South African retailers on Wednesday called for the suspension of an agreement on limiting Chinese clothing and textile imports.

Edcon, Truworths, Foschini, Pepkor, Mr Price and Woolworths said in a joint statement the agreement would impact badly on consumers and lead to corruption and loss of income for retailers.

"Retailers believe that quotas will inevitably lead to corruption and the creation of undeserving wealth by some middle men," the statement said.

"Apart from the significant inflationary impact expected of 20 percent to 25 percent or more on prices of some key categories of clothing to consumers and shortages of stock for their shelves, other factors are emerging that are of as great a concern."

Key problems were price increases owing to expensive local materials.

"The local fabric industry can be as much as 50 percent more expensive, is far less flexible and many fabrics on the list are simply not readily accessible to South African retailers locally, if at all."

Should the new regulations go ahead, retailers estimated that there could be about 20 to 25 percent price increases on necessities like children's clothing, warm winter padded jackets and denim.

"Chinese imports have assisted in lowering clothing inflation which has been low to negative over the past few years. Consumers have welcomed these low prices matched with variety and better quality than ever before."

Not only would the agreement impact on retailers and their customers, the statement pointed out that the South African Revenue Authorities could lose thousands of rands.

"It has been revealed that the South African Revenue Authorities could lose over 1 billion rand from top retailers alone through lower profits, lost sales and lower VAT collections by December 2006 as many products would not be replaced at short notice." Labor unions have welcomed the agreement, saying it was the right move toward poverty alleviation.

The National Union of Metalworkers of South Africa, the Congress of SA Trade Unions and the SA Clothing and Textile Workers' Union said the move would create 55,000 jobs.

Source: Xinhua