The Big Read: President Jacob Zuma recently concluded talks with the Chinese on a number of issues, one of which was the strengthening of trade. From reports, it appears that South Africa is once again reluctant to proceed with a free-trade agreement, prompted mainly by its concerns about protecting vested interests in labour-intensive industries, primarily textiles and clothing.

Throughout the world, what bothers these industries is that Chinese manufacturers can produce clothing and textiles more cheaply than they. As a result, domestic manufacturers call on their governments for protections such as taxes on Chinese clothing and textiles or, in extreme cases, an outright ban on those Chinese goods. South African producers are one group among many struggling to compete with the Chinese and, like others elsewhere, are calling for the institution of myriad measures to protect "fragile" local industries.

In January 2007, the South African government introduced quotas restricting imports of Chinese textiles and clothing for two years. The quotas, or "safeguards" as they often have been called, were put in place to give manufacturers a window period in which to become more competitive. But, just as evidence in the past has shown, protected industries never become more efficient because the protection they are given takes away any incentive they might have had to become so. Instead, there are persistent appeals for the protection to be extended.

Therefore, in 2009, after the window period expired, it came as no surprise when industry bodies claimed that the quotas "have not made the struggling clothing and textile companies more competitive because the two-year period [was] too short for them to earn a return on investments in new machinery".

Quotas are a particularly damaging form of intervention because governments arbitrarily decide the level of control deemed necessary to protect local manufacturers, a task that no one can perform because of the dynamic nature of the demand for goods.

In the interim, poor consumers, those at the low end of the market, those who typically benefit from cheaper imports, have to pay higher prices for the goods they want.

Because quotas are not as transparent as a tariff, which is simply levied on goods entering the economy, they often open the door to corruption. Customs officials are given the power to decide which importers' goods will be allowed entry, and how much they will be entitled to import. Influential importers might receive preference over others. Moreover, quotas are set without any scope for changes in demand, and governments are usually slow to react to changing circumstances. Some importers, seeing the potential for filling a gap in the market, might resort to smuggling to accommodate the increased demand.

Subsidies and artificial barriers such as tariffs and quotas harm the majority of South African citizens. If the government really wants to help South African clothing and textiles manufacturers, without harming the rest of the country's citizens, it should make the environment in which the manufacturers operate more conducive to doing business. Taxes imposed on clothing and textiles manufacturers should be substantially reduced, as should the cost of doing business in South Africa.

Last week, the trade unions - the biggest proponents of protecting local industries to safeguard unionised local jobs - revealed their true colours, jeopardising the jobs of at least 9000 people by forcing 85 clothing manufacturers in the Newcastle area of northern KwaZulu-Natal to shut up shop. This was because the employers were not paying their workers the minimum wage of R324 a week, thus denying them "decent work".

But to be denied the right to work, in an area where, according to the Newcastle municipality, the unemployment rate is about 60%, is shameful.

To make matters worse, a further 386 non-compliant manufacturers have apparently been identified by the unions and competing clothing manufacturers. Their closure could affect as many as 15000 jobs.

Alex Liu, the chairman of the Newcastle Chinese Chamber of Commerce, said: "The lowest-paid worker in our factories earns R250 a week and the highest R500. But they are also demanding that we pay the minimum wage and it's impossible for us to do that because we are competing with imports from China and the [cut, make and trim] price from our customers will not sustain us if we paid R324 a week."

Trade unions in this country are not interested in ordinary South Africans. They lobby to protect unionised jobs from foreign imports even if it is at the expense of the poor. That is their job. Like any business, they try to maximise profits and the best way to do this is to protect their members from competition - be it foreign or local. The unseen victims are ordinary, poor South Africans who are forced to pay higher prices for clothing or remain idle with little or no understanding of why they can't get a job.

The government can't afford to heap highly concentrated benefits on a select few - it must start to think of the majority of South Africans, who benefit from cheap clothing, and allow those who want to work to do so under whatever conditions they choose.

• Urbach is an economist for the Free Market Foundation. The views expressed in this article are the author's and not necessarily shared by the foundation