TRALAC - Trade Law Centre

South Africa: Crisis in Textile Sector prompts MPs to act

Monday, 07 February 2005

Source: Business Day (South Africa)

Cape Town — Parliament’s trade and industry committee is to intervene in the crisis affecting the country’s clothing and textile industries by holding public hearings at which stakeholders will air their views and seek solutions.

The sectors are suffering from a deluge of cheap Chinese imports, and parties from across the political spectrum have expressed concern about the huge job losses that have resulted. Currently, 40% of all fabric imports, 60% of textile imports and 86% of clothing imports come from China.

The Democratic Alliance (DA) has criticised government’s inaction in the face of the crisis and the inertia of a special task team appointed to deal with it. Government will be asked to respond to these allegations at the hearing.

The International Trade Administration Commission will also be called on to answer accusations that it had been tardy in dealing with tariff increase applications.

The decision to hold public hearings followed a briefing by trade and industry department deputy director-general Lionel October and his officials on small business promotion.

“It is important for us as an oversight committee to ensure that stakeholders are able to articulate what they have experienced recently and then for government to interact with them and in this way hopefully we will be able to facilitate a way forward,” said committee chairman Ben Martins.

DA trade and industry spokesman Enyinnah Nkem-Abonta criticised government for not using World Trade Organisation (WTO) rules to rescue the clothing and textile industries.

Other countries had adopted a multitude of mechanisms to keep imports out without contravening international agreements, he said. African National Congress MP Ben Turok confirmed that the use of nontariff barriers was widespread internationally.

October said the department had set up a team of government, employer and trade union representatives to look at what safeguards could be imposed under WTO rules in circumstances when imports had an unprecedented surge.

He resisted calls for stiffer import duties, saying this would not be an effective instrument and warned of the dangers of responding in a populist manner.

“The question of safeguards is no panacea. We have introduced safeguards before (for example in the footwear industry).

“It has not helped. While there is a knee-jerk and quick response to say ’Let us put up tariffs to protect our industries’, it is not workable.

“We have to have a much more nuanced approach with both short term safeguards and measures taken by industry to make them competitive in the long term.

“It is wrong to say it is indifference if government does not respond to every lobby calling for an increase in tariffs.”

In addition, government had to consider the position of exporters, who also created jobs, October said.

Nkem-Abonta also complained about the lack of government action in dealing with the regulatory stranglehold on the small-, medium-, and microenterprise sector. While this had been talked about for years, nothing had been done, he said.

October said an interdepartmental team was looking at the issue and a regulatory impact assessment unit would be established in the presidency.

In addition the South African Revenue Services was evaluating the burden of small business tax with a view to cutting red tape.



“AGOA Latest AGOA Trade Data currently available on AGOA.info


Click here to view a sector profile of South Africa’s bilateral trade with the United States, disaggregated by total exports and imports, AGOA exports and GSP exports.


Other regularly updated trade statistics on AGOA.info include: (click each link to view)

  • AGOA-beneficiary Countries’ AGOA and GSP Trade Aggregates

  • AGOA Trade by Industry Sector

  • Apparel Trade under AGOA’s Wearing Apparel Provisions

  • Latest Apparel Quotas under AGOA

  • Bilateral Trade Data for all AGOA-eligible countries individually.