Opinion of the European Economic and Social Committee on the ‘Communication from the Commission to the Council, the European Parliament, the European Economic and Social Committee and the Committee of the Regions: The future of the textiles and clothing sector in the enlarged European Union’. (COM(2003) 649 final)
Date: 2004-07-01
Institutions: European Economic and Social Committee
Subjects: EU industrial policy, clothing industry, competitiveness, economic analysis, enlargement of the Union, textile industry

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Opinion of the European Economic and Social Committee on the ‘Communication from the
Commission to the Council,
the European Economic and Social
Committee and the Committee of the Regions: The future of the textiles and clothing sector in the
enlarged European Union’.

the European Parliament,

(COM(2003) 649 final)

(2004/C 302/19)

On 28 October 2003, the Commission decided to consult the European Economic and Social Committee,
under Article 262 of the Treaty establishing the European Community, on the abovementioned proposal.

The Section for the Single Market, Production and Consumption, which was responsible for preparing the
Committee's work on the subject, adopted its opinion on 4 May 2004. The rapporteur was Mr Pezzini and
the co-rapporteur was Mr Nollet.

At its 410th plenary session of 30 June and 1 July 2004 (meeting of 1 July), the European Economic and
Social Committee adopted the following opinion by 81 votes to one.

1. Introduction

The fact

1.1
that 2.1 million people continue to be
employed in the European textile industry is an indication of
the way its vitality has endured and of its great potential. This
figure has increased by more than 500,000 with the accession
of the new Member States. Thanks to considerable innovations
in the field of both processes and products,
the industry
continues to contribute to European wealth with an annual
turnover of over EUR 200 billion, not taking into account the
ancillary sector, and strong growth – particularly in the ‘non-
conventional’ sector (hi-tech technical textiles (1)) – which now
account for almost 30 % of all output and with R&D spending
approaching 8-10 % of turnover.

1.2
The European Union is the biggest world player in the
textile and clothing sector. The suggestion that globalisation
would inevitably sideline the textile industries of the industria-
lised countries has turned out to be false, and it is definitely not
the case in Europe. The European continent is still the biggest
exporter of textile products in the world and the second biggest
clothing exporter in a global
import-export market of over
EUR 350 billion in 2002 (6 % of world trade).

1.2.1
global exporter of clothing.

It is worth remembering here that China is the biggest

fast manufacturing and delivery times.

Europe has thus far managed to capitalise on its assets
1.3
in terms of quality and organisation: small ranges,
fashion
system, highly creative haute couture, quick to respond to
demand,
It has also
innovated in the area of processes and intelligent materials
thanks to nanotechnology and new fibres, i.e. technical textiles,
which are highly competitive and with a growing trade surplus.
Recent chemistry applications to textiles have lead to the crea-
tion of new products. It should be pointed out here that global
market access conditions vary widely in the sector. While the
EU applies customs tariffs of less than 9 % on average, many
other countries apply tariffs of up to 30 %, in addition to hefty
non-tariff barriers.

(1) ‘Technical textiles’ are increasingly applied in the following areas:
clothing, agro-technics, building, geotechnics, household technics,
industrial technics, medical technics, transport technics, environ-
mental technics, packaging technics, protection systems technics,
sport technics. See Appendix 2.

1.4
In Europe, the textiles and clothing sector has managed
to cope with series of radical changes and has been quick to
take advantage of new technology to find an appropriate
response to different production costs, reacting promptly to the
emergence of new global competitors. The reaction of Euro-
pean industry has been, on the one hand, a firm commitment
to modernisation achieved through competitive restructuring
and assimilation of technology; and, on the other, to occupy a
new market position by exploiting networking opportunities in
production,
technological
marketing.

distribution,

innovation

and

this went

1.5
In 2002 gross investment was approximately 9 % of
value added in the sector, or some EUR 5 billion. Naturally,
almost 70 % of
to the textile sector, while the
clothing sector received around 30 %. The textile sector trade
balance is positive, whereas imports exceed exports in the
clothing sector. Moreover, the textile-clothing sector, to which
footwear should be added, is a very diverse, composite industry,
with a vast array of products ranging from high-tech synthetic
fibres to wool processing; cotton to industrial filters; rags to
high fashion; and from carpet slippers to footwear designed to
protect against corrosive chemicals.

The textile, clothing and footwear industry is concen-
1.6
trated in the five most populated countries of the European
Union, and their companies account for over three-quarters of
European output in the sector. Value added is also concentrated
in these countries, of which Italy is by far the most important,
followed by the United Kingdom, France, Germany and, to a
lesser extent, Spain. Of the smaller countries, Portugal, Belgium
and Greece are particularly important in terms of value added.
Belgium is especially active in the field of technical and intelli-
gent textiles. As far as the new Member States are concerned,
the sector is particularly important
in Poland, Estonia and
Lithuania and in the candidate countries – Turkey, Romania
and Bulgaria.

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1.7
In terms of employment, the rate has declined by an
average 2.6 % per annum over the last five years. Spain and
Sweden are the only exceptions to this trend, with an increase
in employment (+ 2 %) in the sector between 1995-2002. As a
full player in market globalisation of the sector, the European
textiles industry has thoroughly restructured and streamlined its
companies, outsourcing the most labour-intensive operations
and focusing instead on more skill-intensive manufacturing
processes. Use of information and communications technology,
new technology and more efficient production methods has
also played a role here.

1.8 With regard to trade, import quotas are due to disappear
when the Multi-Fibre Arrangement (MFA)
is phased out in
2005. This means all parties will have to think hard about how
new trading conditions for textile products can be created, in
order to enable the European textiles industry to compete glob-
ally; and, at the same time, to guarantee fair conditions for the
poorest and particularly vulnerable countries. It is increasingly
clear that implementation of the Barcelona Process should be a
priority. This provides for an area of free trade between Europe
and the entire southern shore of
thus
making the pan-Euro-Mediterranean area a reality.

the Mediterranean,

2. The Commission proposal

2.1
The Commission communication addresses the complex
problem of the textile and clothing sector in a bid to boost its
competitiveness and dynamism, applying the Lisbon Strategy
specifically to the sector.

research and technological development,

2.2
The communication proposes measures based on indus-
trial and trade policies, with particular emphasis on employ-
innovation,
ment,
vocational training, regional development, sustainable develop-
ment, corporate social responsibility, public health, consumer
protection, combating counterfeiting, patent and industrial and
intellectual property rights, competition policy and state aid.

2.3
The Commission suggests some areas in which industrial
policy measures should be more efficient and more effective, in
particular:

— research, development and innovation, new materials and
intelligent materials, nanotechnology, new production
processes and cleaner technology, focusing on fashion and
promoting creativity;

— education and training: easier access to finance for SMEs
through streamlined procedures, dissemination of informa-
tion, coordination of action;

— development of networking potential and capacity;

— the Doha Programme, for the reduction and harmonisation
of customs tariffs and the elimination of non-tariff barriers
to trade;

— complete the Euro-Mediterranean area by 2005, in order to
provide free movement of textile products in countries with
the same rules of origin and administrative cooperation
systems;

— labelling systems for EU access: examination of label use for
labour

articles/products in accordance with international
and environmental standards;

— EU trade preferences: focusing on the 49 poorest countries
(LDCs - Less Developed Countries) (1), and extending prefer-
ential status to intermediate clothing products;

— combating fraud and counterfeiting, strengthening existing
measures and adoption of new measures to protect indus-
to avoid unfair
trial and intellectual property, checks
commercial practices; strengthening the common customs
system;

— ‘Made in Europe’ label of origin in order to promote Euro-

pean quality products and protect consumers;

— Structural Funds: use and new guidelines, particularly in the
framework of the Financial Perspective for 2007-2013.

In addition, the Commission communication suggests

2.4
some avenues to be explored:

— action at stakeholder level;

— action at Member State level;

— action at European Union level.

a High

establishing

It proposes

2.4.1
Level Group
comprising representatives from the Commission, the Member
States and the social partners, in order to check on the initia-
tives and their
the various levels. The
communication also provides for regular reports to be drawn
up between spring 2005 and the end of 2006.

implementation at

— corporate social responsibility: compliance with interna-
responsible

tional
management of industrial change, worker consultation;

labour and environmental

standards,

(1) There are 49 Less Developed Countries, of which 40 are ACP coun-
tries
(Africa, Caribbean, Pacific) and 9 non-ACP: Afghanistan,
Bangladesh, Butan, Cambodia, Laos, Myanmar, Maldives, Nepal,
Yemen.

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3. The viewpoint of textile industry representatives

The Committee held a hearing of textile industry representa-
tives at its building in Brussels on 21 January 2004. The views
expressed in this point reflect the written contributions received
and the statements made in the course of the hearing (1).

The social players present – employers,

trade union
3.1
representatives and local administrators – were unanimous in
calling for urgent action to cushion the extremely rapid impact
of imports from a number of countries, particularly China,
India and Pakistan, on European businesses in the sector.

As 2005 and the end of the quotas regime approaches,

3.2
the following measures were requested as a matter of urgency:

— the possibility of tapping new financial resources;

— a special intervention to be introduced within the Structural

Funds;

— investment in training and hence human resources;

— compulsory labelling of product origin for all countries;

— compulsory traceability at all stages of production;

— attention to consumer health through relevant labelling of

risk-free products;

— reciprocity in customs tariffs with countries developing

rapidly in the sector;

— a strong financial commitment to research and innovation
and assistance to businesses, especially SMEs, so that they
can diversify production to include technical and intelligent
textiles.

3.3
The Italian textile and clothing sector, which is one of
the most vulnerable in the European Union, presented a joint
document agreed by all the country's producers,
large and
small, and trade union representatives, highlighting a number
of priorities and recommending that these lead to practical,
effective and timely measures. According to the document,
inertia at this point in time could impose heavy social and
economic costs on Europe.

3.3.1

The main points were as follows:

Community products are granted 0 % rates in only 22
3.3.2
countries, while on other markets they are subject
to an
average rate varying between 15 and 60 %. Moreover, they
often run up against a plethora of non-tariff barriers. From
2005 onwards in particular, the textile and clothing sector will
no longer be able to bear the privileges currently granted to the
EU's largest competitors (China, India, Pakistan and Indonesia).
In any case, such privileges should be restricted to the least
developed countries and to small producing countries who in
2005 will themselves be placed in an extremely vulnerable
position.

3.3.3
It is hoped that labelling will avoid a generic ‘Made in
the EU’ for a more explicit ‘Made in Italy-EU’, ‘Made in France-
EU’ etc. formula. More than 60 % of products on the market
are already voluntarily labelled with the origin. If the wording
were to be made compulsory, checks on penalties would
follow: the wide leeway presently allowed opens the floodgates
to counterfeiting and fraud, which is doubly damaging to Euro-
pean industry. Furthermore, European buyers are at a disadvan-
tage compared to their American, Japanese, Chinese or Austra-
lian counterparts. There is no reason not to have the same
information as others, by means of compulsory labelling. If
European consumers were aware of product origin, they could
effectively judge not only the price, but also the price/quality
ratio in relation to their own requirements.

— review of agreements with third countries, removing tariff
concessions for countries infringing the rules of
trade,
social standards, and sustainable development or manufac-
turing nuclear weapons;

3.3.4
The link between textiles and health has been repeat-
edly demonstrated. Many skin conditions are triggered by use
of
reason for
allowing consumers to choose the area of origin of products.

low-quality textile products. This is further

— review of the organisation of European customs, in order to
simplify them and ensure more specific checks to reduce
fraud, now at an unsustainable level;

(1) The hearing was attended by Ms Concepció Ferrer i Casals, Member
of the European Parliament and President of the Forum for Textiles,
Clothing and Leather. The European Commission was represented
by Mr Luis Filipe Girão, Head of Unit in DG ENTR, and Mr Ghazi
Ben Ahmed of DG TRADE. The 60 people attending included
Italians, Germans, French, Turks, Lithuanians and Belgians.

Illegal

imports of

3.3.5
items of clothing have reached
alarming levels, and false ‘Made in...’ labels are spreading across
international markets. More severe checks and harsher penalties
are called for here.

3.3.6
The development of new materials, production
processes and clean technologies in support of sustainable
development are of particular importance to the sector.

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3.3.7
Employers' and trade union federations stressed that
they have always adhered to the underlying principles of the
‘Code of Conduct’ for the textiles and clothing sector, which
has in effect been directly incorporated into the Member States'
national collective labour agreements. The Commission is
consequently asked to introduce the social dimension into the
sphere of international agreements.

4.2
Unfortunately, the local-level impact of these thought-
provoking initiatives did not live up to expectations. This leads
us to reflect once again on how we can harness knowledge and
information and disseminate them more widely to all stake-
holders.

Social

dumping

(manufacturing

3.3.8
products while
pushing down labour costs to the detriment of workers' rights,
using child and forced labour) is morally repugnant, but cannot
be directly tackled by imposing anti-dumping tariffs. The indus-
trialised nations, of Europe in particular, should therefore
combat dumping far more vigorously through more stringent
clauses and, most importantly, through the GSP (1). Ecological
dumping also reduces production costs, to the detriment of the
environment.

3.3.9
International institutions, with the support of indus-
trialised countries, should launch targeted projects in order to
disseminate know-how flowing from the sustainable develop-
ment principle among developing countries, as the Community
is indeed doing with the new Member States.

The use of labels confirming that a product's access
3.3.10
to the EU is subject to compliance with international environ-
mental standards might be helpful in achieving this objective.

3.3.11
The aim that should be pursued is to protect the
environment and provide European businesses with realistic
conditions of operation and competition, through a radical
overhaul of the contents of agreements.

4. EESC comments

4.2.1
Close involvement of professional employers' and
workers' associations at all levels must go hand in hand with
and be used as a framework for the whole innovation process.

4.2.2
Only a tried and tested policy of cooperation between
including the experience of the Bilateral
the social partners,
Agencies (3) and a common effort to support growth in the
sector, will enable us to meet the challenge of globalisation
which, especially in this sector,
‘... poses real concerns...’, as
Commissioner Lamy rightly said recently.

The Industry Council of 27 November 2003 described
4.3
industrial competitiveness as one of the key areas where the
European Union and the Member States have active roles to
play in order to meet the objectives set by the Lisbon strategy
(OJ C 317 of 30.12.2003, p. 2). The textiles sector is unques-
tionably the most exposed at present to the deindustrialisation
triggered by the new aspects of world trade.

4.3.1
Primarily for these reasons, the textile sector is faced
with a permanent process of restructuring and modernisation,
combined with a marked slow-down of economic activity,
production and employment. It is however a strategic sector
which continues to provide employment, especially to women.
In its above-mentioned conclusions, the Council – aware of the
sector's value – invites the Commission to report back by July
2004 on initiatives which might take the form of an Action
Plan to support the textile sector.

4.4
The Committee believes that the Commission should,
partly in the light of the points made in its communication,
urgently take a fresh look at the following points:

The EESC has closely followed the Commission's efforts,
4.1
particularly over the last few years, to re-establish the textile
and clothing sector as a key Community concern. It notes, in
particular, that the presentation of best practice in the various
areas of innovation and marketing provided food for thought
for the many people who attended the Conferences recently
organised by the various DGs in Brussels (2).

Reviving the Doha Development Agenda negotiations,
4.4.1
beefing up its own document
(COM(2003) 734 final of
26 November 2003) in response to a number of clear signals
from workers', employers' and consumers' circles (4).

(1) EESC opinion CESE 313/2004 (REX/141).
(2) Conference of 15 October 2002 ‘The European apparel business
goes high-tech’, Borschette - Brussels. Conference of 20 March 2003
‘The future of the textile and clothing industry in an enlarged
Europe’. Conference of 5-6 May 2003 ‘The Future of Textiles and
Clothing after 2005’, Charlemagne - Brussels.

(3) The Bilateral Agencies comprise representatives of small businesses
and workers who, acting on the principle of reciprocity,
take
provide finance for back-up, refresher and innovation courses for
employees and owners of micro- and small enterprises.

(4) Cf. the hearing of 21 January 2004 and the conclusions in point

13.

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4.4.2
Role of customs in the integrated management of
external borders (1), taking on board the considerations and
other suggestions set out in the Committee's opinion.

Rules of origin in preferential

4.4.3
trade arrangements
(COM(2003) 787 final), in order to stabilise the level of future
tariffs produced by the new round of multilateral negotiations,
by free trade agreements and by support for sustainable devel-
opment. Moreover, as repeatedly argued in the present opinion,
‘management procedures
and safeguard
mechanisms […] also need to be designed to make sure that
preferential arrangements are used properly and shield the busi-
ness community and the financial interests at stake from abuses
of the system’ (2).

and supervisory

The terms of the partnership with China (3), within
4.4.4
which various Community resources have been earmarked to
increasing competition between China and the EU (Junior
Managers Training Programme, Development of Vocational
Training, under title B7-3).

Introduction of an adequately resourced Community
4.4.5
programme to support research,
innovation (not exclusively
technological) and vocational training in the sector (capacity of
small-scale employers and the workforce in particular to adjust
to the new international setting and consumers' requirements).
This principle has also been clearly stated by the European
Parliament in its resolution on the future of the textile and
clothing sector adopted in February 2004.

Consumer

protection measures. Consumers

4.4.6
are
increasingly aware of the potential health effects of certain
products which are often in contact with the skin, not least in
connection with the spread of contact allergies or other skin
disorders (4). In the light of developments in European legisla-
tion regarding transparency in the food sector, similar legisla-
tion should be introduced for compulsory labelling to inform
consumers on the origin of the material used and where the
finished product is manufactured.

4.5.1
Regarding the alternatives set out in the Commission's
proposal on labels of origin, the Committee urges opting for
compulsory labelling of both imported products and those
single market, when they are
manufactured within the
marketed within the European Union. One effect of this would
be to make it easier to guide consumers towards ‘ethical’
products in terms of both their intrinsic quality and compliance
with workers' rights in the production process.

4.6
The culture of corporate social responsibility should be
consolidated as a European model, but must also be extended
to the developing countries through specific instruments which
could be checked at consumer level and whose trade-related
aspects would therefore be significant (5).

4.7
Environmental and workplace safety legislation in force
in industry must be made more visible to consumers, in order
to boost competitive advantage.

is accompanied by an acknowledgement of

4.7.1
The Union's clear-cut position on sustainable develop-
ment and, consequently, on compliance with the timetable of
the Kyoto Protocol, can be successful and meet with the
approval of the European manufacturing sector, provided that
it
the efforts
entailed by these commitments. Failing to take account of
unfair competition or to take action to prevent it would do
nothing to facilitate the spread of a culture of progress among
European employers and workers. Furthermore, it could accel-
erate deindustrialisation in Europe, which would benefit some
multinational companies (6), who can turn to production in
countries with less awareness of this principle, emblematic of a
‘social market economy’.

4.5
label
The introduction of a compulsory ‘Made in …’
could help increase consumers' confidence that when they
purchase a garment they are paying a price that corresponds to
the standards of production and style applied in the country of
origin – the country of origin must be the country in which
the garment was finished as opposed to the country in which it
the Commission's ‘Made in Europe’
was produced – but
proposal is unconvincing. A single European label would be
blind to the particular and outstanding qualities of individual
countries' products –‘ united in diversity’.

(1) COM(2003) 452 final of 24.4. 2003.
(2) COM(2003) 787 final of 18.12.2003.
(3) COM(2003) 533 final of 10.9.2003.
(4) Approximately 1,000 chemical substances are most often used out
of 5,000 available in the textile sector. In addition, there is an
unspecified quantity of different combinations of several substances,
some of which are toxic, which are used for dying and other treat-
ment of fabric. In the EU, toxic substances are selected, rejected or
treated before use in accordance with environmental and health
legislation. The cost of this is borne by European businesses.

in part through the general

The Commission's efforts to reduce energy consump-
4.7.2
tion,
introduction of eco-design
requirements for energy-using products (7), may in time achieve
their objective, if European industries – textiles and clothing in
particular – still have a market, and consequently machinery,
for production. Otherwise, the proposal might just as well be
extended to some allegedly developing countries so that they
can enhance the energy consumption of plant used to manufac-
ture their products.

(5) Cf. COM(2004) 101 of 10.02.2004 - Communication from the
Commission on Building our common future, Section C: The EU as
a global partner.

(6) Cf. Eurostat: The GDP in the World. Of world GDP, which was EUR
34,000 billion in 2002, over 55 % was in the hands of approxi-
mately 45,000 multinationals.

(7) Proposal for a Directive, COM(2003) 453 final of 1.8.2003.

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The Committee urges

that at European level

4.8
too,
constant attention focus on micro and small enterprises, which
are very common in this sector. Particular attention should be
paid to the present financial system, which tends to favour
large businesses. The Committee also recognises the Commis-
sion's work to highlight the problems micro and small enter-
prises, and to cultivate entrepreneurship within European
culture (1).

4.9
The Committee calls for a reduction in the number of
countries benefiting from the Generalised System of Preferences
(GSP), as stated earlier. In conjunction with this, the Committee
considers that the customs tariffs currently applied by the EU –
which are among the lowest in the world – must not be
lowered any further before those of a number of countries with
highly competitive textile and clothing exports come down to a
comparable level. In its resolution on the future of the textile
and clothing sector in the European Union of 29 January
2004, the European Parliament also recommends adopting the
criterion of reciprocity, or ‘access to markets at world level that
is comparable to the import conditions that the EU will be
applying with effect from 2005’. The Committee is for trade
liberalisation, but against one-way liberalisation. Other coun-
tries should also be ready to open their markets to EU textiles
and clothing producers.

4.9.1
External border customs controls must be stepped up
in order to overcome the serious problems of pirating and
counterfeiting. They need to be combined into genuine joint
European customs services, with specific support measures for
the new Member States.

4.9.2
The Committee shares the serious concerns of those
categories affected by fraud, and considers that all possible
measures should be taken to reduce it. Customs services have
repeatedly pointed out that they have insufficient personnel to
check goods in transit, especially in ports. An average of 1,000
containers arrive daily in the port of Naples, for example, with
a staff of only three to check them: on average, less than 1 %
of these are opened (and opened only, not inspected).

4.9.3
Given this state of affairs, made worse by the planned
fraud carried out by criminal groups affecting business in many
European ports, one possible approach might be to concentrate
particular products in specifically equipped ports, in which the
categories concerned would be represented and tighter controls
carried out by the customs services.

Point 11 of

4.9.4
the European Parliament's resolution
substantially agrees with this line, requesting the Commission
to encourage and assist manufacturers in establishing a surveil-
lance and information network to identify the sources of coun-
terfeit or pirated products and eliminate them from the market.

(1) Cf.,

inter alia, the following documents: COM(2001) 98 final of
1.3.2001; COM(2001) 366 final of 18.7.2001; COM(2003) 21 final
of 21.1.2003; COM(2002) 345 final of 1.7.2002; COM(2001) 122
final of 7.3.2001; COM(2002) 68 final of 6.2.2002;
and
COM(2003) 27 final of 21.1.2003.

Another solution might be to divide containers,

4.9.5
in
sealed condition, between the areas of final destination. This
would dramatically reduce the number of containers needing to
be checked in ports and enable more thorough checks to be
made.

4.10
The countries from which goods originate must also
be asked to improve controls. Countries which connive at
fraud by operating ineffectual control mechanisms should
suffer temporary withdrawal of advantageous export condi-
tions. The GSP alone, widely used in the textile and clothing
sector, costs the EU EUR 2.2 billion annually by way of lost
customs
the participating countries
receive an annual benefit of the same amount. If the EU is
it is entitled to impose
given advantages of that magnitude,
terms and conditions on the receipt of those advantages.

revenue. Conversely,

The Committee is well aware that

4.10.1
the EU's real
borders do not necessarily coincide with the Member States'
physical boundaries: they increasingly lie within the territory of
the countries from which its imports come. The EESC has
already expressed its views on this question.

The current rules of origin are too complex and are
4.11
difficult to apply; they are easily misunderstood and require in-
depth knowledge of numerous legal texts. They now represent
a constraint on trade and a powerful incitement to fraud. Bene-
ficiary countries most often merely serve as conduits for the
products of non-beneficiary countries.

4.12 With regard to the advantages to be granted to devel-
oping countries, the Committee calls on the Commission – the
Trade DG in particular – to define clear standards, especially
for the protection of labour rights, protection of the environ-
ment, suppression of drug trafficking, observance of funda-
mental human rights,
sustainable development and other
important aspects concerning consumer protection and animal
welfare.

the

that

Turning to the Common Customs Tariff (CCT), the
4.13
Committee notes
recent Regulation 1789/2003
amending Regulation 2658/87, and which came into force on
1 January 2004, is also the result of a series of compromises
over the level of the CCT. These compromises make implemen-
tation difficult and complex and consequently facilitate fraud
and evasion. The heading ‘Articles of apparel and clothing
accessories’, indicated by codes 61, 62 and 63 includes 466
items; of these 398 attract a tariff of 12 %, with the other 68
having tariffs ranging from complete exemption to 2 %, 4 %,
5.3 %, 6.2 %, 6.3 %, 6.5 %, 6.9 %, 7.2 %, 7.5 %, 7.6 %, 7.7 %,
8 %, 8.9 %, 10 % and 10.5 %. Other codes: 64 (Footwear,
gaiters and the like), 65 (Headgear and parts thereof), 66
(Umbrellas) and 67 (Feathers and artificial flowers) have tariffs
of 1.7 %, 2.2 %, 2.7 %, 4.7 %, 5 %, 5.2 %, 7 % and 8 %.

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4.13.1
There are more than 20 tariff levels for the total of
1,516 headings covered by codes 50 to 67 of the Combined
Nomenclature (CN). Having such a large number of very
similar tariffs causes only problems, and demonstrates the
weakness of a system which could be more rational and less
vulnerable to pressure from centres of economic interest
which, while maximising their gains, generate nothing but diffi-
culties for very many businesses. The Committee considers that
setting a limited number of tariffs – three or four at most –
would significantly reduce fraud and simplify the system enor-
mously.

The Committee attaches particular

4.14
importance to
promoting compliance with core labour standards and fair
trade, protection of the environment and combating drug traf-
ficking. Whilst it is true that the current GSP cuts CCT levels
by 40 %, thus enabling all the developing countries to export
their textile, clothing and footwear products to EU countries
with a tariff of less than 5 % provided that they undertake to
observe the social and environmental clauses, it has neverthe-
less proved unsuccessful as a moral campaign. Neither has the
special incentive regime intended to counter drug trafficking,
from which 12 countries have benefited, had any impact in
terms of reducing the drugs trade. On the other hand, many
small European businesses have had to fold due to unsustain-
able competition; this is the result of overall production costs
which are not at all comparable with those costs imposed by
progressive, sustainable development-oriented regulation (1).

4.15
The EESC believes that the efforts of the Council, the
Commission and the European Parliament should be stepped
up in order to exclude from the GSP all those countries that
need to export their textile, clothing and footwear products to
the EU, yet do not respect the fundamental rights enshrined by
the ILO (2) (International Labour Organisation) (3).

The EESC is convinced that per capita GDP cannot be
4.16
the sole criterion for deciding whether countries are eligible for
reductions under the GSP in the textile sector. It also shares the
concern expressed in many quarters that an undue proportion
of the benefits currently to those nations which have least need
of them. In order to ensure that GSP assistance is concentrated
on the countries with the greatest need, the Committee recom-
mends that the following categories of country be excluded
from the system:

— nations which are members of OPEC (4);

— nations which have a nuclear weapons programme;

— nations which serve as tax havens;

— nations which have bilateral or regional agreements with

the EU (5);

— nations which do not comply with the fundamental rights

enshrined by the ILO (6).

4.17
The Technological Poles and Innovation Centres –
widespread across the EU – must help to improve networking
and dissemination of experience with entrepreneurs in the
industry, universities and civil society organisations.

4.18
Technical, high-tech textiles and technical footwear are
increasingly gaining market share in Europe and globally.
Thanks to their solid hands-on experience, small and medium-
sized European companies can play, both now and in the
future, an important role in producing garments that can
exploit new chemical processes and develop new technology.

The EESC feels that there is a need to trial Concerted
4.19
Actions between the Commission and the Member States in
order to finance and support a variety of advanced services that
can improve business performance, so as to encourage a match
between supply and demand for innovative garments.

4.19.1
The European Social Fund (ESF) and the 6th Research
and Development Framework Programme should be used to
enhance and develop training facilities for a new type of profes-
sional with specific technical-operating ability, and who can act
– following a suitable game plan – as innovation enablers for
SMEs. Special attention should be given to those EU countries
where the textile and clothing sectors have a strategic impor-
tance.

4.19.2
The professional profiles required to help businesses
improve and expand production of technical textiles and foot-
wear include: technology audit analysts, restructuring plan facil-
itators, and people skilled in business opportunity scouting.

— nations which are not defined by the UN as ‘developing

countries’;

(1) Cf. Opinion REX/141 (GSP), points 6.6.2, 6.6.2.1, 6.6.2.2 and

6.6.2.3.

(2) C29 – Forced Labour Convention; C87 – Freedom of Association
and Protection of the Right to Organise Convention; C98 – Right to
Organise and Collective Bargaining Convention; C100 – Equal
Remuneration Convention; C105 – Abolition of Forced Labour
Convention; C111 – Discrimination (Employment and Occupation)
Convention; C138 – Minimum Age Convention; C182 – Worst
Forms of Child Labour Convention.

(3) Cf. REX/141 (GSP), point 6.6.2.3
(4) Venezuela, Algeria, Nigeria, Libya, Saudi Arabia, The United Arab

Emirates, Quasar, Kuwait, Iraq, Iran, Indonesia.

4.19.3
The EESC is convinced that by harnessing existing
local opportunities – technology poles, universities, Structured
Dialogue between employers, workers and local authorities –
businesses, and SMEs in particular, could benefit from coopera-
tion with these new types of skilled professional in order to
migrate to a higher level of competitive technology (7).

(5) (Generalised System of Preferences), point 6.6.1.2.
(6) Ibidem
(7) Small businesses would often like to switch from producing
garments made from traditional products to new ones made from
technical or intelligent textiles, but they lack the necessary informa-
tion and knowledge of technical and commercial processes.

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4.20
The Committee is also aware, as is the Commission
and the European Parliament, that small firms (with fewer than
50 employees) account for approximately 70 % of the EU's
textiles, clothing and footwear industry; circa 20 % of firms
have between 50 and 249 employees and the remaining 10 %
employ 250 or more. The sector has a higher concentration of
female workers than other industries. Efforts to encourage
innovation and technology upgrades are clearly hampered by
the high degree of company fragmentation across Europe.

4.21
The EESC, whose representatives have a direct relation-
ship with civil society organisations, has on several occasions
condemned the relentless fraud operations involving a wide
range of goods across Community borders. The most blatant
examples of fraud include:

4.21.4
In the first half of 2003, over 50 million counterfeit
or bootleg products were intercepted by European customs (5).
Fraud doubled between 2000 and 2002 in the clothing sector
and trebled in the perfume and cosmetics sectors (6). This is,
however, only the tip of the iceberg, compared with what has
slipped through the net.

4.21.5
As to the origin of these products, 66 % come from
Asia, especially China and Thailand. According to Commis-
sioner Bolkestein, counterfeiting is no longer confined to
luxury goods: all everyday consumer products are now poten-
tial targets for counterfeiting and pirating with the result that
SMEs are increasingly falling victim to counterfeiters (7).

— declarations inconsistent with products that have cleared

customs (1);

4.21.6
The sheer scale of the phenomenon puts increasing
pressure on European firms, often forcing small firms to cease
trading, making it impossible for them to stay on the market.

— goods with no certification of conformity, which are often

dangerous for consumers;

— goods produced which do not comply with intellectual

5. Specific comments

property rights;

— goods subjected to triangulation between various States (2);

— goods that do not comply with the rules of origin (3);

5.1
Since 1971 the European Community – initially via the
GATT and then the WTO (World Trade Organisation) – has
granted significant reductions on the Common Customs Tariff
(CCT) to developing countries.

— counterfeit or pirated goods.

from
Products classed as non-sensitive are exempt
5.1.1
customs duty when exported by developing countries to the
Community.

4.21.1
Some statistical surveys were recently carried out
into this phenomenon. The EESC welcomes the fact that the
European Union has finally adopted a Regulation that provides
for
to be burned and destroyed by
customs (4).

counterfeit goods

5.1.2
Products classed as sensitive – which include textiles,
clothing and footwear – benefit from a 20 % reduction (general
regime), rising to 40 % for the special regimes (8).

4.21.2
area remains limited.

The Committee feels, however, that success in this

5.1.3
In 2003, the United Nations recognised 116 devel-
oping countries. In practice, however, the advantages granted
by the EU extend to 174 Countries (9).

Indeed, customs agency directors complain about the
4.21.3
shortcomings of Community regulation (which ought
to
compensate for fragmented national legislation), and the lack of
staff and resources to deal with such a vast, active market.

(1) The customs tariff percentage depends on the type of product
imported. Often they are declared as various products, with lower
tariffs than for those actually imported.

(2) Green Paper on The future of rules of origin in preferential trade

agreements, COM(2003) 787 final, point 1.2.2.

(3) Ibidem.
(4) Regulation (EC) 1383/2003 of 22.7.2003. Enters into force on

1.7.2004.

5.1.4
Asia is by far the main beneficiary of the preferential
terms, accounting for almost 70 % of the total in 2002. China
alone accounts for some 25 %.

(5) IP 03/1589 of 24.11.03.
(6) Ibidem
(7) Ibidem
(8) Special Regime for the protection of workers' rights; SR for the
protection of the environment; SR to combat drugs production and
trafficking.

(9) Annex I to Regulation 2501/2001.

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The average EU tariff

5.1.5
for the TCF sector (Textiles,
Clothing, Footwear) applied to the above countries is 4.8 %.
The tariff imposed by the US is 8.9 %, by Japan 6.6 % and by
Canada 12 %. The tariffs imposed by China are 20 %, by Thai-
land 29 %, by India 35 %, and by Indonesia 40 % (1).

6.2
Preferential customs tariffs could be applied only to the
49 least developed countries. The negotiations launched in
Doha should lead to greater reciprocity between the Pan-Euro-
Mediterranean area and the countries of Asia. A worldwide
agreement should be reached as part of
the Doha Round
bringing all customs tariffs applicable to the textiles and
clothing sector down to a maximum uniform level of 15 %
within a specific time frame, e.g. 5 years.

5.2
Euro-Mediterranean manufacturers of TCF continue to
run up against obstacles in accessing Asian markets. In order to
obstruct trade, these markets have created non-tariff barriers
which pose a serious problem for European industry as a
whole (2).

6.3
EU customs controls must be stepped up in order to
achieve, as soon as possible, a common customs system that is
consistent with single market legislation.

5.3 Within EU manufacturing industry as a whole, textiles
value added accounts for some 2.5 % (3). Some countries,
however, have relatively higher
levels: Luxembourg 8.7 %;
Portugal 6.3 %; Greece 5.1 %; Italy 4.6 %; Belgium 4.3 % (4). In
the new EU Member States, the textiles and clothing industry is
even more important: Lithuania 16.1 % (5), Estonia 10.5 % (6)
etc.

6. Conclusions

6.1
The many European entrepreneurs in the sector feel the
current situation is unfair and punitive. They are often forced
to cease trading as they are sometimes faced with a competitive
climate that would appear to be neither fair, nor linked to
entrepreneurial ability or respect for human rights in the work-
place. Entrepreneurs, workers and EU political decision-makers
at the different levels need to have a shared, joint vision for the
medium- and long-term future of a competitive, advanced
European clothing and textiles sector.

6.1.1
Respect for the fundamental labour rights set forth in
the ILO's fundamental standards must be reinforced both by
specific ILO control arrangements and by close cooperation
between the ILO and the WTO. The EU must step up its efforts
to ensure that ILO principles on the protection of workers
become a WTO touchstone.

(1) Source: EU Commission.
(2) The most frequently used non-tariff barriers are: additional taxes or
charges; minimum import prices; customs valuation prices not paid
on imported goods; unreasonable discriminatory requirements on
labelling and brand names; import authorisation regimes; difficult
advance procedures.
(3) Cod. from 17.1 to 17.6.
(4) Source: Eurostat, manufacturing industry in the EU 1992-2002.
(5) Department of Statistics of the Republic of Lithuania, 2003.
(6) Department of Statistics of the Republic of Estonia, 2003.

6.4
In order to combat counterfeiting and fraud and to
provide consumers with more information, a label of origin
system (geographic, social and environmental) could be devel-
oped.

6.4.1
For the same reason, the EESC proposes that the possi-
bility be explored of launching a textile traceability system,
which would be a factor in reducing fraud in relation to rules
of origin legislation (7) and counterfeit products.

6.5
The Committee supports the Commission's efforts to
secure tougher trade protection instruments, and antidumping
and anti-subsidy measures. Similarly, it calls on the Commis-
sion to implement safeguard measures, particularly where fraud
has been identified and confirmed. In the Doha negotiations
the EU should try to obtain a much stricter discipline regarding
the use of safeguard measures, antidumping actions and other
protective measures such as changes in origin regulations and
so on.

The Commission must step up its efforts to ensure that
6.6
the TRIPS (Trade-Related Aspects of
Intellectual Property
Rights) are guaranteed by the WTO and respected by the
Member States.

6.7
Innovation capacity must be increased – particularly as
regards SMEs – by means of projects and programmes agreed
at local level, with the contribution of all social partners and
the involvement of research centres. Europe has some textiles
colleges with long experience. It would be extremely useful to
create a network of excellence with close links with enterprise
and the labour market which can tap into the opportunities
provided by the Sixth Framework Programme and implement a
technical foresight programme to promote technological devel-
opment in the sector.

The European textiles industry must add to its assets
6.7.1
of fashion and the beauty of the manufactured product a capa-
city for innovation,
introducing new fibres and composite
fabrics, enriched by powders developed by nanotechnology
research, which increase the fitness for purpose, safety, heat
protection qualities and wearability of a product.

(7) Green Paper: The future of rules of origin in preferential trade

arrangements, COM(2004) 787 final of 18 December 2003.

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Non-woven fabrics – special

6.7.2
fabrics – treated with
chemical substances which act as adhesives, are becoming
increasingly widespread in a number of sectors – including
sport, construction, the aeronautical and transport industries.
As has already been said, this market is constantly expanding
and represents an opportunity for product diversification with
great potential for future development (1).

The CCIC (Consultative Commission on Industrial
6.8
Change), which has acquired a wealth of experience over
numerous decades of handling problems related to the develop-
ment of the coal and steel markets (2), could play an important
role as a link between the Commission and the textiles sector,
facilitating product diversification.

There is a need to reskill those staff, who will

6.8.1
lose
their jobs as a result of restructuring. The creation and growth
of entrepreneurs'
interests as regards these new composite
products should be encouraged. There can only be genuine
sustainable development
in the future if young people are
familiarised with new products and helped to appreciate their
qualities and take on board the principles of respect for the
environment which they promote. European bodies such as the
CCIC, which have both social and technical experience, can
make a valuable contribution in this regard.

6.9
The textiles, clothing and leather sector is the first to be
addressed by the European Commission's recently launched
vertical policy on industry, complementing the existing hori-
zontal policies. All observers, and particularly employers and
workers in the sector, agree that it is vital that the Commission,
in conjunction with the Member States and the social partners,
should succeed in helping the sector to modernise its tech-
nology and meet the challenges of globalisation.

6.9.1
In addition to the technological platforms already
established by Community policies (3) a fourth platform could
be envisaged, dedicated to the many innovative aspects of
textiles of modern design.

Brussels, 1 July 2004.

Deindustrialisation is underway in all

the more
6.10
advanced countries.
In the EU, value added of the tertiary
sector has risen to 70 % of total GDP (22 % for industry, 5 %
for construction and 3 % for agriculture) (4). The process should
not, however, be encouraged, since a large part of the value
added is channelled to, or originates in, businesses: trade and
transport 21.6 %; financial and business services 27.2 %; public
administration 21.6 % (5).

6.11
The EESC believes that the full weight of the European
vision of a ‘social market economy’ should be brought to bear
on changing the WTO rules to make them as effective as
possible. At present, the rules do not allow imports of products
to be banned, except where they constitute a danger. However,
respect for a number of social, environmental and economic
priorities must be imposed without delay, given that the EU, as
a global economic player, can make global governance more
effective by endeavouring to ‘generalise sustainable develop-
ment across the planet through … international cooperation
and good domestic policies’ (6).

The costs of

6.11.1
implementing these policies which
developing countries have to meet could be borne partly by
development cooperation programmes which seek to improve
commercial conduct. The programmes would have to be
reviewed regularly.

6.12
A stage in the process of globalisation has probably
been reached where more attention must focus on the ‘collec-
tive preferences and sensibilities’ voiced by the general public,
in order to ease international tensions and head off the ideolo-
gical
‘trade wars’ which are on the increase and which it
appears not to be possible to resolve using the current mechan-
isms and rules.

The President

of the European Economic and Social Committee

Roger BRIESCH

(1) Carbon fibre and kevlar fabrics are more resistant than the metals

traditionally used and are lighter and more malleable.

(2) Cf. the work of the ECSC Consultative Committee, which became

the CCIC.

(3) Aerospace, communications and steel.

(4) Source: Eurostat, structure of gross value added, 2002.
(5) Source: Eurostat, ibidem.
(6) COM(2004) 101 final of 10.02.2004 on Building our common

future, page 24.

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APPENDIX 1

to the Opinion of the European Economic and Social Committee

Although it received at least one quarter of the votes cast, the following amendment was defeated:

Delete point 6.1.1.

Outcome of the vote:

For:

Against:

Abstentions:

31

32

9