The Emperor's New Clothing Deals

The document critiques the use of voluntary export restraints and quota systems by South Africa, the European Union, and the United States to limit Chinese textile and apparel imports. The author argues that these measures are 'symptomatic medication' that delay necessary market adjustments and fail to address the fundamental lack of competitiveness in mass-produced clothing.

• The European Union and the United States have implemented quota systems to limit annual increases in allowable imports from China, with the EU's deal lasting until the end of 2006 and the US's until the end of 2008. These measures are intended to provide 'breathing space' for domestic producers and developing countries whose exports were displaced by Chinese imports.
• The surge in Chinese textile and apparel volumes following the expiration of the Agreement on Textiles and Clothing (ATC) on January 1, 2004, is described as an 'abrupt correction' to a distorted global market rather than a result of unfair trade practices. This correction occurred as 'quota-hopping' investors moved operations from Africa, Latin America, and southeast Asia back to mainland China.
• The author asserts that quota deals perpetuate a 'false reality' and force consumers to pay higher prices, which disproportionately affects the poor. Such deals do not change the underlying fundamentals of the industry, where competitiveness in mass-produced items is lacking.
• Opportunities for non-Chinese producers exist in niches, specifically as suppliers of textiles to China (which became a net importer of certain textiles in 2002) or by offering design flexibility and short runs for high-fashion markets in rich countries.
• South Africa's Customised Sector Programme (CSP) is presented as a planned cure for the industry. The author contrasts this with China's historical state intervention prior to 1999, where the government closed 600 factories and destroyed over 9 million cotton spindles to achieve profitability, noting that South Africa's market-based democracy lacks the mandate for such 'Draconian measures'.

APA

South African Institute of International Affairs (2006). The Emperor's New Clothing Deals. https://saiia.org.za/research/the-emperors-new-clothing-deals/

Chicago

South African Institute of International Affairs. The Emperor's New Clothing Deals. 2006. https://saiia.org.za/research/the-emperors-new-clothing-deals/.

Wikipedia

{{cite report |author=South African Institute of International Affairs |title=The Emperor's New Clothing Deals |date=21 February 2006 |url=https://saiia.org.za/research/the-emperors-new-clothing-deals/ |access-date=17 August 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{southafricaninstituteofinternationalaffairs2006emperors, author = {{South African Institute of International Affairs}}, title = {{The Emperor's New Clothing Deals}}, institution = {South African Institute of International Affairs}, year = {2006}, month = feb, url = {https://saiia.org.za/research/the-emperors-new-clothing-deals/}, urldate = {2026-08-17}, note = {Indexed by Climate Insights Directory} }