Red tape delays start of new textile incentive programme

LEONARD NEILL THE DEPARTMENT of Trade and Industry’s new export incentive programme for the clothing and textile industry, scheduled to start at the end of March, has come up against a major hurdle which may delay its launch. Trade and Industry Minister Mandisi Mpahlwa gave the programme his approval to replace the duty credit certification scheme (DCCS) which comes to an end on March 31. But it seems no one passed on an instruction to DTI’s International Trade Administration Commission (ITAC) to implement the scheme. Now delays in clearing the red tape which must be overcome before it can become law is expected to take the issue well beyond this month’s end, according to sources within the department. When FTW went to press, the department was unable to say when the Commission would get its official instruction to proceed, and when the programme would then be up and running. There are fears that it may have a severe impact on exporters, many of whom have already been hard hit by the relaxation of World. Trade Organisation (WTO) restrictions on international exports by Asian nations. The new programme not only compensates manufacturers and exporters of textiles and clothing by providing duty rebates for large scale (Level 2) exporters, but has also provided for smaller manufacturers (Level 1) to have claims on exports increased from the previous 15% to 25%. The implementation delay is being treated with serious concern says an industry spokesman. South Africa ran into problems when DCCS was introduced as the scheme had been challenged by the US and EU on the grounds that it contravened WTO rules.