Textile task team weighs up its China options

ALAN PEAT THE TEXTILE, clothing and footwear industry task team is back on track and the programme for the way forward is again underway, according to Brian Brink, chief executive of the Textile Federation. The task team was set up by the DoT&I last year to investigate short-term remedies to counter the importation of low-quality products. It will also focus on remedies to the other main problem that the industry has to combat. The absolutely cut-throat price competition from the “cheap” producers of the products – something exacerbated by the end of the quota system which used to control the mainly Asian cut-price exports, particularly from China. The surge of imports from China is certainly hurting the industry in this country, according to Lionel October, DoT&I’s deputy director in charge of enterprise and industry development. “China’s economies of scale mean it is massively competitive at the low end of the market. They have a vast pool of cheap, skilled labour,” he said. An indicator of this was revealed to FTW by Brink – who said that documentation in the federation’s hands was verification that one Chinese export, bed-sets, was officially priced at two US cents each. “With prices like this, the Chinese are certainly open to challenge,” he said. And there are a number of ways in which this can be done. Short-term steps include increasing import tariffs to the maximum level allowed by the WTO, applying anti-dumping measures, introducing safeguard tariffs against low-cost producers, and improving customs controls to stem illegal or particularly cut-price imports. There is also a special safeguard in the case of China. This is the accession protocol which was signed up when China entered the WTO – and allows a government to apply specific quotas on the growth of Chinese imports to SA until the protocol in turn expires in 2008. “But we haven’t yet decided which route(s) we will follow,” said Brink. The next task team meeting, he added, is diarised for next month.