enters at lower prices, they did not recommend the execution of this measure endorsed by the World Trade Organization (WTO).

Technicality put brake

The Multisectoral Commission of the Executive Power —made up of the Ministries of Economy and Finance (MEF), Production (Produce) and Foreign Trade and Tourism (Mincetur)— did not see it necessary to establish safeguards, with which the tariffs on Chinese clothing would rise —which currently enter with a rate of 11%, one of the lowest in the region— since the Commission on Dumping, Subsidies and Elimination of Non-Tariff Trade Barriers of the Indecopi was unable to meet the technical criteria in these instances: measure 50% of the companies that make up the national industry.

Saldaña questions this point, given that a year ago Indecopi did recommend applying the safeguards temporarily; However, now they have changed the methodology to “verify that the damage cannot be pointed out” that Asian garments generate to the national industry.

And it is that he indecopi it only surveyed 649 companies in the textile-apparel sector, which should reflect the reality of more than 33,000 businesses in the sector, but in practice they are far from showing the obstacles that govern the sector. In addition, it took data with a cutoff to the first half of 2021, a process marked by reactivation.

The numbers say otherwise

In the first half of the bicentennial, the Peruvian industry produced 200,688 garments, while 260,129 imported units entered; Although it is 30.4% less than what was seen in 2020, an advantage persists over the universe of local clothing as a result of the pandemic and the eventual stoppage of economic activities.

During the April 2022 report —when it was recommended to apply safeguards—, the gap was much greater: 260,129 garments imported saturated the market compared to 65,641 produced by national enterprises. To such an extent that from the National Society of Industries (SNI) they warned that of 10 garments sold here, nine belonged to Asian capitals.

“Indecopi drew two preliminary studies that gave approval to execute the safeguards and defend the national industry and put a stop to these garments that come from China and Bangladesh with prices from one to six dollars. You cannot compete like this with the national industry,” the then president of Indecopi, Julián Palacín, told a local media outlet, who also assured that the State did not want to help them with the measurement of the damage to local production.

According to palacin, Meetings were held with ex-heads of Produce and Mincetur to “make a pig” and hire INEI or Ipsos and carry out a faithful sampling, but there was never a real agreement between these actors and the authorities to specify them.

Not satisfied with the period evaluated by Indecopi and the Government, The SNI clarified that in 2022 441.900 million imported garments entered the country, And compared to what has been registered since 2016, the universe of Chinese clothing circulating in our market doubled (see infographic).

The SNI details that as of November 2022, considering only the main products manufactured in Peru, a universe of approximately seven million units was reached. This figure is far from the import data.

Jesús Salazar Nishi, president of the SNI, maintains that these data reflect that there is a problem to be addressed so as not to sink the mypes further, and he is surprised that the Government annuls an investigation based on mere technical criteria.

Salazar recalled that 95% of the clothing purchased in Peru is imported, and these enter US$2.6 per unit, on average, in a period in which the raw materials paid by national mypes became more expensive by up to 67% — in the production of polo shirts and pants, for example — since the year before the coronavirus. In underwear, the variation is 1.6%.

Both the textile producers of gamarra —represented by groups from all over the country— such as the SNI urged the Boluarte regime to initiate a new investigation and update the study figures to validate not only the damage caused by Asian garments, but also to make it clear that they are not acting to benefit only large importing companies.

Saldaña clarifies that this claim should not be understood as a “tantrum” to receive a gift, Rather, it seeks healthy competition without predatory prices that aggravate the reactivation of mypes in the textile and clothing sector, which cover 30% of the Peruvian business mass.

Measures for the industry announced this week

He MEF announced that it will present this week financing and structural measures that will have a long-term impact on the performance of the textile and clothing sector, after dialogue with the microenterprise unions.

It is worth remembering that before the decision of the Multisectoral Commission of the Executive was known, the head of the MEF advanced his opinion and assured that the safeguards could be dangerous for mypes, since China would play the same game against us and would harm exports of other items. .

Criterion denied by specialists consulted by this means because this measure is feasible as long as the technical criteria of the WTO.

figures

1 million jobs are at risk due to the non-application of safeguards.

95% of the clothes bought in Peru are imported, recalls the SNI.

Asian garments dominate the local market