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South Africa Delays Imposing Quota on Chinese Textiles
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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)

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