Government appears to have done nothing to respond to the threats facing South Africa’s textile sector, Democratic Alliance leader Tony Leon said in a statement on Sunday to mark Worker’s Day.
Leon said government appeared to lack the political will to help this industry to adjust to the harsh new realities of international trade.
Over the past decade the textile sector had shed about 150 000 formal jobs and within the first three months of 2005, an additional 4 000 jobs had been lost, Leon said.
China’s productivity and pricing levels had rendered huge sections of South Africa’s industry uncompetitive.
”I returned earlier this week from China where I raised the situation of our textile industry with the top political and economic figures with whom the DA met,” Leon said.
”I have to be frank in indicating that their response is not reassuring.”
However, the Chinese government appeared to be open to dialogue and it was a matter of extreme concern that the South African government had done and said little to bolster and defend the local textile industry.
The European Union and the United States had responded decisively to economic consequences resulting from cheap Chinese imports.
”The South African government, by contrast, has maintained a tomb-like silence.”
Government should impose temporary measures to help the local industry adjust to Chinese competition and protect it against further job losses.
”Government should invoke World Trade Organisation rules that allow it to cap growth in Chinese textile imports to 7.5% per year compared to the previous year’s import volume,” Leon said.
In addition, a 30% import duty on cotton imported from outside the Southern African Development Community also hurt the productivity of the textile sector and should be reduced.
”Government should level the playing field and no longer restrict South African firms to buying cotton from SADC whose cotton is currently far more expensive than cotton from the northern hemisphere, and is often not of as high a quality.”
Government should also create export processing zones (EPZs) in which firms were granted exemptions from certain taxes and labour laws in order to produce cheap goods exclusively for export.
”While we should not, and cannot, throw up a protectionist wall around the industry, there are a range of measures which South Africa should -and could – have undertaken,” said Leon.
”Why has the R3.8 million from the Chinese government not been used? Last year the Chinese government offered our government R3.8 million to help the South African clothing and textile industry adjust to the new competition from Chinese imports.
”This money was meant to be used to help retrain workers to work in new areas, but so far the government has done nothing but sit on its hands.
”In China I raised this issue with several Chinese officials, only to be told that they had no idea why the money had not yet been accepted and spent.”
After numerous warnings about the threat of Chinese imports to South Africa’s textile industry, the Department of Trade and Industry set up a task team in February 2004 to investigate the cause of the industry’s vulnerability to Chinese imports.
”Fourteen months later, the task team has only met three times and has failed to produce a single recommendation addressing the problem.” – Sapa