Retailers and South Africa’s largest union federations on Wednesday took directly opposing views on moves to limit Chinese clothing and textile imports.
Edcon, Truworths, Foschini, Pepkor, Mr Price and Woolworths said the agreement will impact badly on consumers and lead to corruption and loss of income for retailers.
The Congress of South African Trade Unions (Cosatu), the National Congress of Trade Unions (Nactu) and the Federation of Unions of South Africa (Fedusa) disagreed.
On Wednesday, the federations threw their weight behind the agreement on limiting clothing and textile imports from China.
”As trade unionists and South Africans we believe that the job losses in the sector constitute a national tragedy and that urgent action is required,” they said in a joint statement.
”The terms of the voluntary export restraints introduced by China can save huge numbers of local jobs and create much-needed new employment.
”It is a confidence boost for a sector that has battled for survival in recent years,” the federations said.
”We note with regret the hostile reaction of certain retailers to the proposed agreement.
”We are disappointed that the retail sector, that has led the drive towards a massive rise in imports in the sector, is unwilling to become partners in creating jobs for the large numbers of unemployed in the country.”
Cosatu, Nactu and Fedusa, which jointly have a membership of more than 2,5-million workers, said 67 000 jobs had been lost in the clothing, textile and footwear sector over the past four years.
Earlier on Wednesday, the National Union of Metalworkers of South Africa, Cosatu and the South African Clothing and Textile Workers’ Union welcomed the agreement.
They said it would alleviate poverty and create 55 000 jobs.
Reacting to the agreement, the retailers said: ”Retailers believe that quotas will inevitably lead to corruption and the creation of undeserving wealth by some middle men.
”Apart from the significant inflationary impact expected of 20% to 25% or more on prices of some key categories of clothing to consumers and shortages of stock for their shelves, other factors are emerging that are of as great a concern.”
Key problems were price increases owing to expensive local materials.
”The local fabric industry can be as much as 50% more expensive, is far less flexible and many fabrics on the list are simply not readily accessible to South African retailers locally, if at all.”
Should the new regulations go ahead, retailers estimated that there could be about 20% to 25% price increases on necessities like children’s clothing, warm winter padded jackets and denim.
”Chinese imports have assisted in lowering clothing inflation, which has been low to negative over the past few years. Consumers have welcomed these low prices, matched with variety and better quality than ever before.”
Not only would the agreement impact on retailers and their customers, the statement pointed out that the South African revenue authorities could lose thousands of rands.
”It has been revealed that the South African revenue authorities could lose over R1-billion from top retailers alone through lower profits, lost sales and lower VAT collections by December 2006, as many products would not be replaced at short notice.”
The federations said they have noted with regret the hostile reaction of certain retailers to the proposed agreement.
”We have noted with concern the claims by retailers that this agreement will lead to price increases. Retails profits are at an historic high.
”Having had four fat years, the retail sector should tighten its belt,” the federations said. — Sapa