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Change of exports quotas for EPZ textile companies in offing
Nov '08
The government of South Africa is contemplating increasing the quota of textile products that can be sold in domestic markets by companies operating from Export Processing Zones (EPZ). This is apparently being done to cushion the blow from the impending lifting of tariff barriers and end of quotas against import of textiles from China by the US in 2009.

This lifting of quotas by the US is expected to hit hard the export oriented textile and apparel companies operating from the EPZ's in South Africa, who are expecting to lose out to the cost competitive Chinese exporters.

Under current laws exporting companies are allowed to sell 20 percent of their manufacturing capacities in the domestic markets, but now the companies are demanding increasing that to 50 percent on fears of drop in exports beginning from 2009.

If the government was to accept the proposals, it would have to forego valuable foreign exchange and revenues, but at the same time a change in policy could save hundreds of jobs and companies from ultimate collapse.

Fibre2fashion News Desk - India

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