Clothing workers have hailed an understanding reached between South Africa and China on textile imports as a chance to rebuild the local industry.
About 63 000 jobs have been lost in local fashion manufacturing in the past three-and-a-half years, largely because of cheap imports from China, the South African Clothing and Textile Workers’ Union (Sactwu) said on Thursday.
Clothing imports from China rose by 480% since 2002, it said.
A pending agreement on import limitations would provide a window of opportunity for rebuilding the local industry.
”We need to use the space created to ensure we make our factories state-of-the-art and improve training of workers on a scale that will develop South Africa into a world-class producer,” the union said in a media statement.
Little detail was forthcoming on Thursday of the deal struck between the two countries.
Textile-import limitations were included in a memorandum of understanding on promoting trade and economic cooperation initialled by ministers of the two countries on Wednesday.
But South African and Chinese legal procedures have to be completed before a final agreement can be signed, the Department of Trade and Industry said on Thursday.
In the meantime, it declined to make available the text of the textile pact.
”Sections of the agreement have yet to be finalised,” said spokesperson Henriette van der Merwe.
A departmental statement said a ”bilateral solution” identified by the two countries included import limitations on 31 product categories until the end of 2008. ”Further details will be made available upon entry into force,” it said.
Sactwu said the processes required for the agreement to come into effect should be concluded in the next two weeks. ”The agreement is expected to set quantitative targets on specified clothing and textile products and the final text and details are in the process of being finalised.”
Together with an active ”buy local” campaign and steps to boost competitiveness, an agreement with China could help create more than 60 000 new jobs in the industry, the union said.
Visiting Chinese Premier Wen Jiabao expressed on Wednesday his country’s willingness to restrict textile exports to South Africa.
He said China would not seek to take over the market share of other countries by simply enlarging its textile production. It would continue to honour World Trade Organisation rules while doing its best to help affected countries enhance their own capacity in textile production.
The Democratic Alliance on Thursday criticised what it described as the inappropriateness of China’s pledges, a lack of specifics and the fact that no formalised agreement seemed to be forthcoming.
China appears to have ranked the fate of South Africa’s industries much lower than its own energy needs, it said — referring to planned cooperation between the two countries on nuclear power-generating technology.
Blanket protectionism is not the answer, the DA’s Pierre Rabie said in a statement.
”However, if smaller, more vulnerable economies such as our own are to trade with such influential and swiftly strengthening economies to our own fair benefit, then there are certain adjustment costs that would have to be offset by initial periods of support and formalised restraint with respect to selected industries.”
On Thursday morning, Wen said China would pursue ”win-win economic cooperation” with Africa, including the waiver of import tariffs for some products.
China takes concerns about the textile trade deficit very seriously, and is ”working hard” on the matter, he told delegates to a China-South Africa business cooperation forum in Cape Town.
Deputy President Phumzile Mlambo-Ngcuka welcomed the understanding reached on textile trade, describing it as a ”unique” deal proving that China is ”willing to walk the extra mile”.
”We hope through our cooperation we can save some of the jobs and part of the industry.”
At the same event, Minister of Trade and Industry Mandisi Mpahlwa hailed China’s willingness to ”forge an agreement with us to assist our struggling clothing and textiles sector”.
Wen said China will seek to promote trade with Africa, increase aid and help ease the continent’s debt burden. It will seek to build a new type of long-term, strategic partnership with Africa, based on respect for the social systems and development strategies pursued by African countries.
The Chinese government will encourage business investment in Africa and boost energy and mining imports from South Africa.
Mlambo-Ngcuka highlighted nuclear energy, fuel technology and mineral beneficiation as areas warranting closer cooperation between the two countries.
She described South Africa as an affordable energy-producing country and a ”favourite destination for investment that is energy intensive”.
China’s Minister of Commerce, Bo Xilai, said representatives of 75 of the 79 companies that accompanied Wen on his two-day South African visit have identified ”definite cooperation interests”. — Sapa