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Mexico textile sector worries over TPP and Trump wall

Despite eyeing 4 per cent growth this year, Mexico's textile sector faces looming threats including the Trans-Pacific Partnership (TPP) and Donald Trump's proposal to barricade its US border – which some executives estimate could trigger $2 billion in annual trade losses.

According to Juan Alfonso Ayub, President of main textiles trade lobby Canaintex, a 6 per cent to 7 per cent jump in export value will drive this year's hike and domestic demand is also set to increase as a sagging peso fuels import substitution. Ayub notes the TPP is a rising red flag at a time when Mexico continues to lose market share to Vietnam and other formidable Asian rivals. We are very worried, Vietnam is an evident risk to our country and enjoys big government subsidies, said Ayub. Fifteen years ago, Mexico was the number one or two suppliers to the US. Now they are the fifth or sixth.

As a part of the game-changing potential of the TPP, Latin America's second-largest economy negotiated a 16-year, 25 per cent average duty phase-out for 80 key apparel and textile products. Yet Ayub says that's insufficient to protect suppliers from Vietnamese competition and the lingering risk that China will use its neighbour to triangulate exports.