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South African Apparel will not be Protected by China Quotas

South African Apparel will not be Protected by China Quotas

Write: Cathan [2011-05-20]

The South African government has told industry and trade unions it will not be pursuing safeguard measures to limit cheap surging Chinese apparel imports.

Soaring Chinese imports have cost more than 50,000 South African jobs to go in the apparel and textile industries so far this year.

Dialogue with China is preferable to confrontation, trade and industry minister Mandisi Mpahlwa told industry organisations.

Negotiations with China have taken place and "a high level of progress has been achieved," he said.

Instead, Mr Mpahlwa advised of other available options such as lowering import tariffs on yarn and raw material and urged the apparel industry to move away from confrontation.

"The sector itself needed to look beyond this issue of safeguards and quotas," he said.

Industry also came under attack from Iqbal Sharma, acting deputy director general in the department of trade and industry.

"The lack of creativity, entrepreneurship, vision and leadership in this industry is alarming," he said.

Pretoria's stance with China has not gone down well with manufacturers and trade unions, critical of the government's lack of concrete action.

The government has been criticised over negotiating a preferential trade agreement (PTA) with China despite South Africa's R16 billion trade deficit with the country.

China was not being fair to South African industry and workers according to Zwelinizima Vavi, head of the Congress of South African Trade Unions (COSATU).

"While we appreciate the trade and industry department's desire to negotiate a mutually acceptable agreement with China, it seems the Chinese side is simply dragging out the talks to avoid stronger measures," he said.

Manufacturers have also accused the government of being too soft on China and doing little to protect jobs and factories.

The increasing value of the rand against the US dollar is proving a big problem for South African exporters, confirmed Dr Aaron Searll, Chief Executive Officer of Seardel Investment Corporation.

"It is an obstacle that cannot be overcome without urgent intervention," he warned.

Appealing directly to the government, he called for the implementation of a surcharge linked to the exchange rate or a return to safeguards.

The strong rand is also being affected by Asian governments who have pursued a policy of depreciating their currencies in tandem with the US dollar.