The Emperor's New Clothing Deals

The author contends that quota agreements between China and major economies like the EU, US, and South Africa are 'naive and wrong' because they attempt to recreate the distorted market conditions of the expired Agreement on Textiles and Clothing (ATC). The text argues that the surge in Chinese exports is a market correction rather than unfair trade, and that protectionist measures only increase consumer costs and delay industrial adaptation. While the author acknowledges that niches exist for high-value or specialized apparel, they suggest that South Africa's Customised Sector Programme (CSP) must change investor expectations rather than relying on the state-led 'Draconian measures' used by China to restructure its own industry in the 1990s.

• The quota systems implemented by the EU and US to limit Chinese textile imports are viewed as ineffective attempts to provide 'breathing space' for producers, as they do not change the underlying economic fundamentals of the global market.
• The recent increase in Chinese textile and apparel volumes and the corresponding price drops are described as an 'abrupt correction' to a market previously distorted by the Multifibre Arrangement and the Agreement on Textiles and Clothing (ATC), rather than the result of unfair trade practices.
• Protectionist agreements on textiles are criticized for delaying necessary market-driven adjustments and causing welfare losses by forcing consumers to pay higher prices, which disproportionately affects the poor.
• Opportunities for non-Chinese producers exist in specific niches, such as supplying textiles to China (which became a net importer of some textiles in 2002) or producing high-flexibility, short-run fashion items for rich markets.
• The author argues that South Africa's Customised Sector Programme (CSP) cannot replicate China's successful industrial restructuring of the 1990s—which involved closing 600 factories and firing 2.5 million workers—because South Africa is a market-based democracy without the same state mandate.

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} }