South Africa's fragile textile industry continues on a downward spiral while it battles for survival against cheaper imports and awaits a government decision on safeguard measures. More factory closures and job losses can be expected next year, says Textile Federation (FedTex) executive Brian Brink.
SA's trade delegation is preparing for tough negotiations at the World Trade Organisation (WTO) in Hong Kong this week.
One of the concessions the industry hopes to get is special provision for sensitive industries like clothing and textiles which are labour intensive and are being hard hit by an invasion of cheap imports, especially from China.
Brink says the industry has applied for safeguards for several items, including curtains and bed linen, which have been particularly badly affected by the cheap imports.
"It has taken us five months to prepare these cases and we have not heard a thing from government since we submitted our proposals to them four months ago," he says. Brink says the import pricing defies economic logic. "There are cases where curtains coming to SA from China are priced at R2/kg as a finished product, yet the international price of cotton is pegged at R7/kg."
FedTex chairman Igsaan Salie says the clothing and textile industries have submitted requests to government for a range of protective measures. "These are interim measures for about three years to give the industry breathing space while it restructures its business to become more competitive," he says.
An estimated 20 000 jobs were lost in the SA clothing and textile industries last year, and thousands more this year.
Business is not completely without blame for the delays. Earlier this year the department of trade & industry (DTI) said business had failed to provide it with the necessary evidence of the impact of cheap imports on its operations, and this had held up any kind of action for a couple of months.
However, this evidence is now with the DTI, and the industries are waiting for some sign of movement.
Government itself, though, is not yet decided, judging by comments from trade & industry minister Mandisi Mpahlwa, who has been quoted in media reports as saying that safeguards against Chinese imports are not an idea that enjoys his full support.
One analyst says the minister is in a difficult situation because SA and China are considering a bilateral trade agreement, which could offer SA exporters greater access to the world's most lucrative market.
Since China is considered both an important opportunity and a threat, government will need to tread carefully so as not to neglect the concerns of the ailing sectors in favour of bigger opportunities for the resources, mineral and manufacturing industries.
Though the WTO rules have provisions dealing with illegal dumping, these countervailing and safeguarding mechanisms can be triggered only with government support.
Both the EU and the US acted swiftly when they became aware of the Chinese import threat to their textile industries, despite the fact that China was admitted as a member of the WTO this year.
