South Africa
It has been reported in the South African news that the controversial quotas on Chinese apparel and textile imports have been lifted. South African retailers will welcome this development whilst the South African Clothing and Textiles Union will be somewhat devastated. The union said that the quotas have helped the local industry saving jobs but these claims could not be confirmed with quantifiable data. During the course of the quota period numerous apparel companies were shut down.
The lifting of the quotas will place further pressure on our local designers and fashion industry who are trying to capture market space in an already difficult economic environment. The absolute silence from this sector of South Africa's textile and apparel industry is appalling. This sector will have no right to bemoan the renewed threat of Chinese imports or the prevailing conditions they will have to operate under as the industry restructures itself for a post-quota period.
The effects of lifting of the quotas will not be seen immediately as I do not think retailers will rush back to China as labour cost have increased. However, having said that it was reported that "profitable Chinese textile firms saw a 1.77% annual slide in profits for the first 11 months of 2008. The Reuters report said there was "concern that textile exports [from china] could fall by 30% in the first quarter of this year." Now that the quotas have been lifted China may offer various incentives for South African retailers in the hope of capturing the market they lost during the quota period.
I am certain that the debate about the "good and the bad" of the quotas will continue. In the meantime, SARS must continue to monitor illegal imports and both the suppliers and retailers must be held accountable for such behavior. The Department of Trade and Industry need to release urgently the much awaited CSP report relating to the restructuring of the industry.
For more on the debate around the quotes click here.
For more on the debate around the quotes click here.
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