The proposed trade restrictions on clothing and textiles from China “must be an attempt” by the ruling faction within the African National Congress (ANC) alliance to score some points with its more left-leaning counterparts, says the official opposition.
It also argues that the restrictions fly in the face of the Accelerated and Shared Growth Initiative for South Africa, which aims to reduce the costs of doing business with South Africa.
The Democratic Alliance’s (DA) Pierre Rabie said on Friday it is clear that the action is not sincere. “If it were sincere, then [the] government would not have waited until the situation escalated to where the local clothing and textiles industry is shedding jobs at the estimated rate of 1 000 per month. If it were sincere, it would also certainly not have taken such a populist form, or have been implemented in such a draconian way.”
Rabie said if the government had used any of a number of the more positive World Trade Organisation-sanctioned measures available to it ages ago, “then the current crisis would have been avoided”.
He said he does not believe the trade restrictions will be beneficial to the local clothing and textile industry. It will certainly not benefit job creation in general, and consumers will also not benefit, he charged.
The problem with the trade restrictions on 200 imported Chinese clothing items is that they are “tight quotas” introduced when the local industry cannot compete with any of a number of clothing- and textile-producing markets. The result will be that retailers will turn to Vietnam and Bangladesh for supplies.
“The trade restrictions by themselves will have the effect of a false economy. Even if local clothing and textile manufacturers become more competitive in the local market in the two-year period in which the restrictions will be in place, the state of competitiveness will also be false and will fall away again as soon as the period of the restrictions comes to an end.
“Government has made no mention of any adjustment measures to assist the clothing and textile industry to make itself more competitive. Two years is far too short a period for a whole industry to reinvent itself.”
It is also disingenuous for Department of Trade and Industry acting deputy director general Iqbal Sharma to be so resentful towards the media for the outcry over the trade restrictions, “when they are so clearly out of sync with the rest of the government’s economic policies”.
Sharma had charged at a news conference on Thursday that the media’s approach to the matter lacked balance.
Rabie said “the core thrust” of the government’s main economic policy, the Accelerated and Shared Growth Initiative for South Africa, “is to attract employment creating investment by reducing the costs of doing business and reducing the regulatory burden that businesses face in South Africa”.
“Having to apply for additional special import permits and quotas and facing increased costs inflation through trade restrictions is simply no way to achieve this.
“Given that government is sticking to the implementation of the trade restrictions, the DA will now focus its efforts on ensuring that government does indeed provide the adjustment assistance to the clothing- and textile-manufacturing industry, so that the pain that it will cause the economy will not be in vain.” — I-Net Bridge