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COMMISSION OF THE EUROPEAN COMMUNITIES 
Brussels, 29.10.1997 
COM(97) 454 final 
COMMUNICATION FROM THE COMMISSION 
TO THE COUNCIL, THE EUROPEAN PARLIAMENT, 
THE ECONOMIC AND SOCIAL COMMITTEE 
AND THE COMMITTEE OF THE REGIONS 
Plan of action 
to increase the competitiveness of the European textile and clothing industry 

TABLE OF CONTENTS 
1. INTRODUCTION 3 
2. RECENT TRENDS IN THE TEXTILE/CLOTHING INDUSTRY 5 
3. THE TEXTILE/CLOTHING INDUSTRY IN THE CONTEXT OF COMMUNITY 
POLICIES 6 
3.1. Structural adjustment and competitiveness 6 
a)Innovation, research and technological development. 6 
b) New qualifications and vocational training. 8 
c)Integrated structural initiatives 9 
3.2 The internal framework 10 
a) The single market 10 
b) Discipline and transparency with regard to State aids ...11 
c) Employment 11 
d) Wage costs and social security charges 11 
3.3. External relations 12 
a) Promoting market access 12 
b) Rules and disciplines 13 
c) The environment 13 
d) The social question 14 
e) Internationalisation of firms and industrial cooperation 14 
4. CONCLUSIONS 16 
Annex: 19 
EUROPEAN PLAN OF ACTION TO INCREASE THE COMPETITIVENESS OF THE TEXTILE AND 
CLOTHING INDUSTRY (1997 - 2000) 
£ 
1. INTRODUCTION 
1.1 This communication is addressed to the Council and the European 
Parliament, to the ESC and the Committee of the Regions, in the light of the 
conclusions reached at the Industry Council meetings on 28 March and 
14 November 1996. It falls within the context of the talks which have been 
taking place, at the Commission's initiative, between the parties involved in the 
textile/clothing sector and in particular the national and Community public 
authorities and both sides of the industry. 
The purpose of this dialogue has been to carry out an overall assessment of the 
measures introduced by the European Union and the Member States to increase 
the industry's competitiveness, to consider what further steps need to be taken and 
to assess the restructuring/modernisation strategies implemented by the private 
sector. 
The two sides of the industry have produced a joint report reviewing the results 
achieved and setting out a series of further measures which might be taken at 
Community level. The primary objective is to further improve structural 
adjustment within the industry while giving all due attention to the problem of 
employment. 
The further measures suggested fall within the broad lines of the Commission's 
industrial policy and its policy on social and economic cohesion. 
1.2 The changes which have taken place in the industry in recent years have shown 
up many strong points but also a number of weaknesses. 
The industry has modernised by adapting to the new technological revolution. 
The competitive advantages arising from innovation, creativity, quality and 
know-how give it the potential to be a leader on international open markets. 
However, the drive towards modernisation in an increasingly competitive 
international environment has meant a considerable reduction in the number of 
jobs. This is particularly worrying in view of the regional concentration and 
social impact of employment in the textiles/clothing industry. 
1.3 The changes which have come about in the textile and clothing sector clearly 
demonstrate that it is not a matter of "traditional" industries competing with 
"high-tech" industries but that there are simply competitive and uncompetitive 
firms. 
The textile and clothing industry has considerably boosted its productivity and 
thus competitiveness in recent years, thereby proving that it is just as much an 
industry of the future as other economic activities. 
1.4 The broad outlines of the industrial policy pursued by the European Commission 
have been set out in recent communications.1 
These guidelines establish a general framework for industrial strategy in the 
textile/clothing sector. This strategy takes particular account of the specific 
features which characterise this branch of industry. The various measures 
taken in different fields of Community activity are all aimed at developing the EU 
textile/clothing industry's competitive advantages. An overall plan to make 
these measures coherent and effective has been drawn up on the basis of the 
contributions received. 
1.5 From the studies carried out by the textile/clothing working groups, it emerges 
that there are a number of priority areas for action by the parties concerned, 
i.e. businesses, employers' associations and trade unions, national and 
Community public authorities. 
The main priorities are as follows: 
- jobs and training, areas in which some of the solutions can and must be found 
within the industry but which also require action on a broader scale to ensure 
that jobs are created by the economy of the European Union as a whole and 
that potential employees are trained or retrained for new qualifications; 
- Development and the dissemination of new products, methods and 
equipment, of communications and information technology in the sector, 
including distribution, which proves to constitute a fundamental asset; 
- the proper operation of the internal market, while ensuring a high level of 
protection for consumers and the environment, should not place new obstacles 
in the way of the free circulation of goods. Legislation on public procurement 
and competition must ensure that the whole of the textile and clothing industry 
benefits from the single market; 
- access to the markets of third countries and strict compliance with the 
rules and disciplines which have been freely accepted under international 
agreements are an essential corollary of the globalisation of the markets and 
the liberalisation of Community imports; 
- regional development must involve giving special attention to viable firms 
located in less-favoured areas of the Union so as to create conditions which 
enable them to meet the challenge of competitiveness on an equal footing with 
firms located in more developed regions. 
Industrial policy in an open and competitive environment - Guidelines for a Community approach -
COM(90)556 final. An industrial competitiveness policy for the European Union - COM(94)319 
final. Benchmarking the competitiveness of European industry - COM(96)463 final. 
Benchmarking - implementation of an instrument available to economic actors and public 
authorities - COM(97)153 final. 
2. RECENT TRENDS IN THE TEXTILE/CLOTHING INDUSTRY 
The textile/clothing industry plays a major economic, social and regional role within 
the European Union. 
According to the Observatoire Européen du Textile et de l'Habillement (OETH),2 
this industry employs some 2.2 million persons in nearly 120 000 firms. It accounts 
for 7.6% of all industrial employment and 4.2% of the added value. Furthermore, a 
large proportion of the workforce is female and jobs are heavily concentrated in 
certain regions. 
During the 1990s, the industry has been seriously affected by a number of 
factors, notably the economic recession in Europe followed by a modest 
recovery, increased competition and technological advances. 
In general, the modest economic recovery in the European Union has not led to an 
increase in domestic demand: wages and salaries have risen only slightly while 
unemployment has increased, and both these factors have restrained the 
consumption of clothing and household textile products. 
At the same time, competition has bebome much more intense with the opening up 
of the Community market as a result of a number of preferential trade agreements, 
the implementation of the conclusions of the Uruguay Round of the negotiations and 
the presence of a number of major partners in international trade. In particular, the 
increased competition of low wage countries have created an important relocation 
movement of certain segments of production. 
Finally, technological advances, the increasing dissemination of Information 
Technology have made the industry more capital-intensive and have led to greater 
automation, particularly in the textile sector. They especially induced structural 
changes in the internal organisation of firms and in the operation of the industry as a 
whole. 
The industry's response to the scale of these recent challenges has been a 
thorough restructuring and modernisation, involving the relocation of its more 
labour-intensive operations which have less added value. This is well illustrated 
by the trend in Outward Processing Traffic (OPT): imports of clothing under OPT 
arrangements are steadily increasing and, in 1996, accounted for some 20%, in 
value, of all imports of clothing into the European Union. 
Generally speaking, productivity and competitive advantages have been 
increased, particularly in the areas of rapid response, "just in time" techniques, 
quality, creativity, know-how and innovation. The European industry is still the 
world's leading exporter of textile products and the third largest exporter of clothing 
products. 
The EU textile and clothing sector - OETH, Brussels 1997. 
However, this complex set of developments which have led to structural changes 
in the industry has brought in its wake a considerable reduction in production 
levels and, especially, in levels of employment. In the years from 1990 to 1996, 
production levels, at current prices, fell by 5.4% in the case of textiles and by 4.4% 
in the case of clothing. Over the same period, more than 600 000 jobs were lost, 
100 000oftheminl996. 
3. THE TEXTILE/CLOTHING INDUSTRY IN THE CONTEXT OF COMMUNITY POLICIES 
Under the Treaty on European Union, the public authorities must ensure, while 
respecting the principle of subsidiarity, that the conditions necessary for the 
competitiveness of the Community's industry exist. 
While it is the responsibility of the public authorities to create the right 
conditions in which businesses can become more competitive, it is the firms 
themselves which are primarily responsible for making the necessary 
adjustments. 
The textile/clothing groups set up by the European Commission have, over an eight 
month period, studied the measures introduced by the public authorities and the 
private sector in line with the following principles: 
- to promote a favourable environment for business so as to facilitate structural 
adjustment; 
- to ensure that the single market operates correctly and that the competition rules 
are applied; 
- to maintain an open approach to international trade and markets. 
3.1 Structural adjustment and competitiveness 
(a) Innovation, research and technological development 
Both sides of industry recognise that if the European Union is to remain a major 
producer of textiles and clothing, it is vital to continue boosting the industry's 
competitiveness through innovation, research and technological development. 
At the Community level, one has to stress the greatest mobilisation of the textiles 
and clothing industries with the aim of developing and in particular the use of new 
methods and equipment (such new machine concepts in weaving, new non polluting 
dyeing and ennoblement methods without effluents), new high value added fabrics 
(technical textiles, structural textiles with 3 dimensions and functional textiles ...). 
Their induced effects on employment in new job creation and/or in consolidation of 
the existing structures, are increasingly significant, thus contributing to the recent 
improvement of the level of competitiveness of the European textile & clothing 
industry. 
Thus, the Community RTD programmes have generated certain synergies and, in 
co-operation with industry, mechanisms for co-ordinating and participating in line 
with areas deemed to be the most important for the sector. 
At the heart of the 4th RTD Framework programme and within the specific 
programme "Industrial and Material Technologies", the targeted research 
project, Total Quality Textiles, appeared to be an effective instrument in 
strengthening the technological capacities of a structurally fragmented sector as well 
as succeeding in increased participation from SMEs. Approximately 350 
organisations of which 300 SMEs took part in research (with cofinancmg of ECU 40 
million from a total cost of approximately 80 million) in this specific programme. 
New machines ("ink jet", "plasma", "C02 supercritical"), new textile products whose 
traditional sector was in the area of Clothing/Furniture now have additional 
applications in the areas of transport, premises, health, leisure and have been 
developed under numerous Community research projects. 
The possibilities offered by the "Technology Stimulating Measures" intended for 
the SMEs (exploratory benefits helping to prepare proposals and CRAFT projects 
strengthening co-operation between SMEs to entrust technological problems to third 
parties) enabled numerous European SMEs to collaborate to develop new textile 
products, new methods of organisation, of production and work methods. Such is 
the orientation of the actions undertaken in the programme of "finalised socio­
economic Research". 
The ESPRIT programme has also helped bring about innovation in fields such as 
image data banks, decision support systems and electronic commerce in the textile 
and clothing sector. The industry has already begun work on preparing a project for 
applying and disseminating information technology in this sector. The project, 
designed to integrate a number of existing initiatives in the same field, provides for 
the development of a European communication and identification system for 
products and services based on voluntary standards validated by the industry. One of 
the advantages of this system would be the use, throughout the European Union, of a 
common language for electronic trading operations. 
The Programme of the 4th Innovation Framework programme supports 
industrial projects aiming to adapt and transfer technologies specific to certain 
regions or to certain sectors towards new regions or new sectors in the European 
Union; it brings together the producers (often SMEs or their professional 
associations) and technology users as well as research centres. A number of these 
projects concern the textile and clothing sector, such as "centrifugal spinning mill 
technology" and "flexible production at lower fabric sample cost". 
The Innovation programme also proposes various tools of interest for the textile / 
clothing sector: research studies of the needs and strengthens/weaknesses, or of 
scanning of the possible technological options, within the framework of its European 
Innovation Observatory; operations to raise awareness in new technologies for 
SMEs; European sectoral exchanges for the transfer of technology, access to new 
know-how and best practices in innovation management; using a network of 
innovation relay centres to put businesses in contact with one another. 
In the preparation of the 5th Framework programme, the current research 
guidelines in particular are related to the ambitions of the textile / clothing sector to 
improve companies competitiveness to maintain and create jobs adapted4n particular 
to sustainable development. Concerns are met in the key actions "Products, methods 
and organisation" of the programme "to encourage competitive and sustainable 
growth" as well as in the key action "New working methods and electronic 
commerce" of the programme "To develop a user-friendly information society". 
Priority should be focused on actions considered most directly essential for the 
competitiveness of the entire chain. It is for example the case in the actions 
encouraging the setting up of Quick response techniques, making it possible to adapt 
in real time the manufacturing processes to market trends and to reduce stocks. In 
addition to an improved adaptation to demand, these techniques, by giving a 
comparative advantage to the location of production in Europe, are likely to have a 
determining effect to reverse the negative tendency on employment. 
(b) New qualifications and Vocational training 
Structural changes in the textile/clothing sector, in particular the increasingly 
widespread use of information and communication technologies, mean that the 
workforce now requires new types of qualifications. 
Technological developments and their impact on the way firms are organised 
require the workforce to be trained in a much wider range of skills than was 
needed for the "production line" work so typical of the previous industrial 
revolution. 
Also in this field, national instruments and programmes together with the 
Community's ADAPT, EMPLOI and Leonardo da Vinci programmes provide 
opportunities for finding appropriate ways of meeting the needs identified. 
Via these programmes, the Commission is also trying to simulate the development of 
trans-national initiatives aimed at disseminating the best practices and know-how 
throughout the regions of Europe. These initiatives, enabling the dissemination of 
the positive results achieved, will certainly do a great deal to raise awareness, which 
in itself is very necessary and even essential in a fragmented sector such as the 
textile/clothing industry. 
A detailed study of the needs for new qualifications in the clothing sector was carried 
out in 1995 and a similar study for the textile sector is being planned. Moreover, as 
part of their sectoral dialogue and under the Leonardo da Vinci programme, both 
sides of the industry are preparing projects in the fields of versatility training and 
technical textiles. 
Training must also take into account the growing needs associated with globalisation 
and the internationalisation of production, which call for qualifications in the field of 
international business relations. Environmental aspects must also form a vital and 
integral part of vocational training. 
Training schemes must also be used to give the industry a more modern image 
where qualifications and technology are concerned - an image which reflects the 
present reality of the industry. 
(c) Integrated structural initiatives 
In response to the new challenges, the industry has undertaken a structural 
adjustment in which the two fundamental factors have been the reinforcement of 
specific competitive advantages, particularly with regard to investment in 
intangibles, and an improvement in productivity - itself linked to both tangible and 
intangible investments. 
To improve its response to market requirements, the industry has developed a 
"vertical" system of operation in which the concept of a network is essential, in 
particular, for SMEs. 
The vertical approach has created new requirements for increased flexibility in 
production, the dissemination of new techniques, swift reaction to market trends, the 
adoption of high quality standards and ecological considerations. 
Integration of the industry also makes it increasingly possible to exploit 
complementarity and synergy within this sector by means of industrial 
cooperation schemes and, in particular, subcontracting. In this connection, the 
Commission has sent the Council, the European Parliament, the Economic and 
Social Committee and the Committee of the Regions a communication on 
subcontracting in the textile/clothing sector.3 On the basis of this communication, 
and of the conclusions adopted by the Council, a strategy for boosting the 
competitiveness of subcontracting activities has been introduced in close cooperation 
with both sides of the industry, and pilot projects are being implemented (SCAN: 
Subcontracting Assistance Network; IBEX: International Buyers' Exhibitions; 
revision of the subcontracting nomenclatures; practical guide to the legal systems 
governing industrial subcontracting in Europe; partnership guide for industrial 
subcontracting). 
A number of instruments are available for backing up and supporting structural 
changes. At European Union level, the Structural Funds and the Cohesion Funds 
play a pivotal role in these fields, especially in regions where investment costs 
arising from geographical location and infrastructure requirements are higher. In 
particular, considerable assistance is being provided by schemes to boost the 
competitiveness of SMEs (via the SPD etc.) and via the Community's SMEs 
initiative programmes, the RETEX programme, etc. 
The evaluation of the programmes promoted by the Structural Funds, which the 
Commission intends to undertake early next year, will show what adjustments may 
be necessary to improve their impact on the sector. This is a response to the 
The competitiveness of subcontracting in the textile and clothing industry in the European Union, 
COM(96)210 final, 15 May 1996. 
industry's request that a table be drawn up showing the most successful projects, 
with a view to disseminating the best practices. 
3.2 The internal framework 
(a) The single market 
Intra-Community trade accounts for most of the textiles and clothing produced 
in the European Union. In 1996, intra-Community consignments were worth 
ECU 53.4 billion, while exports to non-EU countries amounted to ECU 30.3 billion. 
The completion of the single market meant the disappearance of a whole series of 
administrative procedures (frontier controls, verifications of origin, etc.), and this 
greatly benefited. the industry by making it easier to adapt flexibly to market 
requirements and by reducing costs (in particular administrative and transport costs). 
Recently, new national legislation on textiles and clothing has been introduced for 
the purposes of protecting consumer health and the environment. These initiatives 
relate, in particular, to the use of certain chemicals (such as azo dyes, 
pentachlorophenol, formaldehyde and heavy metals) in the treatment of textiles and 
clothing products. 
The proliferation of national legislation, which sometimes differs in several 
respects, risks creating new technical obstacles to the operation of the internal 
market. Commission staff are considering what measures should be taken to set up 
a framework which would ensure not only consumer and environmental protection 
but also the proper operation of the internal market. In some cases (azo dyes and 
pentachlorophenol), harmonisation at Community level might be sufficient, whereas 
in other cases (formaldehyde and heavy metals) the risks seem to merit further 
analysis. 
Promotion of the European eco-label for bed linen and tee-shirts and the 
introduction, in the near future, of a similar label for textiles constitute, together with 
the initiatives promoted at national level, an effective instrument for environmental 
protection while at the same time enhancing the competitiveness of the firms taking 
part in this system. 
The new action plan for the Single Market,4 put forward by the Commission on 
4 June 1997 and supported by the European Council in Amsterdam, proposes 
operational solutions. 
A Green Paper was published in November 1996 to initiate a discussion with 
the interested parties with a view to finding ways of improving the operation of 
the internal market in the field of public procurement. This Green Paper 
identifies, in particular, the limited impact of the rules on public procurement and the 
inadequate transposition of the directives by the Member States. An electronic 
information system for public procurement (SÏMAP) is also being developed. 
Action plan for the Single Market, Communication of the Commission to the European Council, 
CSE(97)1 final, 4 June 1997. 
10 
(b) Discipline and transparency with regard to State aids 
The completion of the internal market requires greater stringency in 
competition policy. 
The Commission is thus faced with the need to ensure rigorous discipline and 
genuine transparency where State aids are concerned in respect of all sectors of 
economic activity. Discussions with the Member States show that there is broad 
support for a multisectoral framework for regional aid to major investment 
projects. This framework will be applicable to the textile/clothing sector, thus 
meeting the need - frequently stressed by both sides of the industry - for a strict 
control on aids in this sector by means of a sectoral or horizontal framework 
including notification thresholds suited to its particular characteristics. 
In this context, the Community frameworks of aid for the RTD, for training and for 
the SMEs as well as the guidelines of aid for employment have to be considered 
attentively within the context of support measures for the competitiveness of this 
industry. 
(c) Employment 
The loss of more than a quarter of the jobs between 1990 and 1996, and the 
pattern in which this continues, constitutes a major concern of the Community, 
strengthened by the regional concentration of the losses of these jobs. Their 
economic importance and their social impact clearly exceed possibilities of European 
industry, and consequently are entwined within the framework of European Union 
employment policy. 
The measures and guidelines envisaged in particular for support of innovative 
companies, within the framework of the conclusions of the Amsterdam European 
Council and in particular of the forthcoming Luxembourg European Council on 
Employment, as well as any policy of the Member States for employment, should 
therefore take care to take into account the specific requirements of this sector. 
The Commission welcomes in this respect the negotiation of a "confidence pact for 
employment in the textile / clothing industry", which would stress training and the 
reduction / organisation of working time, and would thus allow encouragement of 
concerted measures, in compliance with the rules of competition in force. 
(d) Wage costs and social security charges 
Within the textile/clothing industry, certain highly labour-intensive sub-sectors are 
particularly vulnerable to the impact of indirect labour costs (social security 
contributions and direct tax on incomes). 
The handicap this represents vis-à-vis our main competitors is considerable and 
increasing. In spite of the well-known budgetary problems this would create, the 
11 
Commission has repeatedly argued in favour of reducing indirect labour costs,5 an 
approach which has been confirmed by a number of European Councils. 
The adoption of specific measures to alleviate indirect labour costs in the sector so as 
to promote employment and competitiveness must comply with the obligation not to 
distort competition.6 
In accordance with the Treaty rules on the subject, and with the principle of 
subsidiarity, the Commission considers that the problem should be looked at in 
greater detail, in cooperation with the Member States and both sides of 
industry. In the context of the talks between the two sides of the textile/clothing 
industry, any proposal regarding the organisation of working time and flexibility will 
be carefully examined by the Commission. 
3.3 External relations 
(a) Promoting market access 
The European Union attaches great importance to maintaining a link between 
inclusion of the textiles/clothing sector in the WTO rules and compliance with 
the undertakings given by the contracting parties. 
This approach also inspired the market access strategy for the European Union, set 
out in the Communication of 14 February 1996,7 which aims to be more aggressive 
than in the past. 
The slowdown in internal demand for textile/clothing products in recent years and 
the increased competition from imports make it vital to develop exports, especially 
to countries where the market has potential for growth. The trend in Community 
exports to the most open markets, where the European industry is up against 
global competition, shows that the Community industry has the capacity to be 
competitive. The EXPROM initiative has yielded positive results. The 
Commission will continue to seek ways of improving information on national 
initiatives in the short term and, if necessary, to play a co-ordinating role. In 
addition, any proposal put forward by the industry for long-term promotion 
initiatives will be considered. In this connection, the Commission could consider 
whether it would be effective to set up textile/clothing industry representation 
offices in one or more countries which offer particular potential for exports. 
5 White Paper: Growth, Competitiveness, Employment -Brussels 1993. 
6 These matters are being studied by the Group on Taxation Policies (the Monti Group) in accordance 
with the guidelines issued by the Dublin Council (December 1996) and by the ECOFIN meeting on 
1 1 November 1996. 
7 The global challenge of international trade: a market access strategy for the European Union 
COM(96)53 final, 14 February 1996. 
12 
Some non-Community countries are maintaining or creating unjustified tariff and 
non-tariff barriers to protect their markets. The most striking examples are 
Argentina, China, India, South Africa and the United States. This protectionism 
does not favour the development of trading relations. It is often contrary to the 
obligations laid down in the various agreements signed as part of the Uruguay 
Round and, above all, contrary to the Agreement on Textiles and Clothing 
(ATC). 
To improve the effectiveness of Community commercial policy, the Commission has 
set up a data bank on obstacles to trade: it has become an operational instrument 
accessible to the economic operators. Cooperation between all the parties concerned 
is essential to ensure the effective and on-going operation of this instrument. 
(b) Rules and disciplines 
The Commission expects the European Union's partners to apply rigorously the 
agreements they have signed regarding the protection of intellectual property 
rights, subsidies, dumping and rules of origin. 
The globalisation of the markets and the progressive deregulation of the Community 
market require all the parties concerned to maintain conditions of fair competition. 
The Commission will continue to apply the instruments available to it, in compliance 
with its international obligations, in order to maintain a climate of healthy 
competition. Close cooperation between the Member States and the economic 
operators is essential for this purpose, as is clear from the procedure initiated under 
the Regulation on obstacles to trade (ROT)8 in respect of the United States' rules of 
origin. 
(c) The environment 
Protecting the environment is not only important politically and socially but also 
creates economic and employment opportunities. At the level of the individual firm, 
the costs of environmental protection are often seen as a handicap to international 
competitiveness. There are, nevertheless, real opportunities for firms which take a 
dynamic approach and integrate environmental considerations into their general 
strategy. 
The award of an eco-label to these firms is an effective way of promoting their 
image. In the discussions taking place within the WTO's "Trade and Environment" 
(EEC) Committee, the Community's aim is to maintain the integrity of the 
eco-labelling systems based on a life cycle analysis (the Community system) and to 
increase transparency both in their operation and in the establishment of criteria for 
awarding the label. This Committee, on which the Community will be 
represented, has recently commenced an analysis of the environmental impact 
of liberalising trade and on the commercial impact of environmental legislation 
8 Council Regulation (EC) No 3286/94 of 22 December 1994. 
13 
in the sector concerned. The use of labels recognised at a European or international 
level, covering both the materials and the methods used, could increase the 
competitiveness of these products while having a positive environmental impact. 
Moreover, companies must be encouraged, in particular through RTD programmes, 
to cope with the problems linked to the environment by increased use of "clean" and 
recycling technologies in order to take advantage of future economic opportunities. 
A particular effort in distribution of information at both producer and consumer level 
would be desirable to increase benefits as a result of actions in this field. 
(d) The social question 
The Commission has recognised the importance of respecting fundamental social 
rights in international relations. It has already set out its position on the link between 
trading agreements and internationally recognised labour standards,9 both in a recent 
Communication10 and in the appropriate multilateral fora such as the ILO and WTO. 
The Commission has stressed the need to promote compliance with 
fundamental labour standards while rejecting their use for protectionist 
purposes. These views are now shared at multilateral level by all members of 
the WTO.11 The Commission also notes that initiatives promoted by the economic 
operators, focusing on respect for social rights, such as the "ctëan clothes" campaign, 
have been welcomed by consumers. 
The Commission is currently examining those aspects of the social label which are 
linked to transparency, reliability and compatibility with the rules of international 
trade. This analysis will give the Commission an objective overview of the benefits 
and disadvantages of such an approach. 
(e) Internationalisation of firms and industrial cooperation 
For some years now, a growing number of European firms have been developing 
strategies for the internationalisation of their production with a view to increasing 
their competitiveness on all international markets. This strategy goes hand in hand 
with the process of adapting industrial activity within the European Union to meet 
the requirements of the production process in terms of high added value, rapid 
response and a short circuit. 
As part of its industrial cooperation policy, the Commission will continue to 
promote the development of a permanent and coherent framework for 
cooperation for mutual benefit and will do all it can to support a number of 
pilot projects based on existing instruments. 
9 There is now an international consensus on recognising a set of Conventions drawn up by the 
International Labour Organisation (ILO). 
10 The trading system and internationally recognised labour standards, COM(96)402 final, 24 July 
1996. 
1 ' Ministerial Statement issued at Singapore on 18 December 1996. 
14 
Stepping up cooperation on standards, administrative procedures and commercial 
issues may be an appropriate way to help develop the sector's international 
competitiveness within the context of market globalisation. 
For historical, economic and geographical reasons, the European Union is 
particularly interested in the situation in neighbouring countries, i.e. the countries of 
Central and Eastern Europe (as part of its pre-accession strategy) and the 
Mediterranean countries. 
More generally, consideration should be given to the actual opportunities provided 
by Community programmes (PHARE, TACIS, MEDA, ECIP, JOPP, EURO/MED 
PARTNERSHIP, BRE, BC-NET, etc.). Trade and professional organisations can 
play an important role in implementing the Community policy on industrial 
cooperation. 
15 
4. CONCLUSIONS 
4.1 The dialogue promoted by the Commission within the textiles/clothing groups has 
shown the benefits to be derived from complementarity and coherence between 
the initiatives taken by the two sides of industry, the Member States and the 
Community institutions. 
The two sides of industry, in their report, have made a number of 
recommendations. Among the subjects dealt with in this report, the 
Commission considers that particular attention should be given to jobs and 
training, and to the transfer of technologies, to the use of information 
technology, to the promotion of synergies between Community and National 
programmes in order to maximise the results, to the operation of the internal 
market and to market access. 
.When drawing up their initiatives, the two sides of industry should take account 
of the instruments available in the Member States and at Community level. 
The Member States and the Commission, while respecting the principle of 
subsidiarity, should work even more closely together so as to generate synergy in 
their support for the measures taken by the economic operators. 
4.2 The best guarantee of jobs in this sector lies in the dynamism of viable firms. In 
order to absorb jobs lost by the industry, the economy as a whole must 
generate sufficient employment. Nevertheless, levels of employment in this 
industry must be monitored with particular attention on account of their 
regional concentration and the fact that a large proportion of the workforce 
is female. 
Within the context of the conclusions reached at the European Council in 
Amsterdam, the provisions of the new Treaty Chapter on employment and the 
views repeatedly expressed on this matter by the Commission, there must be 
continued and detailed talks between the two sides of industry on the 
problems of employment. 
With regard to training, appropriate responses must be sought at national level 
and in the context of Community instruments. Continual training, covering the 
requirements in terms of new qualifications and retraining, remains a priority. 
Efforts must be made by all the parties concerned and, above all, by the firms 
involved. 
At Community level, the pilot projects currently taking place should result in an 
efficient dissemination of good practices. It should be possible to ensure that 
examples of success at Member State level are disseminated throughout the 
European Union to the benefit of the industry as a whole. 
4.3 The textile/clothing industry has had a certain amount of success with the 
increased use of new products, methods and equipment as well as with the 
application of information technologies. Nevertheless, these acquired 
16 
advantages do not sufficiently benefit the whole of the industry. There is 
insufficient awareness of the competitive advantages to be gained, particularly 
with regard to the organisation of firms and their response to demand. 
Bringing the whole of the industry, including distribution, within a single 
network considerably enhances its competitiveness and is of particular 
benefit to SMEs, which provide most of the sector's employment. 
It is vital that the private sector and the national and Community authorities work 
together so that the available instruments are used effectively to support these 
initiatives and to back up significant projects in this area. 
4.4 The internal market has been completed without major problems in the 
textile/clothing sector. Both sides of industry must work together to remove 
obstacles to trade arising from the non-application of the principle of mutual 
recognition. Nevertheless, a co-ordinated and integrated approach must be 
taken to the questions of environmental and consumer protection and to the 
proper operation of the internal market. Commission staff are currently 
examining these questions and the results of their deliberations will be notified, as 
soon as possible, to the Member States and both sides of industry. 
Where public procurement is concerned, the Commission, in cooperation with 
the Member States, is seeking an appropriate solution to the problems which have 
been seen to hinder the achievement of the objectives of Community policy in this 
area. 
4.5 The European Union's commercial policy must be such as to ensure that the 
markets of third countries are indeed open to textile/clothing firms as much as 
to operators in other sectors. 
The Commission cannot accept a situation in which the implementation of the 
European Union's undertakings with regard to the liberalisation of imports is not 
matched by a correspondingly greater ease of access for its own products to the 
markets of certain third countries. 
Moreover, given the globalisation of economic activity and a fortiori trade, the 
Commission must demand that the rules and disciplines accepted under 
international agreements are properly adhered to, and must promote the 
effective use of the instruments already available for defending European 
commercial interests, when the situation so requires. 
Continued efforts must also be made to include minimum environmental 
standards and the respect for fundamental social rights in international 
relations. 
17 
4.6 All the measures under consideration and joint efforts by the parties concerned 
should ensure that this branch of industry has a major role to play in the economy 
of the European Union. It will maintain its economic and social importance in 
spite of job losses. The changes currently taking place mean there is a trend 
towards high added-value and wealth-creating jobs. 
The Commission will do everything in its power to help improve the general 
economic climate, to adapt its instruments to present needs and to ensure 
that the strategies pursued have an overall coherence. 
The attached action plan must be constantly monitored. The Commission, in 
cooperation with the Member States, will continue its discussions with both sides 
of the industry to ensure that trends are continually monitored and that the action 
being taken is adapted to both structural and cyclical changes. 
18 
EUROPEAN PLAN OF ACTION 
TO INCREASE THE COMPETITIVENESS 
OF THE TEXTILE AND CLOTHING INDUSTRY 
1997 - 2000 
Recommendations from the two sides of Action 
industry 
INNOVATION AND INDUSTRIAL AND 
INFORMATION TECHNOLOGIES 
• The existing links between R&D,' • Steps have already been taken to 
innovation and , new technologies develop new products, methods and 
suggest that the complementarity equipment as well as the application of 
between the various initiatives in this information technology and electronic 
field should be exploited. commerce techniques in the sector. 
• To co-ordinate and ensure the 
dissemination of the results of research 
and their application in practice remains • A thematic network is to be set up for 
a priority objective. research purposes. 
EMPLOYMENT, SOCIAL SECURITY AND 
TAXATION 
• Tripartite cooperation to be stepped up • An ad hoc working group has been set 
(Commission, Member States, the two up on the basis of the Report on the 
sides of industry). development of tax systems in the 
European Union.1 
These topics will be tackled in the talks 
between the two sides of the industry. 
• More detailed talks on • A study on tax avoidance and the black 
creating/maintaining jobs, economy have been promoted by the 
reducing/reorganising working time, Commission. 
training and flexibility in the internal A Green Paper on this subject is being 
organisation of firms. drafted. 
• Initiatives recommended in the field of • A forum has been held on the 
tax legislation with regard to the transfer Recommendation on the transfer of 
of family businesses. SMEs (OJ L 385/94). The results will 
be summarised in a report. A 
Commission communication on 
follow-up action will be presented 
shortly. 
Taxation in the European Union : Report on the development of tax systems - COM(96)546. 
19 
Recommendations from the two sides of Action 
industry 
TRAINING 
• Training needs for new qualifications. • Training requirements in the clothing 
Internal training and retraining sub-sector have been examined in the 
programmes. talks between the two sides of the 
industry; a similar initiative is planned 
for the textile sector. A number of 
projects put forward by the two sides of 
industry are being considered. 
• SMEs in the sector must be given easier • The second stage of the ADAPT 
access to the existing instruments. programme began in January 1997. In 
autumn 1997, the new projects selected 
by the Member States will be 
implemented» 
INDUSTRIAL COOPERATION BETWEEN 
EUROPEAN UNION FIRMS < • 
• Continuation and monitoring of the • Current action on technical relations 
subcontracting programme between those who place the orders and 
(Commission Communication those who make them up; promotion 
COM(96)210 final of 15 May 1996 and (IBEX: International Buyers' 
conclusions of the Council meeting on Exhibitions); information (SCAN: 
14 November 1996. Subcontracting Assistance Network); 
statistics. 
• A practical guide to the legal systems 
governing industrial subcontracting in 
the European Community and a guide to 
partnership in industrial subcontracting 
will be available in September 1997. 
ENVIRONMENT 
Azo DYES - PCP 
• To ensure that ecological • The Commission will be involved in 
considerations are taken into account in the exercise which the WTO's "Trade 
making firms more competitive. and Environment" Committee has 
recently begun. Its aim is to analyse 
the environmental impact of the 
liberalisation of trade and the 
commercial impact of environmental 
legislation in this sector. 
20 
Recommendations from the two sides of Action 
industry 
• To encourage harmonisation of the • The desirability and feasibility of 
Member States' laws on azo dyes and harmonisation in this field is currently 
pentachlorophenol so as to avoid being assessed. This assessment relates 
creating obstacles to the correct to two matters, namely the health risks 
operation of the internal market. arising from the use of these substances 
and the effect which a ban on these 
substances would have on the internal 
market and in third countries. Directive 
76/769 is to be revised. 
PUBLIC PROCUREMENT 
• Measures to make legislation more • A Green Paper entitled "Public 
effective in practice Procurement in the European Union: 
exploring the way forward" was 
published in November 1996. 
• Action to ensure that the Member States • A communication is to be issued in 
have transposed the directives on public 1998 together with a plan pf action 
contracts. setting out measures for making the 
legal framework more effective so that 
the objectives of Community policy in 
this field can be better achieved. A pilot 
project has been sei up for a 
computerised information system for 
public procurement (SIMAP). 
INDUSTRIAL AND COMMERCIAL PROPERTY 
• Promoting measures to combat • On 13 March 1997, a common position 
counterfeiting and the copying of was reached on the Directive: 
designs and industrial models. COM(93)344 final. It will take between 
nine and 21 months to complete the 
codecision procedure. 
STATE AIDS 
• Introduction of a multisectoral • The multisectoral framework plan is 
framework, with a notification threshold being considered in talks with the 
suited to the particular characteristics of Member States. 
the textile/clothing sector. 
21 
Recommendations from the two sides of 
industry Action 
COMMERCIAL POLICY 
• Improving access to the markets of third 
countries. 
Compliance with the rules and 
disciplines and continued efforts to 
combat fraud. 
• Measures to promote exports 
More detailed discussion of issues 
connected with the social label. 
European firms to adopt a code of 
conduct In its international relations, the 
Commission will continue its efforts to 
promote market access. 
In collaboration with the Member States 
and both sides of industry, the 
Commission will apply the instruments 
of commercial policy available to it, 
whenever the situation so requires. 
• The Commission will strive for a better 
exchange of information with the 
Member States: if necessary, a 
coordination scheme will be introduced. 
Any long-term proposal will be 
examined in collaboration with the 
economic operators. Consideration may 
be given to setting up textile/clothing 
industry representation offices in third 
countries. 
• The Commission is currently examining 
those aspects of the social label which 
are linked to transparency, reliability 
and compatibility with the rules of 
international trade. 
• The Commission is considering the 
possibility of promoting a wide 
dissemination of the code of conduct 
among firms and consumers. 
22 
ISSN 0254-1475 
COM(97) 454 final 
DOCUMENTS 
EN 10 08 04 13 
Catalogue number : CB-C0-97-467-EN-C 
ISBN 92-78-24599-2 
Office for Official Publications of the European Communities 
L-2985 Luxembourg 
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