MEXICO CITY, Oct 17 (Reuters) - Mexico is hoping to recruit allies in a trade dispute in which it accuses China of breaking international rules by giving tax breaks and subsidies to its textile businesses, a top Mexican trade official said on Wednesday.
Mexico argues that Beijing subsidizes Chinese companies in its textiles and clothing sector by exempting them from income taxes, value-added taxes and municipal taxes.
“It’s possible that at any time during the next 30 days, or 60 days, other countries could join us,” Francisco de Rosenzweig, Mexico’s undersecretary for foreign trade, told Reuters in an interview.
Additional allies in the dispute would bring more pressure to bear on China.
De Rosenzweig said Mexico was in consultations with various countries, but he declined to name them.
Mexico formally requested consultations with China on Monday in the World Trade Organization (WTO), and the Asian giant has 60 days to resolve the matter by explaining its actions or changing its behavior. Without a deal, Mexico could ask the WTO to rule on the dispute, its fourth WTO complaint against China.
De Rosenzweig pointed to the massive textile trade deficit that Mexico, Latin America’s second largest economy, faces with China. He said Chinese textile exports to Mexico last year totaled $1.07 billion while Mexico’s exports to China were worth just $88 million.
All told, Mexico imported more than $52 billion worth of Chinese goods last year and exported only about $6 billion of its own products to China, its third-biggest single export market.