Africa trade deal helps Chinese firms

Thabile Dahile with her 3-year-old granddaughter, Lerato, in front of her house in Newcastle, South Africa.

TEXT OF STORY

Kai Ryssdal: U.S. and African trade officials are meeting today in Ghana. They're reviewing a trade deal called the African Growth and Opportunity Act. The basic idea was to get rid of U.S. tariffs on goods manufactured in sub-Saharan Africa, and so expand the market for products that desperately need a market.

Trouble is, it wasn't just sub-Saharan countries that negotiators should have been thinking about when they wrote it. From South Africa, Gretchen Wilson reports.


Gretchen Wilson: At the Peak Trade clothing factory here in Newcastle, 200 women are piecing together T-shirts — 70 per hour each. Talking's generally forbidden.

I'm looking for Thabile Dahile. You'd think finding a grey-haired, aging woman here it'd be easy to spot. But there are so many older women here, I can't see her. She's asked me not to approach her if I do, because she's afraid she'll lose her job.

If you listen closely, you'll understand what many workers here see as part of the problem. The machinists and ironers here are Zulu women. But the owners aren't South African. They're from Shanghai.

In Newcastle, many men are unemployed, or have left for jobs in other towns as miners or truckers. So those working in the factories are all women. Most are their family's only breadwinners, and about a third, like Dahile, are grannies who traditionally would be home with the family.

Dahile earns 44 cents an hour — less than half the minimum wage, which is rarely enforced here.

Thabile Dahile (voice of interpreter): It's so little what we earn, I can't even build myself a house. Even groceries, when I get paid I can only afford corn meal, and with what's left over, I can't buy meat or vegetables to go with it. Our wages are not enough.

At night, Dahile returns to the two-room shack she shares with her daughter and granddaughter. She wants electricity and plumbing. But as she sweeps the plastic sheet that covers her dirt floor, she says factory owners take advantage of young and old South Africans alike.

Dahile: The management is not treating us well. Sometimes, they don't count your work properly. They don't count all of it. So they can rob you.

Still, with so few jobs here, she has no other choice.

Dozens of Chinese factories set up shop in Newcastle after 2000. That's when U.S. Congress passed AGOA. It's another example of how Chinese firms have capitalized on U.S. trade incentives elsewhere. China's now making cars in Mexico that come to the U.S. tax-free.

In 2005, the world scrapped a quota system that protected clothing producers. That meant African companies had to compete directly with Chinese firms. Predictably, China got the upper hand.

Still, Newcastle keeps trying to woo foreign companies. Economic development director Ferdie Alberts:

Ferdie Alberts: Irrespective of the bad publicity and some trade by them not complying with labor legislation, we are grateful for what they have done for our local economy.

It could be worse. Actually, it is. Twenty-five-year-old Fikile Buthulezi says she can't afford to buy the clothes she makes. They're sold at local department stores.

Fikile Buthulezi (voice of interpreter): Sometimes, it hurts to see someone wearing a T-shirt that you know was difficult to make. Your boss was over you, shouting at you, and the person wearing it now is walking down the street enjoying herself. But at the same time, it's nice to see something my hands have made.

[Sound of Street hawker selling merchandise]

Friday's pay day at Newcastle's factories. Women file out of the gate and into the street. It's crowded with hawkers selling clothing pulled from plastic bags — jeans for $8, sweaters for $1.50. There's loads of it. And yep, you guessed it: it's all imported — from China.

In Newcastle, South Africa, I'm Gretchen Wilson for Marketplace.

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