Mpahlwa rejects defence against China
No quotas for textile imports
October 31, 2005
Cape Town - South Africa would not invoke World Trade Organisation (WTO) rules to limit cheap imports from China, trade and industry minister Mandisi Mpahlwa said yesterday.
"There is huge pressure on us to go for safeguards" allowed by the WTO to protect the textile industry, he said. "As a government, we are not absolutely convinced that is the best thing to do. We have to look at the totality of the relationship with China."
A surge in cheap Chinese imports caused more than 50 000 South African clothing and textile workers to lose their jobs this year.
Negotiations with China were continuing and "a high level of progress has been achieved", Mpahlwa said.
The import tariffs on textiles were being reviewed, aimed at reducing costs for local clothing manufacturers, and customs inspection was being improved to reduce illegal or underinvoiced imports.
But the minister said quotas were "not something we can just impose". Industry players must come forward with evidence that they were being hurt by unfair competition, he said.
Pointing out that South Africa had two-way trade with China, the minister said the government must "look at the totality of our relationship with China. It is much broader than just clothing and it is growing."
The EU was not imposing protective quotas against Chinese clothing imports, Mpahlwa said. Similar comments were made by Rob Davies, the deputy minister of trade and industry, at the recent annual general meeting of the national bargaining council for the clothing manufacturing industry, when Ebrahim Patel, the general secretary of the Southern African Clothing and Textile Workers' Union, said 50 000 jobs had already been lost and action was essential.
Other matters discussed by Mpahlwa yesterday ranged from the importance of developing small, medium and micro enterprises (SMMEs), which could play an important part in transformation and provide "a very firm foundation for empowerment", to the need for better freight transport, cheaper telephone calls and broadband internet communication, and negotiations for an aluminium smelter at the new port of Coega.
The minister said procurement from SMMEs by both the government and private enterprise would assume a great deal more importance. Some good practices could already be found among large corporates.
The cabinet had agreed that the 10 manufactured products most used by the government should be identified and ordered from SMMEs.
But there was a huge gap in providing finance for that sector. A small business strategy approved by the cabinet this month would improve access to finance for small business, especially in the R10 000 to R250 000 loan bracket, and encourage the creation of women-owned, community and rural enterprises.
It was also essential that SMMEs should be paid on time. "Otherwise, we shall create an environment for SMMEs and then kill them."
Discussing progress in strengthening the first-world part of the economy, the minister said intense and difficult discussions taking place between Alcan and Eskom over the cost of electricity for the proposed aluminium smelter at Coega had reached a critical point.
Explaining that the smelter would use huge amounts of electricity, he said there were other companies interested, including one from Russia, but if Alcan decided to withdraw it would cause further delay while prospective new investors carried out their own studies.
Discussing transport, he said the government was "keen to advance competition in this sector". This was being pursued through the introduction of multiple competing operators for rail and ports.
A strategy to restore rail transport to neglected parts of the country, stimulating industry and providing work opportunities, by reviving disused branch lines, would be completed by January and "the revival of some branch lines in the Northern Cape and KwaZulu-Natal has already begun".
Other initiatives were taking place to intensify competition in the information and communications technology (ICT) sector, where the department of communications
was facilitating broadband technology. A benchmark study on best practice, a stakeholder discussion paper on broadband policy and a programme to modernise ICT structure were being developed.
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