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Business Day, Johannesburg, 11 October 2006



Cosatu and Mboweni ‘much closer on quotas’



Mathabo le Roux

RESERVE Bank governor Tito Mboweni and the Congress of South African Trade Unions (Cosatu) have moved “much closer” on the issue of clothing and textile quotas following a marathon meeting between Mboweni and Cosatu general-secretary Zwelinzima Vavi on Monday night.

There has been tension between the two camps since Mboweni last month blasted the plan to limit the importation of Chinese goods in a bid to salvage the local clothing and textiles industry. The industry has haemorrhaged jobs since cheap Chinese clothes started streaming into the South African market.

Mboweni said quotas did not make economic sense, and would not save an industry that was not competitive.

Cosatu hit back, calling the remarks irresponsible.

In a bid to resolve the tension, Mboweni and trade federation leader met on Monday night. Vavi said they had discussed “broad economic challenges facing SA in the context of globalisation”.

The discussions had brought them much closer on issues of trade and the country’s trade relations with China, he said.

While vehemently defending the restriction of clothing and textile imports from China, Vavi conceded the quotas would be effective only if implemented within the broader strategic plan to overhaul the industry.

The customised sector programme, a blueprint of government’s plan to bale out the industry, has been more than a year in the making. Government hopes to restore the industry to competitiveness and boost job creation.

While the quota plan has also come in for scathing criticism from business representatives, Iqbal Meer Sharma, acting deputy director-general in the trade and industry department, said yesterday that SA’s relatively uneducated workforce meant government had to intervene.

The industry, which is labour- intensive but does not necessarily need a high degree of skill, had massive potential to absorb workers in an economy faced by a jobless crisis, he pointed out.

Sharma, speaking on the sidelines at the opening of the South African International Trade Exhibition in Midrand yesterday, defended the department’s decision on the quotas, saying they were in line with the trade- protection measures implemented by the US and the European Union.

Government’s quota plan was set in motion by an application by the South African Clothing and Textiles Workers’ Union and manufacturer representative body Clotrade to the Inter- national Trade Administration Commission last year.

While Cosatu disagrees with much government policy, the federation has welcomed a mooted industrial policy of which the clothing and textiles sector programme forms part. The central theme of the policy is to reduce the exportation of raw material and boost beneficiation in a bid to grow downstream manufacturing and create jobs.

Vavi said the implementation of the strategy would go a long way to addressing SA’s problems and he urged government to release and implement the strategy “as a matter of extreme urgency”.

From: http://www.businessday.co.za/articles/national.aspx?ID=BD4A287311

480 words