Mexico accuses China of breaking world trade rules
Mexico issued its fourth World Trade Organization complaint against China, claiming China gives itself tax breaks and other deals. Mexico and China are major competitors in clothing and textiles.
A worker gathers material at Langsha Socks Group production plant in 2006. Mexico, who competes with china in textile and clothing production, filed a complaint against China with the World Trade Organization.
Eugene Hoshiko/AP/File
Geneva
聽has accused聽聽of breaking聽聽rules by giving tax breaks and other favorable deals to its own clothing and textile businesses, the global trade body said on Monday.
聽filed a complaint with the WTO saying聽聽was effectively subsidizing Chinese companies in those sectors by exempting them from income taxes, value-added taxes and municipal taxes, the organization said in a statement.
Other Chinese support that聽聽said broke WTO regulations included cash payments from government agencies and discounts on loans, land rights and electricity prices.
It was聽's fourth WTO complaint against聽, a competitor in many sectors including clothing and textiles.
's use of subsidies and its failure to disclose them to the WTO have been the subject of strong criticism, especially from the聽.
The brief WTO statement announcing the latest dispute did not provide details about the size of the alleged Chinese support or its impact on聽's trade.
Trade diplomats were not immediately available to comment on the case at the聽聽in Geneva.
's textile (CANAINTEX) and clothing industry (CANAIVE) associations, in a joint statement, called聽's official complaint "a highly important move."
"The existence of subsidies in聽, which violate WTO regulations, give producers from that country an unfair advantage, distort international markets and seriously damage Mexican industry," they said.
Under WTO rules,聽聽has 60 days to resolve the dispute by explaining its actions or changing its behavior. If no deal is reached,聽聽could ask the WTO to rule on the case.
In December 2011,聽听补苍诲听聽signed off on a series a trade agreements that sought to protect聽's second largest economy from cheap Chinese imports.
The treaty - negotiated over a period of seven years - formed part of聽's conditions for entering the WTO.
Under terms of the agreement,聽聽placed fixed tariffs of up to 1000 percent on products including textiles, shoes and toys, all vulnerable to being undercut by cheaper Chinese imports. The tariffs gradually decreased to zero by December 2011.
In January 2009,聽聽challenged grants, loans and incentives that聽聽offered Chinese companies. The United States and聽聽filed identical cases against聽聽at the time, but none progressed to the litigation stage.
In January this year,聽, together with the European Union and the聽, won a WTO case against's restrictions on exports of raw materials.
Last month the聽聽launched a WTO complaint against Chinese car exports.聽聽hit back with its own suit, saying U.S. duties targeting export-promoting subsidies themselves broke WTO rules.