Thanks to the Free Trade Agreement with China, a kilo of shirts or t-shirts made with acrylic fabric is sold in Peru at a wholesale price of $5 or less, about three times cheaper than similar Peruvian items, which are mostly made of cotton.
“It’s impossible to compete,” said Manuel Ito with the Peruvian Industrial Association of Clothing Manufacturers.
Some 3,000 business people in the apparel business are on the verge of bankruptcy, Ito said.
Merchants selling Chinese apparel however are smiling.
“We offer more designs, the quality is very good and prices are lower,” said Graciela Noriega, a vendor at one Gamarra’s 150 clothing retail stores.
David Chen, a Chinese businessman who arrived in Peru ten years ago looking for work, recently opened his own operation to import garments from Asia.
“Business is going well because the Peruvian providers do not have enough products or accessories to offer,” Chen said. “They can’t compete with the prices of China or India.”
Alva said that his group “wants to defend Peruvian industry, but many merchants have abandoned the battle and have their items prepared in China.”
Between 2005 and 2013 Chinese imports replaced some 237 million Gamarra items, according to figures from Peru’s Customs office.
Carlos Puris, a former Gamarra tailor, said that it was a big mistake to sign the free trade agreement with China.
“They make apparel like us and now were ruined,” he said. “I’ve been told of Chinese factory ships that anchor off (the port of ) Callao and assemble items there with Peruvian cotton.”
“We can trade with China,” said Fabian Cuya Caritas, who has worked in Gamarra for 40 years, “but without them driving us into bankruptcy.”
