Joint statement by Clotrade and retailers on DTI quota on Chinese imports
07 September 2006
At a meeting of representatives of the clothing industry and DTI in Cape Town today, Clotrade and the retailers made the following statement
Clotrade and retailers who are signatories to this statement believe the gazetted plan with respect to quotas from China will result in chaos and enormous disruption for the industry.
We wish to make it clear that the parties to this statement have differences on the principle of quotas and we respect each other’s rights to differ in this regard.
However, we need to make it clear that Clotrade and the retailers jointly and unreservedly reject this quota plan. 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 on the quota or the implementation process of the quota.
Should a proper impact study have been done and a proper consultation process have been followed, with business stakeholders and other experts providing input, the following considerations, amongst others, would have been apparent:
The lack of capacity of the local industry to meet demand, given the massive downsizing and restructuring that has taken place in recent years;
The negative impact on the consumer in general terms, and particularly in relation to the welfare of poorer and unemployed consumers in South Africa who are desperate for cheaper clothing;
The impact of not taking lead times and committed orders into account;
The negative impact on manufacturers and jobs in not taking into account the inclusion of fabric in the quota (in relation to CMT’s and exporters as well
The negative perception of the South African clothing and retail businesses’ credibility and South Africa’s governance being questioned
The uncertainty of SARS and ITAC to administer this process;
That the quota will open the way for unscrupulous dealers and encourage a culture of dishonesty
The inaccuracy of the data, nature of products covered, and fact that the quota goes down to sub-headings
The unfair and inadequate method of allocation of quota that fails to take account of changing business patterns and needs, new entrants to the market, as well as seasonal peaks and valleys.
Whilst the proposed quotas have been put in place with the supposed intention of increasing growth and jobs in the industry- the quotas will actually have the exact opposite effect. Jobs will be lost and growth stunted.
The focus and combined resources of all stakeholders has to shift to being on the real enemy- illegal, under-invoiced and suspect trade practices.
For these reasons, we call for the urgent and immediate:
Withdrawal of the gazetted plan on quotas to stop the chaos and the damage
Conducting of an impact study, by independent experts, jointly agreed by the parties, with accurate data and comprehensive input by business
Following the impact study, proper consultation, in particular with the affected business parties bearing in mind there are also many other affected business parties, such as indirect suppliers to the industry and small and emerging businesses that have to be heard.