Latin America fears flood of Chinese imports

SANTIAGO, Chile, June 21 (Reuters) Latin Americans eyeing struggling WTO talks hope eagerness to reach a deal by the end of the month won't see industrial tariff cuts so deep they allow China to flood their markets with cheap goods.

The World Trade Organization, or WTO, is struggling after four years of talks to meet a key deadline and reach an agreement on farm and industrial goods by the end of the month.

The debate rages over how much developing nations must cut tariffs on industrial goods in exchange for more access for their farm goods in rich countries.

But Latin America's top manufacturing countries, Brazil and Mexico, say that it is China, not developed nations, whom they fear most under proposed WTO cuts in tariffs on industrial goods.

''Brazil won't accept becoming China's dressing room,'' said Fernando Pimentel, head of the Brazilian Textile Association, in reference to rising imports of Chinese clothes. ''We are highly competitive but they benefit from an artificially weak currency.'' Observers say the so-called Doha round of global free trade negotiations risk collapse without an agreement by the end of June.

Brazil, with South America's largest manufacturing sector, has already been hard hit by cheap Chinese imports in recent years, and sales of Chinese textiles, shoes, electronics and toys have skyrocketed.

Industry leaders said they would oppose any attempts by their government to make further concessions in the Doha round that would lead to industry tariff reductions.

Both the European Union and the United States are demanding that leading developing countries make more concessions on industrial tariffs.

Alejandro Mayoral, an economist and expert in international trade in Argentina, said concerns in his country were less about China and more about lack of access for agricultural products to European and U.S. markets. But he said Argentine niche markets, such as sports shoes, could be hit by Chinese competition.

Even in Chile, which has embraced commerce with Asia and signed a free trade agreement with China, some legislators are concerned about small producers' ability to compete against the Chinese.

''On the urban level, I'm concerned about the chances of countless small and medium businesses, or family or artisan workshops ... that could be subjected to mortal competition,'' Alberto Cardemil, an independent legislator, told Reuters.

Luis Quiros, owner of a factory making men's dress shoes in the Mexican city of Leon, said unfair government subsidies, more flexible labor laws and an increasingly well-trained work force in China are making it difficult for his company to compete for US market share.

REUTERS SY BD1003