The summit was attended by executives and government observers from 25 countries, including the SA Textile Federation (Texfed). .
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Texfed signed the Istanbul declaration – a letter to the director-general of the World Trade Organisation (WTO) calling for a three-year extension to the January 1 2005 deadline on textile and apparel quotas. .
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Delegates will urge their governments to call for an emergency meeting of the WTO to find solutions to the pending crisis associated with the expiry of the quotas. .
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An anticipated flood of cheap imports, mainly from China, threatens to swamp world trade, leading to a “catastrophic transfer of wealth” and the loss of 30 million jobs worldwide. .
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“We are concerned that the transition to open textile and clothing markets should proceed in a manner that serves the original WTO intent to create conditions of fair, open and equitable textile trade. .
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“The intent was specifically to benefit developing and least developed countries, many of which will now suffer greatly from the current quota phase-out,” the statement said. .
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Local industry organisations are greatly concerned about the future of these sectors, which provide about 180 000 direct jobs in the formal sector.
Texfed chief executive Brian Brink said extending the deadline would be “of major significance for textile and apparel exporters”. .
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“Imports from China account for 74 percent of all apparel imports into South Africa that supply 64 percent of the country needs,” he said, attributing China success to “aggressive marketing at very low prices”. .
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Since the decision was taken to phase out quotas at year-end, the Chinese government has introduced trade-distorting practices, such as granting substantial export subsidies and pegging its currency to the dollar, which have exacerbated a situation created by the payment of very low wages to workers in these sectors. .
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Already, China has increased its share of the world market in categories released from quotas from 9 percent in 2001 to 65 percent in March and has slashed prices by 48 percent. .
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This is seen as an important predictive tool with which to gauge China behaviour when quotas are lifted on the remaining 75 percent of textile and apparel trade. .
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However, Jack Kipling, the chairman of the Clothing Industry Export Council, said that, in dollar terms, South Africa had managed to hold its own until the end of last year, but that it would lose out going forward. .
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The WTO will be asked to extend the quota system, to develop a new system or use other mechanisms. .
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The organisation will also be asked to “implement automatic and seamless transitional safeguard mechanisms to prevent massive disruptive surges in trade from a few countries”.
Date:6/24/2004
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