AT a time when the domestic textile sector is facing its worst crisis to date, tougher times lie ahead with the ending of quota limits in developed countries at the end of next year.

The ending of the system will result in a more fair system of trade rules for textile producing countries, but SA will be among the losers and the effect would be almost immediate, said South African Textile Federation head Brian Brink.

This is mainly because the decision will open doors to developed markets for some of SA''s largest competitors, such as China.

Brink suggested the move would also lead to the proliferation of protectionist action, such as antidumping measures.

This does not augur well for SA''s struggling textile industry. The textile federation warned earlier that 12000 jobs could be lost if tough conditions, caused mainly by the strong rand and illegal imports, continued to prevail.

The termination of textile and apparel quota limits restrictions on the quantity of imports into developed blocs such as the US and European Union is in line with the World Trade Organisation (WTO) agreement on textiles and clothing.

The two industries are the only sectors of international trade in manufactured goods which fall outside of WTO rules .

Textiles and clothing are instead governed by a series of trade-distorting regimes, culminating in the MultiFibre Arrangement.

This is a framework for bilateral agreements or unilateral actions that establish quotas limiting imports into countries whose domestic industries face serious damage from rapidly increasing imports.

Following the termination of quotas next year, duties alone would regulate textile and apparel trade in future , said Brink.

"The impact on SA will be an immediate increase in competition from the likes of China."

For example, China now represents 53% of all apparel imports into the US, he says. This figure is projected to rise to 75% next year and to 90% in 2005.

"With such massive market share gains by China, all other apparel exporters to the US will be the losers. These countries include Mexico, Indonesia, Turkey, Philippines, Bangladesh, Guatemala and SA," said Brink.

Antidumping action, often misused by countries as a protectionist measure against fair competition, is widely expected to rise as a result of the quota termination.

WTO director-general Supachai Panitchpakdi has warned that antidumping duties are meant to counter injurious dumping, "not to provide a general safeguard against increased imports or a substitute for quotas".

He has also said that the full application of WTO rules to international trade in textiles and clothing would be a positive and long-awaited development "for the industries and millions of consumers who will benefit from a more open, nondiscriminatory and transparent trading environment in this sector".

The local textile federation has submitted several proposals to government in an attempt to rescue the sector. Among these is an effective increase in duties on imported goods to protect against cheap imports, particularly from China.