Textile industry welcomes extension of incentive scheme

THE CLOTHING and textile industry’s duty credit certification scheme (DCCS) has been extended until the end of March 2009, offering textile manufacturers and exporters rebates on import duties for another two years. “It certainly is good news,” says Brian Brink of the Textile Federation. “But it will be interesting to see what the framework looks like when it is gazetted.” The old scheme that expired in April was not World Trade Organisation (WTO) compliant as export incentives are not strictly within WTO legal statutes. “Any new scheme will have to be WTO compliant, and to do that it cannot be linked to exports,” explains Brink. The export incentive scheme was intended to strengthen export competitiveness of the industry. However, uncertainty surrounding the future of the programme saw thousands of workers laid off as employers were forced to cancel export contracts These credits take the form of tradable certificates, but were often sold to retailers who use them to offset duties on imports. The sale of the certificates was subsequently banned as their sale benefits the retailers, a sector not meant to benefit from the scheme. “At this stage the scheme will probably look like it did before it expired, which contains stipulations that take a carrot and stick approach,” says Brink. The existing scheme requires that a certain percentage of the profits derived from the programme benefits be diverted to training and development.