Mercosur seeks to avoid an "invasion" of cheap textiles from the European Union

The Mercosur governments have negotiated with their counterparts in the European Union a mechanism to avoid an "invasion" cheap clothes from the Old Continent, something that had caused concern among local manufacturers in this sector. The system will include a rule of origin: to have a European label, imported footwear must be 70% manufactured in the region. In this way, Asian inputs will be less exposed. low cost cheap these products.

Textile industry officials have received with some concern the news of the free trade agreement signed between Mercosur and the European Union. The alarms were triggered among the clothing and footwear business leaders, mainly because they imagined that the treaty would open the door to the entry of products bearing the seal of cheap raw material imported from Asia, which would be detrimental to local production.

To avoid such practices, the terms and conditions of the agreement signed between the trading blocks will include, according to the first official published documents and according to commercial sources consulted by TN.com.ar, with specific clauses for the textile sector.

One of them concerns a rule of origin. That is, what characteristics must products coming from the European Union bring to bear the euro area "label" of identification? Below the 35 euros, a pair of shoes, for example, should be "entirely made in the region, while above this value, imports of an additional area are allowed, "reads in the summary of the agreement that the national government has distributed to the men of the country. business last Thursday, when he cited them in the Quinta de Olivos.

According to the President of the Shoe Chamber, Horacio Moschetto, "this type of measure has changed the landscape of the sector before the conclusion of an agreement with the European Union". "The negotiated conditions were better than expected before the signing of the agreement," he said. TN.com.ar.

This "threshold" of 35 euros aims to avoid what is called in international trade dumpingthat is, the mbad sale of a product below its "normal" price. If a shoe has a manufacturing cost lower than this price, the 70% of the content should be regionalsaid Moschetto, beyond what the official letter said was "entirely" made in the EU.

In any case, this floor of 35 euros is only the price of production, so it will be practically higher. For Martin Rappallini, president of the Industrial Union of the Province of Buenos Aires (UIPBA), "in addition to the cost of manufacturing, we must add taxes and transportation." "With this condition, I do not think that the Mercosur shoes of the European label less than 70 euros, which constitutes a price advantageous for the local article ", risked the person in charge, consulted by this means.

The national government opened sectoral meetings at the end of last week with which it will try to specify, point by point, what the consequences of the agreement with the European Union for each case.

According to the agreement signed, 100% of the region's industrial exports will enter the EU without paying import duties, while 90% of what happens to Europe will be exempted from these duties. taxes. "In the case of Mercosur, some sensitive sectors such as footwear, furniture and vehicles Total liberalization (tariffs) at 15 years and most auto parts in 15 or 10 years, depending on their degree of sensitivity, "explained the government in this first document published a few days after the signing of the treaty.

"Each value chain is going to have its original rule differently, metalworking or automobiles are not identical to shoes, which is a very sensitive area in terms of certificate of origin." higher quality) are imported cheaply from China, the rest is made in Italy and wants to enter as a European product, "said CAME CEO Pedro Cascales.