The Congress of South African trade Unions (Cosatu) and the Reserve Bank have agreed that a new industrial strategy to combat cheap Chinese imports was needed.
Governor Tito Mboweni and Cosatu general Secretary Zwelinzima Vavi met on Monday night following remarks by the governor that the proposed Chinese import quotas made “no economic sense”.
“We agreed that only an industrial strategy would turn this situation around. It has become extremely urgent to address this matter. It was in this context that we discussed the trade agreement between South Africa and China,” Cosatu said in statement on Tuesday.
Vavi briefed Mboweni about the processes that led to the signing of the agreement between the two countries. This included the decisions of the Alliance Summit early last year and the task team established by the president of the African National Congress to look at short- and long-term measures to be taken to address job losses in the clothing and textile industry.
Cosatu said that Mboweni and Vavi discussed the negotiations between the Department of Trade and Industry, the South African Clothing and Textile Workers’ Union, the clothing and textile manufacturers and the retail industry that has led to the agreement on restructuring of the industry.
“This plan, called the customised sector programme, which will soon be announced, seeks to modernise the industry and ensure that it takes full advantage of the window period provided by the SA/China trade agreement on clothing and textiles. All parties agree that competitiveness of the industry must be improved if was to withstand the threat of Chinese imports,” the union federation said.
“He [Mboweni] expressed appreciation that there was a full strategy that does not just depend on time-bound limit of imports from China. We agreed to continue to interact more closely to continue the discussions that have begun,” Cosatu said.
The meeting covered the broad economic challenges facing South Africa, including the high unemployment rate, poverty and the economy’s growth rate.
According to statistics provided by the Reserve Bank, clothing, textiles and footwear make up 20% of total imports from China but the same imports from China increased by 450% between 2000 and 2005.
Both parties have agreed to continue to interact “more closely” and to continue discussions. ‒ I-Net Bridge