Talk to China or fail, Mpahlwa tells Africa
October 28, 2005
Johannesburg - Africans had to seek an agreement with China on quotas to regulate imports of cheap clothes and textiles that threatened to ruin the clothing industry on the continent, trade and industry minister Mandisi Mpahlwa said yesterday.
"It is a bit of a difficult relationship that we find ourselves in. China's demand for raw materials, for commodities, has been very beneficial to the continent, but an influx of cheap goods from there has been destructive," Mpahlwa said.
"South Africa is very concerned about the situation because we are seeing a loss of jobs in the clothes and textiles sector. Africans should not seek short-term measures, we should look for a comprehensive solution that will create a balance on this matter."
Mpahlwa said South Africa was holding talks with China on coming to "some arrangement", as part of the government's strategy of accelerating economic growth to at least 6 percent a year. He said his department would aim for a quota system on imports.
The labour unions had asked the department of trade and industry to examine tariff structures and production lines involving Chinese goods to help regulate Chinese imports, but had backed off when the government decided to talk to China.
"I would say Africa should seek to come to an arrangement with China that will deal with this problem."
He thought an answer would not be found at the ministerial meeting of the World Trade Organisation in Hong Kong in December.
Speaking on the sidelines of a trade conference called to harmonise the country's agenda for the Hong Kong meeting, he said South Africa expected Canada's Alcan to decide in the first quarter of next year whether it would go ahead with a $2.5 billion (R16.8 billion) aluminum smelter project at Coega near Port Elizabeth.
Alcan executives had visited South Africa three months ago for talks on energy pricing with power utility Eskom and "very intense negotiations continue".
He said the negotiations were proving "difficult". Aluminium smelters consume large quantities of electricity, which can account for a third of production costs.
Alcan, the world's second-largest aluminium producer, and rivals such as US-based Alcoa are reducing investments in the US and Europe to build smelters in countries such as Iceland, Oman, and Trinidad and Tobago, which offer cheaper power.
The Coega Development Corporation, which is overseeing investment in the Coega industrial development zone, the Industrial Development Corporation, and the ministries of trade and public enterprises are also involved in the negotiations. The government hoped the negotiations could be concluded next January, Mpahlwa said.
"Then we can announce the decision to South Africans who have waited patiently for some time now."
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