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COM(78)362
Vol.1978/0137

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COM(78)362final
COMMISSION OFTHEEUROPEAN COMMUNITIES
Brussels.20July1978
COMMISSION COMMUNICATION TOTHECOUNCILON
GENERALGUIDELINES
FORA
l
TEXTILES ANDCLOTHINGINDUSTRYPOLICY
'V./.,,'<!'
I
COM(78)362final

I.,INTRODUCTION
II.THEPROBLEM
III.GENERALOBJECTIVES FORTHECLOTHINGANDTEXTILESECTOR
IV."SPECIFICGUIDELINES
1.Adaptingindustrialandcommercialstructuresthrough
competitivedriveandbycoordinating thetextile
policiesoftheMemberStates. '
2.Improvingtheflowofeconomicandcommercialinformation.
ι
3.Technological development andcreativity
4*Publicauthorityintervention
5.Promotingexportsandactionontheinternational environment.
6.Cooperationwiththethirdworld.III.
IV.
\
*

-2-
I. INTRODUCTION
This -paper sets outtheCommission ^??proposals forgeneral -guidelines .
foradapting thetextile andclothing industries totheconditions of
international competition .
Thepaper isareply *tothefollowing statement oftheEuropean
Council meeting held inDecember 1977 ?"With theaim ofadapting
theEuropean production machine tothenewconditions onthe
Community andworld markets ,solutions tothestructural problems
which are common toallMember States must increasingly besought
atCommunity level ,particularly fortheiron andsteel ,textile and
shipbuilding industries ."
'Italso fit 'sinto themore general context oftheReport onsome
1structural aspects ofgrowth ,which should beconsulted .This
bases theCommunity 'sstrategy forgrowth oncompany initiative .
Itemphasizes theneed foratrue common market onacontinental
scale ifthedrive ofundertakings istohave full scope .Italso
sets outthelead andsupport theauthorities could give ,both
generally and inrespect ofcertain sectors .-.
This paper does not enter into detail yet about what policy should
beadopted ,astheCommission considers that theundertakings ,
manufacturers' associations ,trade unions andnational governments
should first beconsulted .This would help toidentify theproblems
and the specific measures required .
Itiswith this aiminview theat before theendoftheyear the
Commission ,inclose collaboration with COMITEXTIL andtheEuropean
Clothing Manufacturers Association ,will bearranging anumber of
consultations for -thevarious subsectors ofthetextile andclothing
industries ^Discussions will beheld with associations representing
distribution inorder toputtheCommunity industry inabetter
position toeesess themarket and itstrends .Parallel discussions
will beheld with the trade onions .
1COK(73)2 r;5final of22 .June 1978 ,

-3-
II.THEPROBLEM
1.Thetextileandclothingindustriesoccupyanimportantposition
intheCommunityeconomy:-theyprovideapproximately 10$of
wage-earningindustrialjobsanditisestimatedthat,interms
ofaddedvalue,theyaccountforsome£>%oftheCommunity's
..industrialactivity# .
Theirmainfeaturesare:numerousprocessingstagesanda
verylargepumberofundertakings ;apreponderance ofsmall
andmedium-sized undertakings insomesubsectors,particularly "
intheclothingindustry;"arangeofproductionthatishighly
.diversifiedastoproductsandoutlets;verymarkedfluctuations
"indemand;averyhighproportionofwomenin'thelabour-force;
heavyconcentration incertainregions,wheretheyrepresent
'alargeproportionofeconomicactivity. '
2,Theseindustrieshavealreadybeenindifficulties formany
years,mainlyasaresultofthe.slowgrowthrateofinternal
demandand.therapidindustrialization oftextileproductionin
thethirdworld.*
Therelatively ,slowexpansioninproduction wenthandinhand
withundertakings' ,effortstoadjustandinnovateandanimproved' •
'productivity.Theresultwasanoticeablecutbackinthelabour
force(absorbedbyrapidexpansioninothersectorswhenthe
economywashealthy)andtheclosingdownofmanyfactories.
Theeconomiccrisisof1974/75particularlyaffectedtextiles
andclothingbecauseitcoincidedwithasharpincreasein..
1importsofinexpensivetextiles.Thefinancialreservesof
undertakings wereaffectedandeventhemostdynamiconesare
findingitdifficulttokeepuporintensifythenecessary
effortstomodernize.

Thetextileindustryisa,"bigemployerandassuch'isessential
forthaindustrial,socialandregionalbalanceoftheCommunity's
eccn;my®Thelossofjobshasnotbeensteadybutcameinsudden
dropswhr.ch,giveni;.besitingof"thisindustry,hasmeantserious
structuralprobleuaformanyCommunityregions#Anypolicyshould
•thc-refcreconcentrate onabalancedadjustmenttotherequirements
c.:restructuring andindustrialconversiondictatedby
technological progressandthenewinternational divisionoflabour
Itshouldalsotakeintoaccountthespecificcharacteristics of
thesubsectorconcernedasregardssiting,thetypeofenterprise
andthestructureofthelabourforce(age,qualifications ,
highconcentration ofwomen)®
Thetextileandclothingindustryisalsoanessentialfactor
inthebalancingoftheCommunity'seconomicstructuresbecause
ofitscloselinkswithothermajorindustries (e.g.chemicals
andmechanicalengineering )andcertainbranchesoftheteriary
sector(e.g.researchanddistribution ),, '
Againstthebackgroundofanexceptionalcrisis,theCommunity
negotiatedverystringentagreementswiththosecountries
supplyingcheaptextileswhichgivetheCommunityindustrya
breathingspaceuntil1982–anopportunity whichitmustuse
tolaunch,orspeedup,itseffortstoadapttothe-conditions
ofbothCommunityand,international competition.Unlessthe
industrydoesadapt,thetextileagreementswillmerelyhave
.providedafalsesenseofsecurity.
–Theopportunity mustbeusedbecausetheCommunityis
committedundertheEPA,itspartnershavingmadesuch
a.commitment aconditionatthetimeofthebilateral
negotiations ^

/
The"bindingcommercialmeasuresadoptedin1977>which
verymuchfavouredtheCommunityindustry,wereessentially
transitional ,andtheyexpire'attheendof1982.
Furthermore theMultifibre "Arrangement expiresattheendof
1981anditisnotyetknownwhetheritwill"bepossibleto
renewitand,ifso,onwhatterms.'
TheCommunitymustplayitspartinthesharedeffortof-
adaptationwhichwill"benecessarywhenthreenewcountries
join(Greece,'PortugalandSpain),themselvesmajorsuppliers
oftextilesand-insomesubsectorsatleast–highly
competitive.-'

o
III.GENERAL OBJEC TIVES FORTHECLOTHING AND'TEXTILE SECTOR
Itisessential furEurope tohave ahighly efficient textile
and olol -liiig industry capable ofcompeting internationally and
providing e.large number ofjobs over along period®
This objective hasseveral aspects :
1eCompanies' ownindustrial drive -andthis should bethe
.prime mover ofprogress andadaptation intheindustry – „
should bechannelled tothedeveloping ofpoints ofstrength .
This implies close coordination between thepolicies ofthe
Member States andadherence toaframework foraids ,established
bytheCommission sothat they donotdistort theconditions
ofcompetition but do"facilitate thenecessary adaptations . < •
2,Great competitiveness ,theonly guarantee formaintaining jobs
inthelonger term ,might insome instances require ,cuts in
thepresent number ofjobs .Itwill therefore benecessary to \
provide aidforconverting undertakings ,jobcreation ,retraining
thelabour force andother social measures ifnecessary .
3.Theindustry must befully integrated into theinternational
trade system ,interms ofimports andexports ,andour
industrialized anddeveloping trading partners must bebrought
tounderstand andaccept ourpolicy .

-7-
IV.SPECIFICGUIDELINES
• «
1•Adaptingindustrial andcommercialstructuresthroughcompetitive
driveandbycoordinating thetextilepoliciesoftheMemberStates
.. •
Themodernization andsurvivalofasectormadeupoftensof
thousandsoffirms,willdependchieflyonthevitalityofthe
firmsthemselvesandoneffectivecompetition.
(a)'Inmanysubsectorsthemanagementofanundertakingisthe
principalfactorinsuccessorfailure.Essentialperformance
characteristics areabsentinmanyfirmsindifficulties ,yet
,•-theyhavebeensystematically developedinthemoredynamic
undertakings. *.
.ChiefamongtheseCharacteristics are:
.'»aproductandmarketpolicy;
•theexistenceofanactivemarketingandsalespromotion
department ; "
•thequalityofinformation andmanagementsystems;
thebalancebetweenproduction,marketingandresearch.
Intheconsultations ,theCommissionwillbelookingintoways
andmeansforthepublicauthoritiestohelpundertakings in
theseareas,particularly wheregroupsofsmallandmedium–sized
undertakingsareconcerned(supportforpilotprojects,
contributing towardsthefinancingofmarketresearchagencies
andconsultants *fees,etc.).ItistheCommunity*s
responsibility toencouragetheexchangeofinformation between
MemberStatesontheactiontheyaretakingandthelessons
tobelearnt,sothatthemostconvincingresultscanbedrawn
.uponand,whereappropriate ,appliedthroughouttheCommunity;

-8-
Inaddition,forsomesut>«ectors«bsretechnological developments
dictateenormouscapitalinvestment,theconsultations might
castlxghtontiisextenttowhichexistingplantsandequipment
aredeJCic!anta..idwhatresourcesmightbebroughtto"bearto
»r'"+htheprcblem.
(bTuereisnodoubtthatworkablecompetitionisthefastestand
mostreliableinstrumentforadaptinganindustrymadeupof
somanyundertakings .Toensuretheintroduction ofxvorkable
competition ,theCommissionwillcarefullymonitorallaction
bytheMemberState?;itwillseetoitthatanyintervention
bynationalpublicauthorities complieswiththeEECTreatyand
withtheguidelinesaddressedbytheCommissiontotheMember
Statesinthe1971an(^1977recommendations andoutline
directives onailtotextilesandtheready-madeclothingindustry.
2•Improvingtheflowofeconomicandcommercialinformation
TheCommissionconsidersthattheconstantavailability ofinformation
isanessentialtoolforassessingmeasurestoadapttheCommunity's
textileindustry.Aconstantsupplyofinformation ofthistype
shouldbeaccessibletoalltextileUndertakings .
(a)Industrialstatisticsforthetextileandclothingindustries.
TheCommissionwilltakefurtherstepstofillthegapsinthe
harmonizedproductionstatisticsfortheCommunityasawhole,
particularly fortheclothingindustry.
Seealsothecommunication fromtheCommissiontotheCouncilon
Commissionpolicyonsectoralaidschemes(CGM(78)221finalof
25Fay1978)o

Allthesestatisticsmustbecomparable ;inotherwol»ds,they
mustreflectthesituationalongtheentiretextileandclothing
chain.
TheCommissionispreparingtoputoutaquarterlymonitoring
statementonthetextileandclothingindustry.This,willbe
amoresuccinctreport,inwhichthebasicdatarequiredfor
assessingbothshortandmedium-termtrendsintheprincipal
economicfactors(production,employment,externaltrade,internal
demand,etc)willbeupdatedasquicklyaspossible.Thissummary
ofstatisticswillbeaccessibleatalltimes.
Sofar,ithasprimarilythesmallandmedium–sizedundertakings
whichcannotsetuptheirowninformationsystems,whichhave•
lackedtheinstrumentofadetailedknowledgeoftheCommunity
marketandchangesinit.Thisknowledgeisvitaltomanagement
becauseofthemanycomplexworkingstagesbetweenrawmaterial
andfinishedproduct,whichmakeitdifficulttoadjustthe
activitiesofundertakings further .upthetextilechaintoend
demanda " . •*
Information shouldthereforebeconcentrated onfinalconsumption
andextendbeyondthestrictlimitsofstatistics ;itimplies
regularsurveysandasystemfortheconstantprovisionofinformation
usingmethodssimilartothoseusedinmarketsurveys.
Here,too,theCommissionhopesthattheconsultations tobeheld
willmakeitpossibletodefinerequirements andwaysandmeans >
ofmeetingihem.- '-

-10-
3•To-;hro1lor .1_developme ntandcreair vutv
The Coriiirimi't ;"-industry nv.ist rnticc thewo^i ofitsadvantages aa
rcgai de '3ci.n0lc.gy ,specialization andcreativity® This IKHS
fctspv.' iigiiOresearch nd .xnnovat ?.one
»
L;:c-npies weald bethelaunching ofnewproducts adapted to
ch'■gepinlife style (sports ,leisure ,furnishings ),fully
exploiting changes infashion (taking advantage oftheproximity
ofthemarket ),andtheuseofnewmaterials -,
Such activities belong essentially toprivate enterprise .Some
Member States have programmes insupport ofthis type ofactivity
andnowwould appear tobethetime toensure that these programmes
become more effective bycoordinating such initiatives atCommunity
level .
Inthis connection attention .should bedrawn tothe first common
research programme partly financed byCommunity agencies .
Preparations areunder way toextend this programme onthe basis of
some Comitextil projects which are >iell advanced .
Inconjunction with theEuropean Association ofClothing Industries ,
theCommission isplanning aEuropean conference ontechnological
innovation ,aimed atproviding information forcompany directors ,
-particularly ofsmall andmedium-sized undertakings –onthe
potential ofexisting technology andtechnology about tobecome
operational .
*
a*

4.Publicauthorityintervention
Implementation ofmostofthepolicypointsgetoutaboveis
chieflyamatterfortheenterprises concerned.
Ai
TheCommunity'sfinancialaids,whichcouldbecombinedwith
nationalaids,mustbecoordinated and,likethelatter,abide
bytheaiddirectivestothetextileandready-madeclothing
industryissuedbytheCommission,soasto.facilitateadaptation
andanyothersectoralpolicyobjectivesagreedupon.
TheEuropeanSocialFundwillhaveafundamentalparttoplay
inthefuturefinancingofsocialoperationswhichmustbean
integralpartofrestructuring policy.

5.Promot ir,gex~Γ*Τ.^Ρndaction cnthe ir.~ernsiionjj.environment
(a)The Com.ininity istheworld 'sleading exporter oftextiles and
clothing .Itmust step upitsefforts toexpand saxes inits
traditional markets andwm new ones .
There are several factors infavour ofthis policy :
-thelimited growth intheinternal market ;
-theneed for fast turnover inproduction andtherefore
bigoutlets tocring returns ontheheavy investment dictated
"bytechno ;ogical progress inplant andmachinery ,andonthe
use ofhigh-level know-how totake advantage ofthose gaps in
theexport market still open tothe Community industry ;
-thegood reputation forinnovation andfashion which our
products already enjoy abroad .
(b)Inaddition tothesystematic Community action atinternational
level referred tobelow ,support bynational andCommunity
authorities could also take the form ofaid forad-hoc projects ;
this hasalready begun ,ofcourse ,but could beintensified –
e.g. prospecting fornewmarkets andfinding outhow topenetrate
them ,organizing deputations abroad ,advertising campaigns ,industrial
fairs ,specialist exhibitions ,etc.
This area offers avast range ofpossibilities forinter-company
collaboration atnational orCommunity level and for the
coordination ofnational efforts .
(c)TheCommunity will trytoreduce thebarriers tointernational
trade and ,with 'this inview ,all itstrading partners ,whether
industrialized ordeveloping ,must follow suit .

-13<-
TheCommissionwillmakeeveryefforttopromoteacodeof
practiceoninternational tradeintextiles#Itwill,conduct
itscampaignsystematically atmultilateral and"bilateral
levelandinallappropriate arenas,asit"believesthat,
wherereducing "barrierstointernational tradeintextiles
isconcerned,truereciprocityisessential.
6.Cooperation withthethirdworld
TheCommunityhasalreadypointedouttothedevelopingcountries
theriskstheyruninthepresentworldcontextinlettingtextiles
andclothingaccountforadisproportionately largeshareoftheir
industrialization effort,andhassuggestedthattheyshouldencourage
diversification oftheirindustrialactivitiesintheirdevelopment
plans.
TheCommunitymust,however,allowfortheexistinginterdependence
betweenitselfandsomedevelopingcountrieswherethetextile
industryisconcerned.Theindustriesofthesecountriesareanchored
inaframeworkofindustrialcooperation.Acertainpercentageoftheir
operationsis"basedonsemi–finishedEuropeanproductsandfrequently
theirproductionrangecomplementsthatoftheiroverseasordering
partners.Thissituation,whichresultsinreciprocaladvantagesfor
"bothinputandoutput,deservesdetailedexaminationinthecontext
ofastrategyforthesector. '
Theoutwardprocessingmethod--could "beone
wayofincreasingtiecompetitivity ofCommunityundertakings.In
somesubsectorsitispossible "bymeansofthisprocesstostrengthen
industrialproductionstructuresandmaintainacertainlevelof
'activityintheearlierprocessingstagesinthechain.Toensurethat
advantagesoutweighthedisadvantages ofthispractic.e,itsuseshould
becontrolledandtherulesframedatCommunitylevel.Infact,when
itadoptedthenegotiatingdirectivesin1977,theCouncilmade
provisionfordefiningCommunityrulesonoutwardprocessingbefore
theendof1978.

-14-
CONCLUSION
1.Itistheundertakings that will have to "bear the "brunt ofthe
necessary effort toadapt thetextile and clothing industry tothe
conditions ofinternational competition .Ifthey are tosucceed they
must beable tocount onalead from ,and support "by,thepublic
authorities .
2.Inthis paper the Commission has set out itspolicy proposals .
Itisembarking onaprogramme ofconsultations tohelp itdefine
operational proposals forimplementing thepolicy guidelines for
submission tothe Council .
3.TheCommission considers that ,given thesituation ,this would ,be
aparticularly suitable time forholding apolicy debate .

Ill/1155/78–
ΑΪΓΝΕΧI
ECONOMICASPECTSANDSTATISTICS
Theraisond'Streofthetextileandclothingindustriesistoprocess
naturalandsyntheticfibres,mainlyintofinishedproductsfordirect
consumption (clothing,householdlinen,furnishings )and,toalesser
butgrowingextent,intosemi–finishedproductsusedbyotherindustries.
Prominitialprocessingtofinalworking,thetwoarethereforelinked
byacommoneconomicinterestwhichjustifiesregardingthemattheoutset
asasinglecompositebranchofeconomicactivity#Consideredbyitself,
however,thiscompositebranchisextremelyheterogeneous :itscomponent
industriesareShapednotonlybythetechnological andeconomicconstraints
characteristic oftheprocessingorworkingstagewhichistheirplacein'
thetextilechain,butalsobyhistoricaldevelopments whichcreated
particulartradinglinks.Thuseachcountryhasawoolandacotton
industry,eachwiththeirowndistinctivefeatures,althoughthetechnological
stepsinvolvedarefairlysimilarandbothareusinganincreasingproportion
ofsyntheticfibresasrawmaterials.Similarly,somecountriescamstill
besaidtohaveasilkindustry,althoughitisinvolvedinmanyactivities
which,inothercountries,'areanintegralpartofthecottonindustry.
Thismeanstreadingcarefullyinanysortofsystematicapproachtothe
textileindustryandalsothatacursorypresentationwillinevitablybe
somewhatarbitrary.

-2-
Inthis paper theonly distinction cade is "between those twolarge and
distinct branches ,thetextile industry andtheclothing industry .
Nevertheless ,inthetextile industry attention must also bepaid to
afewofthesubsidiary industries -thewool-type industry ,the
cotton-type industry andtheknitting industry .Thefirst twodeal
with almost the entire volume offibres atthe spinning andweaving
stages ;thethird subsector -using ahighly integrated method of
operation anditsowncharacteristic technology which sets itapart
from other textile industries -essentially produces finished articles
which account for alarge proportion oftheclothing market .
The Community textile industry 'ssupplies and the use made ofits products
TheCommunity textile industry processes approximately 3,2 million t/year
oftextile threads andfibres ,including :
therest ismade upofvarious natural fibres such assilk ,flax ,hemp ,
jute and other hard fibres .
Whilst theEECimports alltherawcotton andalmost allthewool it
processes ,itisanetexporter ofsynthetic threads andfibres .
Thedistribution ,perconsumer sector ,ofthematerials processed isas
follows :385000 tofwool ,i.e. 12$
904000 tofcotton ,i.e. 28%
1911000 "tofmanmade fibres ,i«e «60%
Clothing :
Domestic uses :
Industrial uses :51%
33$(12%thereof incarpets )
16%(3%thereof intyres ).
In1975 (Source :CIRFS Year Book for 1977
CIKFS Year Book for1977 .

-3-
II*Sizeandeconomiccharacteristics ofthetextileandclothingindustries
(a)The,rel.a;tive_irr^£r£anc£ £f_the£e_industrie_s £ornpar_ed_wi_th manufa£turin£
_indu£tri£s_a_s awhole.
Takentogether,thetextileandclothingindustriesstilloccupyan
importantpositionasregardsbothemploymentandaddedvalueinthe
manufacturing industriesoftheCommunitycountries.Thisisshown "by
thefiguresinTablesIandIIbelow.
TableI
Employmentinthetextileandclothingindustriesasapercentageof
employmentinallmanufacturing industries
(SOECindustrialsurveyof1975–establishments employingover20persons:
cfTableÏIl)
EECDPINLBLUKIRLDK
Textileindustry (6.9)4.67*39*5(6.0)(10.6)-7.23.2
Clothingindustry (4.3)3*24.65.2(3.7)6.71.44*33.0
Textilesandclothing(l1.2)7*8.11.9.14-7-'(9-7)-07,3)11-5 6.2
TableII
Addedvalueinthetextileandclothingindustriesasapercentageof'
addedvalueinallmanufacturing industries
(1975industrialsurvey«•establishments employingover20persons)
DpINLBLUKIRLDK
Textileindustry 3.85.26.9(4.0)(6.2)4.1((8.1)}3.1*
Clothingindustry 2.22.52.9(1.7)(2.9)2.3((3-8))2.0
Textilesandclothing6.07.79.8(5.7)(9.1)6.45.1

\
J TABLEHitNumberofestablishments and.jobsintextileandclothingindustriesin1975
(establishments employingover20persons)*
•000sp.e,"thousandsof
personsemployed
Wanufacturing industries
Estab.•000sp.e.Textileindustry
43Ofwhichwool-type
431
Estab.
31240
26510
23677.
5116
6154.
165■
89430
(3394)
29917260
4780
366o
930
..V°
46
7.510
(210)
3301.872
2039
3307
306
(7X4)
3808
177
(194$00)'(25710)'12.223"
I IOOOsp,e
358
328
352
54
95
551
(26)
12
1-776Estab»000sp.e
159
282.
696
103
.(80)
852
(51)
16
223938
47
77
26
(16)
95
(7)
1
307Ofwhichcotton-type
432
Estab.000sp.e,
375
303
436
(89)
596
(23)
9
1831Π5
77
93
(23)
105
(3)
1
417Ofwhichknittedand
crocheted ,goods43^
Estab#
711
'552
1117
76
(202)
2322
93
30730003p.e.ClothingmouBtiy
453
Estab.!*000sp,e
98
83
87
11
(14)
259
(12)
51818
1748
434
(725)
11
6229
194250
207
193.
33
(60)
Ο.ΐ
333
(17)
11
5691133761104
I
1974figures
21973figures
ExceptfortheUnitedKingdom,forwhichallestablishments havebeeninoluded.

1
-5-
(b)£ntablis]yn£nis_aiid_j.2bs
ForeachMemberStateTableIIIgivesthenumberofestablishments and
personsemployedinthe,textileindustry(withdetailsforthewool,cotton
andknittingindustries)and'theclothingindustry.Forpurposesof
comparison,theTablegivesthesamedataforallmanufacturing industries.
Thefiguresaretakenfromthecoordinatedindustrialsurveyconductedby
theSQEC.Astheycoveronlythoseestablishments employingover20people,
theydonotexactlyreflectthecompletepictureinthetwobranches.
Thefiguresgivenforthetextileindustry,areonlyslightlylowerthan
thetruefigures,butthisisnotsofortheready-madeclothingsector,
ascanbeseenfromTableIV*
TableIV
Structureofclothingundertakings incertainMemberStatesandcorresponding .
/numbersemployed ■
D(1975) Ρ(1974)I(1971) Β(1974)
Establisments
employingNumberof
establish -
mentsNumber
-employedHumberofNumber
establish–employed
mentsNumberof
establish-
mentsNumber
employedNuiaberof
establieh–
imentsNumber
employed
Prom1to9
wage-earners 21819143 90482145111
Prom5"to9!
wage-earners ! 280 1564
Prom10to49
wage-earners 2577664531718416994250!
8767677118278
XII
•stablishments6462296628.I
2596217525
(morethan10
wage-earners )95832416447140966512

TABLEViEconomiofeatures
Turnoverperpersonemployed,
in*000EURValueaddedperpersonemployed,
in*000EURTotalwagesasaproportion
ofaddedvalue
(gross–costoffactors)
– 1
Cou-'i+ry jI
Manufacturing
industriesTextiles ClothingManufacturing
industriesTextiles ClothingManuf&cturing
industriesTextiles Clothing
-i
!29.7 ,f
t•
,22.2I
16.3 (14)(10) (7.7)(59$)76.22 70$
?
.24.8,j!19'>12.5.■f
11.3.9.1 5.8(63%)εο.5ί 8i^'•■
I
iI
22.2
I15.6
l.10.3
'i8.1 5.9 4.5 (71%)76.3%
!'!87%'"
I•
Jtl 1
I\
36.6 ■
II
I
24.5• i
17.2 |12,3.8.6 5.8"im•_82.5^ 84%
.i
Β'
. •I21.7I
!11,8
I- i7,3••--I
5,4|70.6%*I70,2%
Lv" I
( !
i-..i
-I5$..''_t
.■•, •••'
UKI"- 'l
|17.1.1
I a'•■I
13.4 II
Ir™
1IΜ ιI I
I4,8•j
! II
I.-.3.4I
it#
II(79.$)»
i•i- .'
|•,7#..
i
ÎRL'
-•!I
»•I- ■!
1..
■I
DK-i
Ii23.0
II
23,3
ι! I
15.4•|
| I;· ι
9.9·:-°·.I
iI.6,9
ιi
i j80.6£8
_iι; i
1
i iι
ι
r L..•
It. •'
I''

-7-
(c)Ec£n£mic_f£ature£ of_the_textil;e_a2d_c]_ot_hi.n^i_ndu_stri^s
A"briefsketchoftheeconomicfeaturesoftheseindustries canbeobtained
bycomparingsome,ofthebasicdataforthesesectorswithcomparabledata
formanufacturing industryasa.whole.
ThedataselectedandgiveninTableVareasfollows:
-turnoverperpersonemployed;
-addedvalueperpersonemployed;
-totalwagesas.aproportionofaddedvalue. -•
TableVshowsthatthetextileindustriesasawhole,andparticularly the
clothingindustry,arelabour-intensive comparedwiththeaverageforthe
manufacturing industries.-
Thelabourforceislesswellpaid,thanonaverageinmanufacturing
industries ,ascanbeseenfromTableVI.,
TableVI
Grosswagespaidtowage-earnersin1974('000EURperperson)
y
DFIMLBLUKIRLDK
Manufacturing
industries 6*55.24.26.7
Textiles 4.84.23.35«54.0
Clothing 43.-32.83.93.03.9.
3..4
2.27.4
6.1
.5-3

-8-
dTheCommunitynarxetmdtradewithron-£oraiiurii_tv countries
Thevalueofthemarketforalltextilesand.clothingisnotdirectlyknown..
Toobtainanideaofthequantitative relationship "betweenproduction and
themarket,however,thevalueoftheCommunitymarketcanbeassessedby
assumingthatitrepresentsCommunityproductionless/plusthebalanceof
tradewithnon-Community countries.Theresultofsuchanassessment ,
basedondatafor1975,isgiveninTableVII.
TableVII
AssessmentofthevalueoftheCommunitymarketinclothingandtextiles
in1975(inmillionEUA)
Textiles
ClothinrTurnoverof
EECindustry
26000Exportsoutside
theEEC
227003422
1411Importsinto
theEEC
2641
2828Balanceof
tradewith
non-
Community
countries
+761
-1417Apparent
valueof
EECmarket
25200approx.
24100approx.
\
1TACE43less80fiofITACE436(Clothingandknittedgoods).
NACE453plus80^of}!ACE430(Clothingandknittedgoods).

-9-
.Thetable,inwhich"thedataisexpressedintermsofvalue,showsthatthe
"balanceoftradeispositive fortextilesandthatthe
Communitymarketabsorbsmostofthedeliveries ,andhenceoftheproduction ,
ofitsownindustry.Whereclothingisconcerned,thebalanceoftradeis
indeficit,butthenet'importsrepresentonlyarelativelymodestshareof
theCommunitymarket.However,thisisanoverall ,viewofamarketinwhich
thesituationvarieswidelya.tthelevelofindividualproducts,forsomeof
whichthepenetrationrateofimportsismuchmorethan3C<fc.
III.'Trendsinthetextileandclothingindustriesinthslastfewyears
(a)Employmenttrends
TablesVIIXandIXgivetrends^.nemploymentintheMemberStatesbetween
1970and1976.The1twotablesshowclearlythedropinnumbersemployed
intextilesandclothing,the,dropbeingmoremarkedinthetextileindustry,
particularly between1973-"thelastyearofeconomicprosperity-and1975«
(b)Tre_nds_inproduction
TablesXandXIshowthe-trendinproductionfortextilesandclothing,as
indicatedbytheindex,betweenthelastyearsofeconomicprosperityand
1977. •
ThetrendintheCommunityindexshowsthat,forbothtextilesandclothing,
productionhasnotyetregainedthe1973level.

-10-
TABLE.VIII
Employmenttrendsinthetextileindustry
Personsemployed,inthousands
1970197219731974197519761977
D- 448425387351338328
Ρ 406398387363353341
I 377374364345(335317
ML 645957514743
3 888783747163
L
UK- 524518504458454448
Irl 232322192020
ΙΚ 222118161615
ESC■ï
(2125)195019051821167816351577
TABLEIX
Xiir.ploymenttrendsintheclothingindustry
Personsemployed,inthousands
1970197219731974197519761977
D362350302280263(256)
Ρ 307304290280280280
I 207,216220211(206)106
KL. 494435292623
3 656664595348
L 0.70.70.70.60.60.5
UrC 340327322307303295
Irl. 171716141212
DK .181814141313
(l340)136613431264119611561123

-11-
•TABLE X
Textile production indices (1970 -=100)
'1972 1973 1974 1975 1976 ■1977
D 108.6 108.8 103-0 99.5 107.7"106,0
? . 119 .3 113 .1 110,4 98.6 106 . 104 .5
I 106.3 114.8 112 .7 104.4 •122.2 117 .4
JTL 96.8 96.0 93-4 78-1 -y 80.8 79-9
Β 106.3 '106.1 100.7 86.4 96 84-2
L
uïc 101,8 I0S.6 96.0 90.9 94.2 91.8
IRL 110 .1 125.8 119.8 II0-.9 126,7 137.3
DK 112 .4
EEC 108.6 110.0 ;105.2 97«5 106.8 103.8
TABLE XI .
Clothing production indices - -
■1972 1973 .1974 1975 1976 '1977
Β ,107.4 100.3 92.0 93.8 91.4 88.5
î
NL .#- '
97.3 86.2 ::75.7 68.6 62.2 56.4
I 91.9 93.0 .92-5 , 85.1 104.7 .IOI.l
3 •'124-8 125.1 X3I.5 130.1 125.7 II9-4
L 131 .0 148.2 145-2 122.1 112 .a 97.3
UK 109.7 117 112 .4 .I&.Q 113.5 118.5 .
IRL.•
UK« -
EEC 104.7 103.8 99-4 98.4:101 100.3
usa 108 116 ,113'106 U28 )
Japan • 103 1X7 . ' 105 ..97 •105 .

-12-
Nevertheless ,there arefairly large variations inthetrend indifferent
countries .Thevery marked drop intextile production ,particularly
clothing ,intheNetherlands isparticularly obvious .Ontheother hand ,,
there hasbeen some growth ,inspite ofthecrisis ,inItalian andIrish
textile production .These facts illustrate individual tendencies for
each ofthese countries :intheNetherlands the textile and clothing
industries arebecoming less important andthecrisis hasmerely hastened
thetrend .InItaly ,ontheother hand ,where thetextile andclothing
industries arestill amajor component ofmanufacturing industry asa
whole ,acertain revival began in197& .
Asstated inthememorandum ,thecrisis isduetothecombination ofa
marked slowing down ofmarket growth following the economic crisis and a
large increase inimports .
(c)Re£ent_d £V£lopment _sin_the_market _:
Wesawearlier that 5OJ0 semi-finished textile products were intended
forthemanufacture ofclothing .Anexamination ofexpenditure onclothing
over the last decade shows that the amount spent byhouseholds onclothing
asaproportion oftotal expenditure isdecreasing .What ismore ,clothing
isone ofthe' first items onwhich consumers cutback when their purchasing
power stagnates oreven declines .Itistherefore obvious that one result
ofthecrisis ofthe last fewyears hasbeen anoticeable decrease in
purchases ofclothing .What ismore ,consumers ,attracted bythelowprices ,
\have bought more products from non-member countries .This hasdirectly
restricted theCommunity 'sclothing industry market andindirectly the
Community 'stextile industry market ,whose natural customer istheclothing
industry .

ΛTABLBXII " "•
COMMERCEDELACE(EUR9)-CST65Fils,tissus,art.conf.entissus_Tarn,fabricandcad?uptextiles
EECTRADS CST641Vêtements -Clothing
CSTf-Originereso.- IvPORT - . EXPORT . ■'.
destination Ien1QÛÛtonnes valeursMioUCE en1000tonnes valeursMioUCEI
μ757677757677-757677JLJ7677-
£1Extra-CE 9921234
♦23,4!120927603752
♦35%4083
♦8%10611167
♦9/9%1184
+1,4*40134801
♦19%5322
+102
Classe1 496611
♦23%561
!"8,2%1536
*2041
♦32%2169
+6%•587657
♦11,8%653
-0,55X23542867
♦21X3112
+8,5X
Classe2 386486
♦25,8X\.
521
+9,2X9441352
♦43X1537
+13X321351
♦9,4%*
398
+13,5X1050
♦20%1271
+20%i
1612
+26,8X
Classe3– 104--136
♦13,1X127-
-7,6%-255-356"
+39,6%377~
+5,9X153159
♦4X132*
-17X•607662
♦9X"596
-10%
841Extra-CE 349424
♦21,6%413
-2,7X30944257
+37,6%4591
+7,8%96105
♦10%■115
♦9X1556 !
|
l
i'I
1975
♦26,9%2476
♦25%
Classe1 86106
♦23X106.
-0,3X10521373
+30,6%1515
+10%6172'
♦18%
ιI
76
♦5,8X11711481
+26,5X1796
+21X
Classe2 211253
♦20X252
-0,6%16112354
+46X2526
+7,3X2826
♦7%32
♦22%308407
♦31%594
+46%
Classe3 5165!
♦26,8%55
-14%419529
♦26%550
♦4%.'*
i
*I7
♦6,7%6
-6,4%7787
-♦12%85
-1,5%
.officeStatistique
delaCommission des
Coranvunautés Européennes

AnnexII
THETEXTILEIMPORTSREGIME
1.TheConuranityhasnegotiatedagreementswith23supplying
countrieB,arrangements havebeendevisedfor6countrieswith
whom::thaspreferential agreementsandithasestablished
unilateralregimesforTaiwanandthestate-trading countries.
Atotalof40countriesareinconsequence coveredforthe127*
categoriesoftextileproductswhichhavebeenestablishedto
grouptogetherthe900orsoNIMEXEpositionsinthetextile
chapteroftheOCT. %
2.Thebilateraltextileagreementsnegotiated bytheCommunity,
andtherelatedarrangements drawnupatthesametime,establish
thefollowingregimesforeachcategorycftextileimports
originating inlow-costcountries.
i)either:quantitativelimitsforeach'categoryofsensitive
productsfromthosecountrieswhicharemajorsupplierswithin
thisproductcategory(theselimitsarebasedontheactual
importsfor1976withallowanceforamoderategrowthrate;
foreightextremelysensitivecategories,theselimitsare
containedwithin"internal"globalceilings)•
ii)or;amechanismforpotentiallimitationwithregardto:
–thesesamesensitiveproducts,butoriginating incountries
whicharelesssignificantsuppliers ;
-productswhicharelesssensitiveatthemoment,butwhich
couldbecomemoresensitive.
Illismechanism,knownas"exitfromthebasket",constitutes
aregulatoryinstrumentforavoidingtheundesirableeffects
ofapossiblebuild-upofimnorts.
*i'orstatetradingcountriesonly11categoriesarecovered,these
are1-8,12,15Band16.

-2-
3.Twoimportregimesaremoperation.Thefirstcoversproductsfor
whichquotas(definitivequantitativelimits)havebeennegotiated.
Quotashavebeensetforthemajorityofthe40supplyingcountries
forthecategoriesinGroupI,thesupersensitive products(cotton
yarn;cottonfabrics;man-madefibrefabrics;knittedt-shirts,etc,
knittedpulloversetc;trousers;blouses;men'sshirts).
?
Category 12345678
Noofcountriescovered 2428182624232622
%of1976importsextra
CEEsuppliedbythese
countries92.468.263.388.989.37374-696.6
%of1976lowcost
importssupplied
bythesecountries96.993.495.1
I90.393.87876.599
In1976GroupIaccountedfor53.3%byweightofallimportsextraCEE
ofGroupsI–VIcombined.(in1977i"twas51.4$byweight,and45.8^
inUCEs).

ForGroupXIproductsthanumberofcovartriesforwhichquotashavo
"beenfixedares %of1976importncovered.
byquotas
Cat NoofCcuntrier Extra--ECLow-cost
9 6 68.1 80.7
10"2 '89.0 97-5
11 4 76.7 83.7
12 12 75.1 86.6
13 7 79.4 84.8
14A 2 86.9 94.9
14B. 4 59-2 88.4
nA 4 85.8 92.0
15B 13 44.3 73.3
16 13 44.1 78.4
17 4 57.0 78.2
18·5 94«7 100.0
19 5 54.0 ■ 62.1
20 8 63.9 82.1
21 5
22 9 50.2 86.4
23 3 42.9 67.8
24 7 74.3 79.2
25 10 69.7 80.8
26 9 55.0 ■80.5
27 8 70.3 86.0
28 '4 ^1.5 72.3
29· 4 69.3 83.5
30Α 4 79.6 83.3
30Β 5 43.8 44.5
31 4 46.2 .75.1
GroupII59.5 81.6
In1976GroupIIasawholeaccountedfor16.8%"byweightofall
importsinGroupsI-VI(for1977thefigureis16.8%byweight
and22*8/0inUCEs)®GroupsIandIItogetherthuscovertwo-thirds
oftheECsimportsoftextilesfromthirdcountries.ForGroupsIII
toVIthenumberofsupplyingcountriesforeachcategorycontrolled
byquotalimitsislessbutinallcasesthemajorsuppliersofeachproduct
arequotacontrolled.
5«Thesecondimportregime,calledthebasketsystem,established
athresholdlevelforeachproduct,expressedasapercentageofthe
previousyearnsextra-CEEimports(*) notcoveredbya
quantitative limitforastatedsupplyingcountry.Thesethreshold
levels,whichcanoperateatCommunityorregionallevel,assurethat
eachcfthasupplyingcountriesisawareinadvanceatwhatlevel
ofexportstheCommunityislikelytofeelconcernedandmaydecide
toseekccrsultationsinordertostabiliseimports.(Thepercentages
are:Gjcup1-0.2%,GroupII-1.2%,GroupsIII-V-4%).
19/8tiirosiioldsarebasedon!9T7totalimports,or1976ifthesewere
hir':-r:

Theaveragegrowthratesforimportsunderquotafrom1978to
1982forthecategoriesinGroupIareasfollows:
Category1&2-accountedforbyincreasesfor1978ascompared
with1976;Category3-2.75$;'Category4-3$;Category5-4.1%\
Category6-3*1$';Category7-1«5$;Category8-1*6%.
ForGroupIItheaveragegrowthrateis4%forGroupsIIIandIV
itis6-8$andforGroupV(inwhichtherearefewcategoriesto
whichquotasapplyinrespectofsomemajorsupplyingcountries),
itisanaverageofItshouldalsobenotedthatimports
in1977declinedfromthepeakreachedin1976formostgroups
andinparticularinthehighlysensitiveones,GroupIandII.
(millionkg)
1976 1^21
GroupI768 694.
GroupII.242 228
GroupIII276 284 ,
GroupIV72 56..
GroupV75 81
GroupVI-8.6 7.8
Itisimportanttoensurethattheseregimesarefunctioning
properly.Thisrequiresconstantmonitoringoftrendsin v.
importstomakecertainthatthequantitative restraints and
otherprovisionsoftheagreementsandarrangements areobserved.
TheCommissionhassetupthenecessarymachineryforthis,"but
itssmoothoperationrequirestheclosecooperation ofthe
MemberStatesinthemanagementoftheseagreementsandarrangements .
Theseagreementsandarrangements havecreatedastableexternal
tradeenvironmentfortextileproducts.Itwouldbehazardous
intheextremetotrytopredictwhattheyamounttointerrasof
"penetration "levelsintheCommunitymarketfortextiles.Itis
necessarytotakeaccountofthegeneraleconomicperspectives
andoftheknownrelationship betweenthegrowthofGNPand-
thatofdemandfortextilesandclothingbuttorememberalsothe
cyclicalfluctuations inthetextiletradewhichdistortthetrend.
Keepingalltheseinmindsuggeststhe,admittedlytentative,conclusion
thattheprojectedgrowthinimports,assumingarigorousmanagement
oftheimportregimesestablished ,willoverallbeequaltoand
probablyexceedthelikelygrowthofinternaldemand.

111/1155/78-121 •
AnnexIII
Inviewofthesituationinthetextile/clothingIndustrydescribed
1
above,theCommissionconsidereditnecessaryin1971tolaydown
2theguidelines-andtosupplementthemin1977-underwhichit
reviewstheaidsgranted "by-theMemberStates.Theseguidelines
alsomakeitpossibleforKemberStatestotakeaccountofpolicies
wheneveritseemsadvisabletointroducestateaids.
Inparticular ,at.thetimeofdrawingupthesupplementtothe
approachtoaidstothetextile .industryin1977»"theCommission
considereditadvisabletotakeasitsbasisthetrendintheCommunity
industry,whichcouldbesummarizedasfollows:
–thetextile/clothingindustryischaracterized bychronic
economicdifficulties ,shrinkingmarketsandahighlevel
ofunemployment .
Thetextileindustryismoreacutelyaffectedbyproblemsof
employmentthanotherindustries ;importsfromoutsidethe
Communityandtheprocessingtrafficputincreasingpressure
ontheCommunitytextileindustry.
Doc.SEC(71)363finalof22July1971.
2Doct.S3C(77)317of25January1977,

-2-
Underthesecircumstances ,severalMemberStateshavebeenobliged
toapplyvariousmeasuresofstateassistancetotheirownindustry.
TheCommission,inreviewingthesemeasures,hasendeavouredto
ensurethatthenationalaidsgrantedtothetextile/clothing
industrydonothavetheeffectofsimplytransferringdifficulties
fromoneMemberStatetoanotherandcreatingnewsurplusproduction
capacity;. '
itnevertheless seemednecessary,inviewofthesituationnoted
above,todefinecertainguidelinestothe1971approachsothat
MemberStatesmaybeawareofthepositiontheCommissionisobliged\
totakewhenreviewingeachsectoralaidearmarkedforthetextile/clothing
industry:ontheonehand,toavoidexacerbating theproblemof .
overcapacity ;ontheother,toensurecoordination ofdecisions
affectingaidstotheindustry,whethersectoralofunderthe
varioustypesof'CommunityaidsuchastheRegionalorSocialFund,
orloansfromtheEIB.
The1977supplementtothe.approachsetsoutthe■Commission's
position,.especiallytakingaccountof:
-problemsofovercapacity, ' •,
–theneedforpossiblefutureaidstoenvisage;andmakepossible
redevelopment ;
–theneedtoexamineallassistancetothetextile/clothing
industry–whatevertheform–in.thelightoftheeconomic
situationthroughouttheCommunity,withinthesectororbranch
ofactivityconcerned.Thisrequirementisessentialparticularly
toensure.thatdecisionstakenforthesamesector,branchor
undertakinginthetextile/clothingindustry,whetherinvolving
>
nationalofCommunityassistance,aremutuallycompatibleand
consistent.

-3-
Therepresentatives oftheMemberStateswe'reconsultedingood
timeonthesupplementtotheapproach;followingthisconsultation ,
theCommissionforwardedittothevariousgovernments.
Whiletalcingaccountofthepoliciessetoutinitsapproach,
theCommissionhasonseveraloccasionsdefineditspositionwith
rospecttosomespecificbranchesofthetextile/clothingindustry,
byapprovingatoperationallevelthepolicylaiddowninitsgeneral
guidelinesfortheindustryasawhole.Thefollowingdocumentswere
issued:
-theCommissionCommunication ^concerningthecriteriafor
assessingtheintervention ofthevariousfinancialinstruments
andofcertainCommunitypoliciesinthetextileandclothing
sector:
4-theCommission Recommendation addressedtoMemberStates
concerningthetightsandstockingssubsectorofthetextile
industry;
-theletterof19July1977totheMemberStatesonstopping
aidstotheCommunitysyntheticfibresindustry.
Thesamepolicywasfollowedwhentherequestsforassistancefor
thepurposesoftheregionalandsocialfundswerebeingexamined.
JDoc„SEC(76)3017/3of2December1976.
Αi^CRecommendation 76/772(OJL265of29Sèptember 1976).