COSATU,+SACTWU+welcome+quotas+on+Chinese+clothing,+textiles

COSATU Media Alert 4 September 2006
=COSATU welcomes quotas on Chinese clothing, textiles=

The Congress of South African Trade Unions joins its affiliate SACTWU in welcoming the announcement that quotas on clothing and textile imports from China were gazetted by the Government on 1 September 2006.

We particularly welcome the SACTWU general secretary’s prediction that, if properly implemented, the agreement on quotas could help to create more than 55 000 new jobs in the local clothing and textile industry.

In just four years, this industry has lost around 67 000 jobs, largely because of a surge in Chinese imports. Since 2002, clothing imports from that country have risen by 480%. As a result, at the end of 2005 our trade balance with China was a deficit of R23 billion.

Retailers - the five biggest of which have made R18.1 billion in pre-tax profits over those four years – are reportedly complaining that these quotas will raise prices for the consumer. But that will only happen if they try to maintain the excessive levels of profits that they have enjoyed through importing very cheap Chinese goods and then selling them with a big mark-up.

We agree with SACTWU that the retailers should now work with the local clothing industry to put job creation and the national interest before their profits.

These quotas should make us all better off. Jobs will be saved and created. An industry that faced collapse can be revived. Meanwhile consumers will be able to buy Proudly South African goods of excellent quality and good value. The trade balance with China will move from deficit towards surplus and the whole economy will benefit from have a strong and expanding clothing and textile sector.

COSATU is pleased that one of the demands of its Jobs and Poverty Campaign has been met. We look forward to more such action from government to save and create jobs in every other sector of the economy, so that we can begin to move towards achieving the target set by the Growth and Development Summit of halving unemployment by 2014.


 * Patrick Craven (National Spokesperson)**
 * Congress of South African Trade Unions**
 * 1-5 Leyds Cnr Biccard Streets**
 * Braamfontein, 2017**


 * P.O.Box 1019**
 * Johannesburg, 2000**
 * SOUTH AFRICA**


 * Tel: +27 11 339-4911/24**
 * Fax: +27 11 339-5080/6940/ 086 603 9667**
 * Cell: 0828217456**
 * E-Mail: patrick@cosatu.org.za**



SACTWU's COMMENT ON CHINA QUOTAS, 4 September 2006

 * Press release**

=SACTWU welcomes cutback on clothing and textile imports from China=

The Southern African Clothing & Textile Workers' Union warmly welcomes the announcement that quotas on clothing and textile imports from China has been published in the Government Gazette on Friday 1 September 2006.

If properly implemented, the agreement can help to create more 55 000 new jobs in the local industry.

So said Mr Ebrahim Patel, General Secretary of the 110 000 strong SA Clothing and Textile Workers Union (SACTWU).

"The agreement, which is for a fixed time-frame, gives us a great opportunity to rebuild the local industry. We need to use the space created to ensure we make our factories state-of-the-art and improve training of workers on a scale that will develop South Africa into a world-class producer," he said.

The announcement follows more than a year's negotiations between the governments of China and South Africa. The agreement was first initialed at a ceremony in late June this year, by the Chinese Premier Mr Wen Jiabao and South African President Mr Thabo Mbeki.

The agreement sets quantitative targets on specified clothing and textile products and will be for a limited period from 1 October this year until the end of 2008.

Over the past four years, the local fashion manufacturing industry has lost approximately 67 000 jobs, largely as a result of a surge of imports from China. Over the same period, the five big retailers have recorded R18.1 billion in pre-tax profits. It is now time for retailers to work with the local manufacturing industry to place the country and employment before profits. Why can't some of these super profits be deployed to create local jobs and to lower the costs of domestic clothing and textile goods?

The vast volumes of imports from China have had a devastating impact, with factory closures in the poorest parts of the country such as Dimbaza in the Eastern Cape, which have become industrial ghost towns.

Even countries like the USA, the EU and Brazil had quotas imposed on Chinese imports even though they had not yet been as adversely affected by imports as those in South Africa.

Since 2002, clothing imports from China rose by 480%. At the end of last year, our trade balance with China was R23 billion, meaning that South Africa had a negative trade of R23 billion.

In July last year, SACTWU submitted an application to the International Trade Administration Commission (ITAC), the statutory body responsible for trade-relief measures, detailing the market disruption and injury caused by the flood of Chinese imports.

The application identified a large number of products where jobs were lost, factories closed down and local manufacturing capacity was lost. It called for urgent trade safeguard measures as permitted under the terms of China's accession to the World Trade Organisation (WTO).

Following the application, consultations took place between the two governments, as required by World Trade Organisation rules, in order to consider the request by SACTWU. These talks concluded with consensus to have a bilateral agreement in which China undertook to limit exports and increase investment in the South African industry.

"The agreement is a positive development and will help to save and create local jobs," said Mr Ebrahim Patel.

"Over the past three years, industry has been completely preoccupied with short-term survival and not enough focus was placed on the long-term development of the sector. This agreement will now give business and labour a unique opportunity to plan ahead," Mr Patel said.

"The industry needs a triple package: trade measures with China, a competitiveness package for industry and an active 'buy local' campaign. We have now achieved agreement on the Chinese imports. The rest of the plan has to be implemented as a matter of urgency. Taken together, they can create more than 55 000 new jobs in the industry," he said.

"In March this year, during the Cape Town Fashion Festival, SACTWU released details of a 14 point growth plan for the industry which envisages significant support from government to recapitalise plant and equipment, train workers, support innovation and design excellence and turn the industry into a quick-response, consumer-oriented sector. Business, labour and government are in the process of finalising the plan and it will be an excellent complement to the trade agreement," Mr Patel said. Most of these proposals have now been included in the a new industry plan, called the Customised Sector Programme, which has recently been agreed between manufacturers, government, retailers and labour.

"We acknowledge the cooperation between the dti and SACTWU on the future of the industry, the support given by the tripartite alliance since April 2005, and the public commitment to the industry made by President Mbeki. The COSATU programme of mass action has highlighted the fate of retrenched workers and has built a constituency of public support for the industry" he said.


 * Issued by the SA Clothing and Textile Workers Union (SACTWU). If more information is required, please call Etienne Vlok on 021-4474570.**

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