Mexico Prepares for China Rush

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Mexico Opens Up Its Market.

Mexico’s shoe sector is bracing for a tough 2012 after the country in December implemented long-awaited rules easing imports from China as part of World Trade Organization agreements. Other sectors, like clothing and toys, also expect to be impacted by stronger competition from lower-priced Chinese goods.
The winners? Mexican consumers. Meanwhile, the new rules are also anticipated to reduce unfair practices such as incorrect classifications or sending goods through third countries, experts say.
The result will be another jump in trade between Mexico and China. During the first half of 2011, two-way trade reached $26.6 billion, an increase of 23 percent from the same period last year, according to Mexico’s ministry of economics.
In 2010, total trade between Mexico and China reached $49.8 billion, an increase of 43.5 percent compared to 2009. Of that, imports from China accounted for a whopping 91.6 percent of the total, leaving a Mexican trade deficit with the Asian nation of $41.4 billion ($11.1 billion more than in 2009).
Mexico expects to see a 20 percent increase in imports from China in the short run and up to 100 percent in the long run, according to the Inter-American Dialogue’s Latin America Advisor.
“Mexican producers…have had 10 years to prepare to face Chinese competition and if they are not ready now, it is unlikely that they ever will be,” Rhys Jenkins, professor of development economics at the University of East Anglia, tells the Latin America Advisor.