MPs urge speed on protectionism

According to Linda Ensor of the Business Day, “MPs want the International Trade Administration Commission (Itac) to work faster to implement protectionist tariffs to help vulnerable industries fend off decimation. They believe it takes Itac far too long to deal with tariff reform applications, so threatened industries appealing for assistance are exposed to cheap imports for prolonged periods. The most glaring example of how a tardy response to tariff applications damaged a local industry is that of clothing and textiles, which pleaded unsuccessfully for years to have tariff protection imposed against the flood of cheap Chinese imports”.

The Free Market Foundation has pointed out in its submissions to government that any agreement that restricts cheaper (be they Chinese or other) goods from coming into South Africa (SA) cannot be in the interests of the millions of SA consumers with low incomes – individuals who can scarcely afford food and shelter and are extremely sensitive to any changes in price.

Therefore if the MPs succeed in raising tariffs where does this leave the poor consumer? It means that those who typically benefited from cheaper imports in the past end up subsidising the protected manufacturers. The last thing government policy should do is heap highly concentrated benefits on a select few at the expense of millions of ordinary South Africans.

Source: Linda Ensor MPs urge speed on protectionism Business Day, 01 June 2010.

For text: http://www.businessday.co.za/articles/Content.aspx?id=110499

FMF Policy Bulletin/ 01 June 2010