COSATU calls on the government to stop the influx of cheap and subsidised imports and support local manufacturing to boost job creation

The Congress of South African Trade Unions is deeply concerned to note that the private sector in South Africa is pushing for more imports to be allowed in the country, as part of the effort to kickstart the economy. The Covid-19 has taught us that the reliance on imports compromises the ability of the state to provide critical products in cases of a pandemic, as has been the case with the security of supply of PPE. The rebuilding of the South African economy must look inwardly and enhance South Africa’s local manufacturing capacity to create jobs displaced by the pandemic. 

We support the Direction by the Department of Trade and Industry for the gradual opening of imports to deal with the fact that large parts of the local manufacturing sector has been closed for over five weeks and is still restricted from full operations.

The Federation understands that for now, it would not be prudent to prohibit imports when we do not have the capacity to produce critical goods, but this needs to be strictly controlled. It is disconcerting that 65% of our imports are manufactured goods because this is an indication of high import penetration and possible dislocation of domestic firms. This means that we need further intervention at SARS to ensure a massive expansion of its customs enforcement capacity.

We support imports which are limited under lockdown to address lockdown challenges and vulnerable sectors in the economy such as auto which export necessary parts. But there is a need to shift our policy to import substitution trade policy which will not protect sectors through tariffs but also through industrial finance and local procurement and interest subsidies.

Government and Local businesses need to rally around the “Buy Local” Campaign to increase local production and stimulate job creation. This is in line with plans to revive South Africa’s economy so that millions of jobs can be created, and unemployment can be decreased. Millions of jobs are going to be lost because of the lockdown and the Covid-19 outbreak; therefore, decisive action needs to be taken to boost the local manufacturing industry.

Buy local is a matter of the highest importance. Our industrial and manufacturing sectors were bleeding even before the shutdown. For too long we have allowed ourselves to become a nation of cheap subsidised imports.  As we begin to rebuild a new, inclusive, and job-creating economy; at the centre of our economic revival has to be a concerted campaign to ensure that at all times where possible we buy local. 

Where local capacity does not exist but can be built, then the government and the private sector need to show solidarity and invest in creating such capacity. China and other countries’ manufacturing capacity did not fall out of the sky. It was built with government and private sector investments and buying local. It is time we woke up and did likewise, otherwise, we are committing economic suicide. The government cannot afford to be a bystander, but it needs to wield all its powers, legal and financial, to encourage and drive local procurement.

We appreciate that imports and trade, in general, play an important role in ensuring the availability and affordability of vital medicines, medical products, and health care services. International trade is crucial to ensuring access to medicines and other medical products – no country is entirely self-reliant for the products and equipment it needs for its public health systems.

But each WTO member is free to determine what is necessary to protect its citizens and take the measures it deems appropriate. In general, WTO rules provide broad space for members to adopt trade measures deemed necessary to protect public health and public welfare (including import and export bans, quantitative restrictions on imports and exports, and non-automatic import licensing). These measures should be applied in a manner that does not discriminate between WTO members and should not constitute a disguised restriction on international trade.

The Federation is also worried that there seems to be a push for the economy to operate at maximum capacity without any plan to enforce the new occupational health and safety protocols and conditions set out to reopen the economy. We appreciate the urgent need to flatten the curve of poverty and unemployment, but it should not be done at the expense of workers’ lives. Workers sell their labour and not their lives.

Issued by COSATU
 Sizwe Pamla (Cosatu National Spokesperson)

Tel: 011 339 4911
Fax: 011 339 5080
Cell: 060 975 6794