Durban - The department of trade and industry (dti) has backtracked on its quota restrictions for clothing and textile imports from China by amending the regulations to allow importers and retailers that show significant commitment to the local industry to be allocated extra quotas.
Mike Morris, a professor at the School of Economics at the University of Cape Town, said on Friday that the move was significant as it vindicated those who had worried about the problem of instituting import quotas without sufficient research. The restrictions were introduced on January 1 as a temporary measure to lay a basis for improving the economic performance of the industry in the medium to long term.
According to the International Trade Administration Commission (Itac), a monitoring committee received reports of successes from stakeholders, which indicated that relations had improved between retailers, manufacturers and labour as a result of the restrictions.
Itumeleng Masege, Itac's acting chief commissioner, said as a result some of the major retailers had made serious commitments to the development of the domestic clothing and textile industry.
However, talk in the industry is that the quota system is "a mess" and one of the unintended consequences is that a manufacturer/importer was given an insufficient quota for the amount it was importing but enough to cover what it was manufacturing. As a result, it has stopped manufacturing and is now importing everything.
Michael Lawrence, the executive director of the National Clothing Retail Federation of SA, said he was not sure what the amendment meant. "Itac must be clear on the rules of the game. We must know what is meant by a 'significant commitment' … We also need to know who we should contact to fill in the gaps, not just to get extra quota, but to comply with the spirit and letter of the regulations," Lawrence said.
full story from Business Report here
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