Have the quotas on Chinese imports been lifted or not? It seems that South Africa's Department of Trade and Industry is incapable of communicating a simple message to the industry. South Africa's apparel sector says the cheap Chinese imports are the fundamental cause for job losses and market loss. I think we should also add the incompetence of the Department of Trade and Industry as a reason for this shambolic situation.
In December 2008, Trade and Industry Director-General Tshediso Matona said there had been no "formal application [for an extension] by one of the stakeholders … [therefore] the quotas would terminate at the end of the month." However he did leave open a door by indicating that the Department of Trade and Industry could "enfor[ce] an extension through a bilateral agreement."[1] There were rumours in the industry that government would come to some bilateral agreement with China to extend the quotas. Extension or no extension is not going to make any difference to the South African apparel industry.
On January 2, 2009, a news paper report indicated that the quotas had been lifted. "The Department of Trade and Industry chose not to renew restrictions on imports of Chinese clothing and textiles which had been in place since late 2006 and were no longer in effect as of yesterday."[2]
We are now informed that there has been no decision from the Department of Trade and Industry to lift or extend the quotas[3]. A month has nearly gone since the quotas were officially to end. What does this mean? Are the quotas still in place or not? Here we have the same department contradicting themselves. In December the Trade and Industry Director-General said the quotas would end on 1 January 2009, twenty-three days later the same department cannot clarify anything.
The Department of Trade and Industry must communicate decisively in a clear and in an unambiguous way a simple message. The quotas on Chinese imports are lifted or not. If they are not and there are secret negotiations taking place with the Chinese to extend the quotas due to pressure from Cosatu and the South African Clothing and Textile Union (remember this is an election year for South Africa) hence the inability for government to clarify their position on the quotas they must say so.
Fore more on the quota debate click here
Written by Renato PalmiIn December 2008, Trade and Industry Director-General Tshediso Matona said there had been no "formal application [for an extension] by one of the stakeholders … [therefore] the quotas would terminate at the end of the month." However he did leave open a door by indicating that the Department of Trade and Industry could "enfor[ce] an extension through a bilateral agreement."[1] There were rumours in the industry that government would come to some bilateral agreement with China to extend the quotas. Extension or no extension is not going to make any difference to the South African apparel industry.
On January 2, 2009, a news paper report indicated that the quotas had been lifted. "The Department of Trade and Industry chose not to renew restrictions on imports of Chinese clothing and textiles which had been in place since late 2006 and were no longer in effect as of yesterday."[2]
We are now informed that there has been no decision from the Department of Trade and Industry to lift or extend the quotas[3]. A month has nearly gone since the quotas were officially to end. What does this mean? Are the quotas still in place or not? Here we have the same department contradicting themselves. In December the Trade and Industry Director-General said the quotas would end on 1 January 2009, twenty-three days later the same department cannot clarify anything.
The Department of Trade and Industry must communicate decisively in a clear and in an unambiguous way a simple message. The quotas on Chinese imports are lifted or not. If they are not and there are secret negotiations taking place with the Chinese to extend the quotas due to pressure from Cosatu and the South African Clothing and Textile Union (remember this is an election year for South Africa) hence the inability for government to clarify their position on the quotas they must say so.
Fore more on the quota debate click here
[1] Business Day "Concern as Chinese clothing quotas expire" 4 Dec 08
[2] The Mercury "Quotas on China imports lifted" 2 Jan 09
[3] Fin 24.com " Textile quotas hurt business" 23 Jan 09
5 comments:
We need stable policies, not these quick fixes that cause untold disruption. Our local production capacity had shrunk when the quota was put in place so when Edgars etc. couldnt import anymore they ordered from the remaining factories, ones that we use for our small company's brands -result- our orders got pushed out. Now the tables have turned again and the factories are begging for our business again - lift it again and then what? This roller coaster ride is bad for us.
Sorry dude, but I have no sympathy for you. Before we had Chinese imports, it was standard to have to pay R250 for a pair of locally manufactored jeans. Now you get the same article (different name of course) for less than R100 at Mr Price. Locally made garments were expensive and of poor quality. Our overseas visitors were always shocked when they ventured into a local clothing store. Ditto for T-shirts. So my advice to you - ship up or ship out. No entitlement here!
Chinese imports are not to blame for the state of the clothing industry - cosatu and the rest of the unions are, as is SARS. We overpay our staff, who are hopelessly unproductive on the one hand, and on the other hand, importers are importing shirts that are under-invoiced, but the idiots at SARS seem to be incapable of understanding that a 3 piece suit could never cost $ 3.00, so just charge their 40% duty on the $ 3.00 without questioning the under-invoicing.
The Textile industry has been decimated by the DTI and local retailers. The DTI has a complete misunderstanding of the needs of the industry and the retailers insist on markups of 290%. As a local weaving mill, we face legislated wages 10 times higher than China, duties on yarns not available locally, exorbitant electricity and water prices and ridiculous interest rates. CLOTHING AND TEXTILES ARE TRADITIONALLY THE SECOND LARGEST EMPLOYER OF PEOPLE WORLDWIDE, BEHIND AGRICULTURE.
Quotas certainly help in stemmimg the tide of clothing imports from China. Retailers have decimated the local manufacturing industry as they have used Chinese prices to batter the local producers into ridiculous price reductions while maintaining or increasing their margins. This has resulted in factory closures, job losses, skills flight & presently unviable factories. If China & others cannot be forced to comply with similar labour laws as we in S.A.then govt. has a duty to protect us.
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