Production value of the clothing industry fell 8% due to illegality

Mexico City. Clothing smuggling, the importation of clothing below its cost – known as undervaluation -, the emergence of digital platforms that introduce textile products without paying taxes, among other factors, have reduced the value of the production of clothing manufacturers in Mexico, as it fell 8 percent in the second quarter of 2024 compared to the same period last year, indicated the National Chamber of the Clothing Industry (Canaive).

José Pablo Maauad Pontón, president of the business organization, pointed out in a conference that the value of the production of ready-made products stood at 53 billion pesos in April-June of this year, an amount that observed a “very important, very worrying drop.” , although this was partially smoothed by the growth in the sector’s exports.

The industrial leader explained that the lower dynamism observed in the reference period is explained by the effect caused by the appearance of platforms that sell clothing manufactured in Asian countries at very low prices because they do not pay taxes and take advantage of import benefits through parcel delivery. but also due to the importation of clothing at low costs that supposedly should be exported again, smuggling, among other illegal practices.

Maauad Pontón commented that the organization will seek to propose to the government of President Claudia Sheibaum Pardo that, as market regulator, an even floor be built so that all economic actors involved in the sector pay the taxes corresponding to imports.

He noted that in the case of platforms that sell clothing and other products from Asia by parcel without paying import taxes, it is not necessary for more compensatory fees to be applied.

“The only thing that is needed is to comply with what is already established: the payment of the General Import Tax to the corresponding fraction and the payment of the value added tax and compliance with the regulations. There is no need for any additional mechanism such as a compensatory quota or tariff barrier, simply by complying with the established regulations,” he said.

He considered that customs must improve their efficiency because illegal imports happen there. “We need more technology in our customs, automated risk identification systems,” he said.

He noted that Canaive participates with customs training so that personnel can identify these things, but it must be complemented with technological tools that allow for much greater control of international trade from the origin of the merchandise.