SA,+China+agree+to+curbs+on+cheap+imports,+Business+Day

Business Day, Johannesburg, 28 December 2005
=**SA, China agree to curbs on cheap imports**=


 * Linda Ensor - Political Correspondent**

CAPE TOWN — Government was on the verge of concluding a voluntary restraint agreement with China to stem the flood of Chinese clothing and textile products into the country, Trade and Industry Deputy Minister Rob Davies said yesterday.

Signature of the long-awaited agreement will go some way to assuage criticism of government’s inaction by clothing and textile manufacturers and trade unions.

Both labour and business have blamed the flood of cheap Chinese imports for the decline of the industry, which has experienced an estimated 55000 job losses since 2003.

Davies said signature of an agreement on the same lines as that reached between China and the European Union (EU) earlier this year was “imminent”.

This would involve an offer of a voluntary restraint by the Chinese on clothing and textile exports to SA.

He said the agreement would also involve possible joint ventures with the Chinese in clothing and textile manufacturing “at a later stage”.

Trade and industry deputy director-general Iqbal Sharma led a trade delegation to Hong Kong for tough negotiations with the Chinese government alongside the recent World Trade Organisation (WTO) ministerial meeting.

The deal between the EU and China involved an agreement by China to curb the growth in imports of 10 Chinese textiles and clothing products 8%-12,5% a year until the end of 2008.

This followed the EU blocking millions of unlicensed Chinese garments in European warehouses in June.

The industry and the trade unions have been waiting for several months for decisive intervention in the crisis.

Congress of South African Trade Unions general secretary Zwelinzima Vavi accused government of “moving very slowly” to protect local clothing and textile products.

About four months ago the industry, with trade unions backing, sought government support for the imposition of WTO safeguards. The provision for interim safeguards was made when China was admitted to the WTO in 2001.

It allowed for the temporary reimposition of quotas on Chinese clothing and textile imports if they surged to such an extent that they harmed domestic industries. However, government has been loath to incite China’s wrath by taking such a step, and has stalled on taking action on the industry application for safeguards for about five months.

Doing so could have harmed its export of basic commodities to the vast Chinese market. Instead it has sought to reach an accord with the Chinese government.

While it has been engaged in the talks, it has come under fire from trade unions, which accused it of having acted tardily. Movement is also expected soon on a dedicated sector strategy to revitalise the beleaguered textile and clothing industries.

Davies said a customised sector strategy — thrashed out after wide consultation with business and labour — was due to be finalised shortly for immediate implementation. The strategy identified key action plans the different role players would be obliged to follow.

Davies said the key thrust of the strategy would be to help the industry recapture some of the domestic market lost to Chinese imports. It would also be geared towards upgrading the technological base of manufacture and enhance local competitiveness.

From: http://www.businessday.co.za/articles/topstories.aspx?ID=BD4A131855