South Africa said on Thursday that it would delay imposing
planned quotas on Chinese clothing and textile imports from
September 28 to January 1, 2007.
The Department of Trade and Industry (DTI) said in a statement
that the government made the decision to take retailer concerns
into account.
"This concession is offered in a spirit of promoting strategic
dialogues and cooperation among all the stakeholders in the
interest of boosting the sector and safeguarding employment," the
department said. It said: "A later implementation date will allow
the customary high level of business over the Christmas period to
proceed without interruption."
The government said that the decision followed extensive talks with
all stakeholders, and took into account concerns over domestic
supply and quota allocation issues.
"The parties agreed a delay of implementation will go some way
to enable all the players in the value chain to put in place
arrangements to enable the industry to adjust to the restrictions
and take advantage of the resulting opportunities," it said.
The department said the authorities administering the quotas
would issue companies with import permits at least six weeks before
the January 1 implementation date.
Woolworths welcomed a decision by the DTI. In a statement on
Thursday, its CEO Simon Susman said the decision would allow the
state to have time to consult with retailers ahead of the 2007
implementation date.
"We look forward to engaging further with government and other
key stakeholders on the detail of this proposal," Susman said.
"We believe any proposal needs to deliver sustainable solutions
which ensure that the inflationary impact for the consumer is
minimized."
"These solutions must include all stakeholders working together
to make this industry more productive and flexible, and therefore
competitive."
The two-year agreement between South Africa and China was
scheduled to be implemented on September 28 but the date has been
moved to January 2007.
This followed a week of unhappy retailers opposing the move,
saying local companies would not be able to offset the sudden drop
in supplies, leading to empty shelves at the approach of the
festive season.
Also, retailers argued that the implementation of quotas was
going to have an inflationary impact on the price of clothing,
forcing customers to pay higher prices, especially in children's
clothing.
Last week, the engagement between the South African government
and clothing retailers in Cape Town had done little to defuse
industry opposition to proposed quotas on Chinese clothing and
textile imports.
Refusing to present a conciliatory front, the delegation of
retailers left a meeting in the Constantia Room of the luxury Cape
Sun Hotel with labor and manufacturing representatives left behind
to explain to journalists what was happening.
In separate statements issued afterwards, retailers said they
"unreservedly" rejected the plan, while the Department of Trade and
Industry suggested they were overreacting.
In a statement issued after Thursday's meeting, they warned the
plan would result in "chaos and enormous disruption".
The statement was issued in the name of Clotrade (the Clothing
Trade Council of South Africa), and retailers Woolworths, Edcon,
Foschini, Queenspark, Mr Price, Pepkor and Truworths.
"We need to make it clear that Clotrade and the retailers
jointly and unreservedly reject this quota plan," they said. They
added local industry lacked the capacity to meet the demand the
quotas would bring, given the massive downsizing and restructuring
that had taken place in recent years.
They called for the immediate withdrawal of the quotas, followed
by an impact study and proper consultation.
Key players in the retail industry said earlier this week that
they could lose up to five billion rand (US$684 million) over the
next three months if the quotas came into force, and that the cuts
would push up clothing prices.
The DTI said that the restrictions were merely limited, and did
not completely halt Chinese imports.
(Xinhua News Agency September 15, 2006)
