# CE2004070EN.01023801.xml

| 20.3.2004 | EN | Official Journal of the European Union | CE 70/238 |
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20.3.2004

EN

Official Journal of the European Union

CE 70/238

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(2004/C 70 E/257)

WRITTEN QUESTION P-3210/03

by Pietro-Paolo Mennea (NI) to the Commission

(23 October 2003)

Subject:   Unfair competition in the textile sector

Subject:

The Italian textile sector has been in difficulty for some years now.

The causes of this crisis include, first and foremost, competition from Asian companies following their incorporation into the WTO. These companies not only have infinitely lower labour costs, but also lack adequate and minimum internal rules as regards the labour market and the protection of their workers, who are often minors, and thereby violate the most fundamental citizens' rights and seriously infringe the freedom of the individual.

This unlawful conduct culminates in the customs clearance of the goods at Community ports, often without any invoices being presented or with the wrong qualities and quantities being declared, and with the systematic counterfeiting of local trade marks, including the most general trade mark ‘Made in Italy’, and frequent bypassing of tax legislation.

This unlawful situation subsequently becomes the basis for the sale of the finished product at a price considerably lower than the Community price, with the accompanying risk of closure of a significant proportion of the EU's textile firms and a serious knock-on effect on employment levels.

The manner in which these extra-Community companies compete on the EU market is unfair, unlawful and fraudulent.

In the light of the above, will the Commission intervene with the competent institutional bodies of the Member States to ensure they apply more frequent and stricter checks on goods entering Community countries?

Will it monitor and check whether extra-Community legal entities that own individual or collective companies and operate on Community territory conform to EU law, or in other words that they respect the right of competition and Member States' rights in the area of the labour market?

Is it within the Commission's powers to launch an official investigation in respect of the textile sector?

Answer given by Mr Lamy on behalf of the Commission

(19 November 2003)

(19 November 2003)

Crucial challenges face the textile and clothing sector not just in Europe. A number of issues were highlighted by the conference held in Brussels to consider the future of the sector after 2005. The Commission adopted a communication (1) on the subject on 29 October 2003 which contained measures to improve competitiveness in the textile and clothing sector prior to the elimination of textile quotas in 2005. The Commission's position is unequivocal and takes a clear line on the concerns expressed with the aim of providing practical responses for a sector with a future in the European Union, particularly as regards the points raised by the Honourable Member.

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The Commission is very aware of the problems of fraud and counterfeiting. A number of Community rules and programmes already exist to guarantee fair competition for European producers on world markets. It should however be said that the various Community measures could not succeed without the closer, coordinated involvement of the Member State authorities. The same applies to intellectual property. The Commission is stepping up its efforts to improve the protection and enforcement of intellectual property rights in non-member countries and monitoring of compliance with the WTO agreement on trade-related aspects of intellectual property rights (TRIPs). This will increase the effectiveness of action against trade in counterfeit goods and protect our strong points in the sector, i.e. innovation, branding, fashion and design.

To return to the two specific points raised, the Commission has already taken a number of initiatives. Customs controls are naturally harmonised at Community level and meet the requirements of the various regulations in force. All goods must conform to a harmonised nomenclature. The main frauds are well known to customs and subject to risk analysis, also increasingly harmonised.

In view of the sheer quantity of imports, the customs authorities clearly cannot check all textile and clothing products entering the European Union. Sampling rather than systematic checking is the norm. But clearly if there is genuine evidence of fraud in a particular sector, the customs authorities will exchange the information without delay via the European Anti-fraud Office OLAF and conduct enquiries.

In answer to the second question, given that the economic or legal entity, even if it is a non-Community one, is established in EU territory, it must comply with the legislation in force in the Member State in which it is based. Member State authorities are responsible for ensuring compliance with the relevant labour market and other laws, some of which have been harmonised at European level.

As regards the suggestion of launching an investigation in the textile sector, the Commission possesses instruments which allow it to take action against certain practices (e.g. trade protection measures), but this is normally done in response to complaints by Member States or the party concerned, as the case may be, regarding specific subjects or practices, which should first be clearly identified and then examined before a decision is taken regarding a possible investigation.

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(1)  COM(2003) 649 final.

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