Colombian clothing manufacturers are facing challenges due to unfair trade practices associated with Chinese low-cost shopping apps like Temu and Shein. According to reports from Semana, these platforms are exploiting the mini-miss clause of Colombia’s Free Trade Agreement (FTA) with the United States. This situation has led to an influx of cheap, low-quality products from China, which are replacing the higher-quality goods produced locally.
Many Colombian customers have noted a significant disparity between what they expect to receive and what is actually delivered from Temu, primarily due to the construction of low-cost, low-quality offerings. Nonetheless, the magazine highlights that the popularity of these Chinese platforms is on the rise, especially among younger demographics and those aged between 40 and 60, particularly in clothing and accessories.
The report also points out that Colombia is not exempt from the global trend of consumerism, where consumers often buy unnecessary items propelled by low prices. However, these platforms have been criticized worldwide for their low product quality, poor working conditions, and the unfair tariff advantages that enable such pricing.
In response to these issues, Colombian President Gustavo Petro announced in October a 10% tariff on imported yarn and textile products, suggesting it would support the local clothing industry by lowering costs. However, trade entrepreneurs, cotton farmers, and garment sector unions have rejected this measure, arguing that it wouldn’t resolve the issue, but rather threaten thousands of jobs. They believe that platforms like Temu and Shein are the core problem.
Luis Carmona, president of a union representing Colombian textile workers, expressed his view that it’s nearly impossible to combat the labor conditions and “dumping practices” used by these Chinese platforms, which sell items at prices below their production costs. He insists that the only real solution would be to ensure that these platforms pay all applicable taxes on their purchases.
Carmona pointed out that a significant advantage for Temu and Shein is their minimal obligations regarding low-value imports. This loophole was eliminated in the U.S. but remains in Colombia. According to Semana, the regulations of the FTA between Colombia and the U.S. are being improperly utilized by these companies. Shipments originating from the U.S. aren’t taxed in the same way as those from China, leading to significant disparities.
María Fernanda Quiñones, president of the Colombian Chamber of Electronics and Commerce, welcomed international digital commerce platforms but stressed the need for fair competition. She explained that the goodwill for these platforms is overshadowed by a lack of competitive parity stemming from the interpretation of the FTA. Currently, smaller shipments valued at up to $200 do not incur customs or value-added taxes, which disadvantages local producers.
She believes a resolution could come from the Department of Commerce without needing an official bill. Quiñones also noted that the U.S. has addressed similar loopholes, making the situation in Colombia particularly damaging for local manufacturers and entrepreneurs in the digital space.
Other South American nations have also moved to implement stricter tax measures on local shipping laws that are being taken advantage of by Temu and Shein. For instance, in June, Ecuador introduced a $20 tariff on packages sent through special courier services that are exempt from foreign trade duties. These actions were prompted by local retailers, who reported that the influx of merchandise from Temu had severely affected local distribution networks.
