SA textile sector teeters on the brink

WTO rules against extension of quotas WITH THE World Trade Organisation (WTO) having turned down a plea for extension of textile quotas to 2008, Africa’s textile and clothing sectors are standing on the brink of failure in the global export market. That’s according to Brian Brink, executive director of the SA Textile Federation, who told FTW that price-advantageous duty-free entry to the US market under the Africa Growth and Opportunity Act (Agoa) would also be blown for six in a global market free-for-all. This will be utterly dominated by the serious price-cutting in Chinese textile and clothing exports, he said. The quota system was primarily in place to control China’s massive exports from its highly-subsidised industry, and its removal by the WTO lets loose a Chinese wolf against the lambs of the developing world’s textile and clothing industries, according to Brink. Given this situation, he said: “It has been predicted that the apparel markets in the US, the European Union (EU) and Japan will be dominated by China followed by the likes of Sri Lanka and Bangladesh, the other low-cost producers. “Africa will just be pushed out.” And, given that figures released to Brink indicated that Chinese-origin cotton tee-shirts could be landed at Durban at a unit price lower than SA manufacturers pay for the cotton yarn that goes into a tee-shirt, the problem is clearly a serious one. Even the benefits of AGOA can’t overcome this sort of massive price disparity, he said, and the last remaining advantage to African exporters in a global cut-price market will have gone.