NEWS & ANALYSIS

COSATU backs textile tariff increases

Union federation says local market needs protection against cheap imports

The Congress of South African Trade Unions welcomes the increases in import tariffs on clothing from 40% to 45% on 35 lines of garments. The purpose of these tariffs is to protect the local market against cheap imports that might destroy local industries and jobs.

The G20 Forums in November 2008 and April 2009 urge countries to avoid protectionism, through the use of import quotas and tariffs, and/or local procurement strategies to protect domestic markets.

But despite these calls to avoid protectionism, protectionist measures by the rich have been increasing. For instance, rich countries continue to subsidise their farmers to the detriment of those in poor countries. This was recognised by President Zuma in his speech to the World Economic Forum in Africa when he said that "protectionist policies by the haves will deepen Africa's woes".

Farmers' subsidies in wealthy countries have led to disinvestment in agriculture, loss of jobs, migration to cities with resultant pressure on resources and they have destroyed farmers' and rural people's livelihoods.

For the past three years SA has been importing subsidised dairy products from the US with detrimental effects on the domestic dairy industry and jobs.

For more than 40 years rich countries have used the Multi-fibre Agreement to protect their clothing and textile industries to the detriment of poor countries industries. The MFA was terminated in 2005 but these countries continue to use tariff peaks to discourage clothing and textile imports from poor countries.

COSATU believes that SA like any other country is within its rights to increase applied tariffs to their bound or maximum levels and the increases are WTO-consistent. Protectionism is a lawful trade policy measure to the extent that it seeks to protect infant or small developing industries against cheap imports which might destroy jobs within WTO rules. So too are local procurement campaigns like Proudly South African, which seek to maximise local procurement of goods and services

SA is not banning imports but is trying to ensure that global trade benefits are spread equally among participating nations and not only to benefit exporting, mostly rich, countries.

The Nedlac Framework Agreement provides that SA must use trade measures to protect its industries and jobs. Whilst rich countries have used the financial muscle to bail out their industries, poor countries should not be prevented from using trade measures to do the same.

Polokwane resolved that all economic policies should be based on industrial policy and that decent work should remain at the centre of all economic policies.

COSATU urges government to use tariff and local procurement policies and other measures in this period of recession to protect existing jobs, key labour intensive industries and industrial capacity, as envisaged by Polokwane and the Nedlac Framework Agreement.

These tariff increases will have a long-term effect of strengthening domestic capacity, improving local production and creating more decent jobs. 

Statement issued by COSATU, July 2 2009

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