South African retailers object to quota on Chinese textile imports
Source: Xinhuanet Date: 2006-09-11
The engagement between the South African government and clothing retailers in Cape Town on Thursday appears to have 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 (DTI) 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 SA), 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.
"We object in the strongest terms to the process that has been followed. No consultation has taken place with Clotrade nor with the retailers on the possible consequences and no impact study has been conducted."
It said local industry lacked 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 5 billion rand (684 million U.S. dollars) over the next three months if the quotas came into force, and that the cuts would push up clothing prices.
DTI said that the restrictions were merely limited, and did not completely halt Chinese imports.
"In light of this, government's view is that these imports will not be to the detriment of retailers and importers to the degree that is generally being reported," the department said.
DTI Deputy Acting Deputy Director General Iqbal Sharma launcheda scathing attack on media representatives, blaming them for fueling animosity between manufacturers and retailers.
He blamed the media for taking sides with the retailers and said that greed was the reason for retailers not accepting the restrictions. He said profits of the five largest companies in the retail sector have increased from 1.7 billion rand (236 million dollars) to 7 billion rand (972 million dollars) in the last three years.
