An agreement to limit Chinese clothing and textile imports has brought mixed reaction, with labour in the textile industry welcoming the opportunity to rebuild the industry and the Democratic Alliance (DA) saying it will bring price increases.
The opposition party said it will ask the minister of trade and industry whether concerns of the clothing and textile retail industry were considered, as well as the implications for consumers and employment.
The South African Clothing and Textile Workers’ Union (Sactwu) said on Monday that 55 000 new jobs could be created.
”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,” said general secretary Ebrahim Patel.
”Over the past four years, the local fashion-manufacturing industry has lost approximately 67 000 jobs, largely as a result of a surge of imports from China,” said Patel. ”Over the same period, the five big retailers have recorded R18,1-billion in pre-tax profits. It is now time for retailers to work with the local manufacturing industry to place the country and employment before profits.”
He said the vast volumes of imports from China have had a devastating impact, with factory closures in the poorest parts of the country such as Dimbaza in the Eastern Cape, which have become industrial ghost towns.
”Even the United States, the European Union and Brazil had quotas imposed on Chinese imports, even though they had not yet been as adversely affected by imports as those in South Africa.
”Since 2002, clothing imports from China rose by 480%. At the end of last year, our trade balance with China was R23-billion, meaning that South Africa had a negative trade of R23-billion.”
Opposition
On the other hand, the DA said ”firing off trade restriction like buckshot” could lead to price increases of 20% to 25% as well as stock shortages over the coming festive season, according to industry analysts.
DA trade and industry spokesperson Pierre Rabie suggested a targeted approach that makes assertive use of the more positive options provided by the World Trade Organisation (WTO) framework.
Recommendations include, firstly, obtaining a commitment from China to assist in supporting South Africa’s local textiles and clothing firms through comprehensive adjustment packages. These packages should facilitate restructuring and reorientation of firms to identify and service niche markets successfully, said Rabie.
”This would certainly signify a willingness to encourage the involvement of the Chinese in our economy.”
Secondly, the government should clearly assert its willingness to invoke WTO safeguards against dumping if it is necessary. ”It should also explore the possibility with China of setting a minimum value on items of clothing that may be exported here without restraint.”
Thirdly, together with China, the government should investigate the WTO-sanctioned option of limiting the extent to which China may increase its annual exports to South Africa to no more than 7,5%.
The China-South African agreement follows more than a year’s negotiations and was first initialled in June by visiting Chinese Premier Wen Jiabao and President Thabo Mbeki.
It sets quantitative targets on specified clothing and textile products and will be effective from next month to the end of 2008. — Sapa