Peru's clothing exports to Mexico will double in 2012

The Peru-Mexico free trade agreement that will take effect will double Peru’s clothing exports to Mexico, Peru’s National Council of Industrial Society Textiles said.

Textile Commission's Henry. Fulcan said that this free trade agreement will benefit Peru's entire textile value chain, from agriculture to the chemical industry to fabrics and clothing.

In 2010, Peru exported $18 million worth of textiles and clothing to Mexico. Last year's export revenue reached $26 million, a year-on-year increase of 44%.

The free trade agreement between Peru and Mexico is expected to double Peru’s exports to Mexico this year, as it is an important market for Peru’s textile and apparel exporters, including cotton, wool, man-made fibers and knitwear items.

Prior to the free trade agreement, Peru’s textile projects experienced an average tariff of 15% on Mexico’s exports and 30% on garments.

At present, Peru's textile and apparel items can be exported to Mexico tax-free, but 66 categories are considered to be sensitive items, the tariffs of these 66 products will be gradually canceled within 5 years, Mr. Fulcan said.

Mr. Fulcan revealed that the free trade agreement between the two countries has provisions for the origin of the regulations that prohibit the use of yarns imported from India and other countries in the production of fabrics, so that they can qualify for duty-free export to Mexico. It is important that only those products made with Peruvian yarns qualify for duty-free content to be included in the free trade agreement between the two countries because Peru imports a large amount of yarn from India.

This free trade agreement allows Peru's clothing manufacturers to use certain kinds of elastic and other yarns from the United States and Brazil for clothing production in order to obtain a tax-free mechanism.

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