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**COMMISSION OF THE EUROPEAN COMMUNITIES**

**Brussels,** **11.10.1995**
COM(95)447 final

**COMMUNICATION FROM THE COMMISSION**

**TO THE COUNCIL, THE EUROPEAN PARLIAMENT,**

**THE ECONOMIC** **AND** **SOCIAL COMMITTEE**

**AND THE COMMITTEE** **OF** **THE REGIONS**

**The Impact** **of** **International Developments** **on the** **Community's**

**Textile and Clothing Sector**

CONTENTS

I. INTRODUCTION 1

FACTORS DETERMINING THE COMPETITIVENESS AND FURTHER

DEVELOPMENT OF THE EU TEXTILE AND CLOTHING SECTOR 1

1. Development of the EU textile and clothing sector since 1984 1
2. Factors determining competitiveness 2

```
  THE RELEVANCE OF UR RESULTS 4

```

1. Results of the Expert Study 4
2. Assessment of the situation and the further perspectives 6
3. Strategic choices for the enterprises 8

IV. CURRENT POLICIES 9

V. SOME FUTURE POLICY PRIORITIES 10

_A._ _External_ _policy_ 11

1. Exports to third countries 11
2. Further WTO integration 12

3. Fight against fraud and other unfair trade practices 12

_B. Internal competitiveness policies_ 13

1. Industrial cooperation and information technologies 13
2. Training "for export" 14
3. Special product and regional aspects 14

VI. CONCLUSIONS 15

/ **[e-L ]**

INTRODUCTION

Mid April 1994, the Final Act embodying the results of the Uruguay Round and the
Agreement establishing the World Trade Organization (WTO) were signed in Marrakesh.

Only one week later, the European Council of Industry Ministers [1], after having examined
the "Report on the Competitiveness of the European Textile and Clothing Industry",
submitted to it by the Commission on 16 November 1993 [2], decided on a comprehensive
programme for the European textile and clothing industry. This programme was intended
to actively encourage the adaptation of the industry to the new conditions of international
competition in order to secure its future by improving its competitiveness.

In this context, one important objective of the Council's programme was to make a
concerted assessment of the impact of the Uruguay Round results on the industry. In the
Commission's view this assessment should also take into account all the other internal
and external factors which will influence the EU textile and clothing sector during the
period of application of UR results and the possible implications for the enterprises'
strategies and the Member States' and the EU's industrial policy.

The present Communication prepares the necessary discussion of the Council taking into
account the main results of an expert study which was launched by the Commission. The
elaboration of the study was accompanied by a steering committee, composed of
representatives from the European textile and clothing industry, trade and trade union as
well as from the European Textile and Clothing Observatory (OETH) and the relevant
Commission services.

FACTORS DETERMINING THE COMPETITIVENESS AND FURTHER DEVELOPMENT OF
THE ÊU TEXTILE AND CLOTHING SECTOR

**1**   - **Development of the EU textile and clothing sector since 1984**

During the last ten years the development of the European textile and clothing industry
has been determined essentially by a relatively low annual growth in consumption
(textiles +2.2%; clothing -0.3%) and a rather high annual growth of imports (textiles
+5.4%; clothing +6.4%). Thanks to increasing exports in textiles (+3.2% p.a.) the
textile production decreased only marginally (-0.6% p.a.), while the increase in
clothing exports (+2% p.a.) was not enough to avoid a larger decline in clothing
production (-2.2% p.a.).

In consequence, the employment in the textile and clothing industry fell by about
850 000 persons in the last 10 years, of which 600 000 [3] was during the last 5 years.
While in textiles the rise in productivity, induced by the competitive developments, has
been the main factor for the loss in employment, in clothing, besides a rise in
productivity, weak consumption and the high imports played an important role.

1 1750th Council meeting / Industry; Luxembourg, 22 April 1994
2 COM(93)525 final of 18 November 1993
3 excluding Eastern Germany

**it**

The development has been different in the various EU regions (Tables 1 a-e). While
production in certain Member States had still increased in the last 10 years (in
particular in Belgium and Portugal), employment has considerably dropped almost
everywhere in the EU (excluding Portugal).

However, the EU textile and clothing industry still represents a major industrial sector,
with 2.3 million employees in more than 120 000 enterprises. In 1994 it had a turnover
of 170 billion ECU and investments of 5.6 billion ECU. So this industry represents 8%
of the employment and 5% of the value added of the whole EU manufacturing sector.
An extensive analysis of the situation in the EU textile and clothing industry has been
presented to the Council in the OETH Report of April 1995 [4] .

**2.** **Factors determining competitiveness**

The most important factors affecting the competitiveness and future developments of
the EU textiles and clothing sector have already been analysed in the Commission's
"Report on the Competitiveness of the European Textile and Clothing Industry"
(Communication of 1993) [5] .

Among them with a fundamental importance are **labour costs** (Table 2). Even if the
existing immense differences in labour costs between the EU and the developing
textile exporting countries may generally narrow down in the long term, for the near
future the expected changes are limited and the differences in total costs tend even to
be reinforced by further differences e.g. in energy and environmental costs. The
problem of fundamental cost differences is particularly relevant in Community
productions with a high share of labour cost (mainly in the clothing sector) or with
relatively high energy and environmental costs (mainly in the textile sector). Cost
differences can be compensated, at least partially, by a further modernisation or
reorganization of the production processes, by the development of new products,
more fashionable and higher quality products, trade marks or quality labels, improved
logistics in the field of marketing or other means.

Mainly the differences in labour costs but also the growing number of countries rapidly
developing their industries and exports of textiles and clothing products have resulted
in continuously increasing low priced **imports** into the EU (Table 3).

Another important factor having an influence on the competitiveness of the strongly
import and export-oriented EU textile and clothing sector are **international monetary**
**developments** (Table 4). Over 50% of all EU-imports in this sector come from
countries which price their exports in US dollars. Moreover, most of the raw materials
are imported and depend on world market prices quoted in US dollars. So definitely,
movements in the exchange rates of European currencies against the US dollar have
an impact on the competitiveness of the EU textile and clothing industry [6] .

4 OETH: The EU Textile and Clothing Industry 1993/94, Brussels, April 1995

**5**

COM(93)525 final of 18 November 1993.

The possible effects of EU-internal currency fluctuations are not the subject of this
communication. The Commission is presently examining them as a follow-up of the European
Council in Cannes.

Also **capital** **and** **labour** **productivities** are key factors in international
competitiveness. Developments in capital investment for the modernization of
production plants as well as the utilization of production capacities have a major
influence on production costs. This is also true for the labour productivity which
depends mainly on the quality and flexibility of the human resources available. Labour
productivity, measured by value added per employee, has risen steadily in the EU
textile and clothing industry (1994 by 8% in textiles and by 6% in clothing) and has
helped to strengthen the competitiveness of the sector.

There are many other factors which will determine the further development and future
competitiveness of the EU textile and clothing industry, of which the most important
may be the following:

- The technological developments have been quite different in the past regarding the
textile and clothing production. While most of the textile processing uses highly
developed technologies and is therefore capital-intensive, most of the clothing
production still is labour intensive. Most of the experts do not see yet a
technological breakthrough for the production of clothing. The EU industry normally
draws a certain competitive advantage out of the fact that it is closely linked with a
strong European textile machinery industry. However, this is a time limited
advantage until relevant new technologies are also used by third countries'
producers. New advantages are expected from the development and
implementation of information technologies (e.g. quick response, just-in-time) if the
industry will be successful in a quick application. Contrary to other sectors most of
the research activities are carried out outside the enterprises.

- The development of consumption is one of the very basic relevant factors. The EU
industry has the competitive advantage to produce in a region of high consumption
and in closest contact with developments in demand and fashion. But these
advantages of the European industry are weakening. Other markets, in particular in
Asia, are developing more rapidly and their growth rates are much higher.
Moreover, if certain trends continue and EU consumers keep tending to reduce their
relative priority for more expensive quality and fashion products mostly produced by
the EU industry, this could create new problems. On the other hand, modern
information technologies enable also producers for example in Asia to closely adapt
their production to European market trends. Moreover, the transportation costs
have dropped over the last years.

- Environment and energy policies have developed quite differently in the various
countries and geographical regions and have enlarged the cost differences in the
production of textiles and clothing. This applies to the Community sector as a whole
vis-à-vis third countries, but also to certain Member States vis-à-vis others. However,
it should be expected that the efforts to coordinate and harmonize legislation within
the EU and to converge policies in the framework of WTO will avoid a deepening of
differences. Similar differences exist and consequences apply regarding the use of
energy, in particular in the textile industry.

  - Existing distribution structures are another important factor in national, but also
international competition. A further opening-up of markets will make it necessary to
adapt the distribution systems in many countries to the globalisation of markets. In
this context the present situation is not satisfactory for the EU industry. While the EU
distribution systems, although different in the Member States, give easy access to
the Community markets, the distribution of European products in third countries in
most cases is faced with considerable difficulties.

**The existence of all these factors, which have an impact on the future**
**development of the textile and clothing sector, suggests that the impact of the**
**UR is certainly a significant factor, but probably not the most important factor.**

```
THE RELEVANCE OF UR RESULTS

```

**1.** **Results of the Expert Study**

The expert study [7] launched by the Commission has concentrated its analysis on the
special impact of UR results on the EU textile and clothing sector. However, it could
not clearly separate the possible UR impact from the effects of other exogenous and
endogenous factors. **It,** **therefore, arrives at the general conclusion that the UR**
**results will only have a rather limited impact on this sector and that other factors**
**in their combination are much more important for its further development.**
Regarding the importance of the UR results on the EU's imports of all textile and
clothing products (raw fibres excluded), it appears that about 30% of the EU-imports
1993 (in value) are directly covered by the progressive liberalisation agreed by WTO
members. Including China, which sooner or later will become WTO member, it would
be 43%. Concentrating only on imports in restricted categories with a quota utilization
above 80%, the study considers that the UR liberalisation is only relevant for 13%,
including China 16.5%, of the EU's textile and clothing imports.

On this basis, **the progressive UR liberalisation over the next 10 years,** in the form
of integration of products into the WTO system which means elimination of
quantitative restrictions on one hand, and in the form of an annual increase of further
remaining quotas on the other hand, **should in general not lead to changing the**
**overall trend of the sector, unless the EU faces a slow growth of the economy,**
**coupled with a fast integration of products under quota and a slow opening of**
**third countries' markets.**

As to the other important factors resulting from the UR, in particular the improved
access of EU exports to third countries' markets, but also the new provisions dealing
with anti-dumping and anti-subsidy measures, trade related intellectual property rights
and finally the new provisions of the Dispute Settlement Body, it proves more difficult
or even impossible to quantify future perspectives. However, the study has tried to
take into account in quantitative terms at least the important new access to third
countries' markets.

Mercer Management Consulting: "Impact of the Uruguay Round on the European Textile and
Clothing Sector", Paris 1995.

**Among the other trade-related factors,** not directly linked to the UR results, but
similarly determinant for the further development of the EU's textile and clothing
sector, **the biggest impact on EU imports is expected from the Customs Union**
**with Turkey.** But also the full trade liberalisation with the Central and Eastern
European countries and the closer trade links with the Republics of the former USSR
will produce trade effects. The study estimates the importance of these three factors
to cover about 4% of the EU textile and clothing imports under quota (utilized more
than 80%), as compared to 16.5% of the UR impact, incl. China after accession to
WTO.

All other relevant factors have been taken into account by the study through the
application of the macro-economic DRI European Industry Model which relies on the
forecast of several variables such as exchange, inflation and interest rates, wages,
investments and disposable incomes.

On this basis, the study quantifies future developments in the framework of a microeconomic approach, starting from certain selected representative textile and clothing
products and production chains, and in parallel, by the mentioned macro-economic
approach, in order to arrive at results which allow a coherent vision of the future
developments of the sector.

- **Scenario 1** (high GDP growth, quick opening of markets and slow integration)
Even in this most optimistic scenario the sector will be facing continuing problems
with regard to employment. In textiles this will be due to further increases in
productivity (production is expected to be stable thanks to much higher exports)
and in clothing to the decline of production as a consequence mainly of much
higher imports. Consumption will be lower in textiles, but will be backed by much
higher exports, while in clothing consumption and exports will grow at similar rates,
but much less than imports.

- **Scenario 2** (lower GDP growth, slower integration and access to third countries'
markets)
This probably more realistic scenario foresees bigger production and employment
problems of the European textile and clothing sector. Imports, exports but also
consumption will in every case be lower than in scenario 1, so that production will
decrease in both subsectors. The impact on employment will be much higher in
textiles, but also higher than in scenario 1 in clothing.

- **Scenario 3** (lower GDP growth, quick integration and access to third countries'
markets)
This scenario foresees less severe problems for the industry in terms of reduction in
production and employment than scenario 2. Consumption, assumed to be almost
the same as in scenario 2, will be strengthened by much higher exports in particular
of textile products, while imports will only be marginally higher in clothing.. This
would result in a lower decline in textile production and also a smaller loss in
employment, particularly in textiles. The essential differences between scenarios 2
and 3 appear to be in the timing of effects (earlier increase in imports and exports)
and the obvious need to ensure that the EU's market will be opened earlier only in
parallel with an effective additional access to third countries' markets.

Basing on those results the study comes to the overall conclusions that:

  - the UR integration process although it concerns a significant share of EU textile and
clothing imports only adds to the effects of the more important general
developments and on the basis of its implementation procedures will not entail a
major breakthrough;

  - the UR market access results, if fully implemented, will open the possibility for the
EU industry to gain progressively from the opening of foreign markets;

  - economic policy decisions will largely determine the timing of the UR impact during
the next 10 years;

  - if existing general trends continue in future, clothing production will drop further,
while textile production may increase or decrease, depending on the case;

  - employment will continue to drop, with the most jobs lost in the textile industry;

  - the impact of the principal economic factors varies by product and region;

  - the European industry can establish production and export strategies to reinforce
and facilitate their adjustment to market developments.

**2.** **Assessment of the situation and the further perspectives**

In general, the study confirms the Commission's view that the UR results regarding the
**progressive integration of the sector into the WTO system** is only one of many
determining factors. By itself **it will not lead to changing the sector's overall trend,**
**if an adequate phasing out of existing quantitative restrictions is ensured. On the**
**other hand, the EU textile and clothing industry can benefit from improved**
**access to third countries' markets and possibly also from strengthened**
**competition between third countries.** The assumption that rapid opening-up of third
countries' markets should favour rapid integration of products and vice versa is fully in
line with the EU's textile policy.

The main trends in **the overall development of the European textile and clothing**
**industry in the future,** and this has also been the result of the study, **will probably be**
**more or less the same as they were in the last 10 years.** European production and
employment in textiles and clothing will tend to decrease, while imports, but also
exports will probably increase. EU consumption is expected to increase in the long
term, but within narrow limits. Regarding the study's forecast of a decrease in textile
consumption due to progressive délocalisation of the EU clothing industry, there may
be doubts why textile consumption should decrease more than the EU clothing
production, taking into account the rather promising perspectives in sub-sectors such
as technical and home textiles.

Comparing textiles and clothing, **the overall perspectives seem to imply for EU**
**textiles stable production, relatively lower import growth and relatively higher**
**export growth, while for clothing a relatively higher increase of consumption, but**
**also a lower loss of employment are forecasted.** A very positive development has
been forecasted for the EU's textile exports in case of rapid new access to third
countries' markets. This seems not to to be true to the same extent for European
clothing, due to its overall lower international competitiveness. However, new
developments and changes in the consumers' taste and demand in the international
markets cannot be excluded.

**The expected continuous loss of employment in this sector also in the future**
**raises particular concern.** The study's forecasts for the next 13 years range between
365 000 and 520 000 employees for textiles and between 235 000 and 340 000 for
clothing, which amount almost to the same absolute figures as in the past 10 years.
This result of the study can be questioned because of the fact that after the sector's
adjustment process during the last two or three decades its competitiveness and
resistence should be improved as compared to the past. The forecasted tendency
could also partly be opposed by new industrial dynamics regarding sourcing,
marketing, human resources and products as well as by the expected new access to
third countries' markets. Moreover, certain dominant supplier countries of the past are
increasingly facing similar problems regarding their own competitiveness, which is
going to be reduced.

In view of the dimension of this problem, the Commission, in the framework of the
Social Dialogue, has effected a study by IFM on "Employment development and
qualification needs in the European Clothing industry" which has produced more
detailed estimates of future employment losses by sub-sectors, Member States and
socio-professional categories and also contains the evolution of past and future
qualification needs in this industry. A symposium has been called to discuss the
results in Brussels in October 1995.

The general conclusions of other specialized studies, based on different assumptions,
seem to confirm the above assessment of the overall future development of the sector.
They share the expectation of a much stronger decline of clothing production as
compared to textile production which, on the contrary, may even increase. They
expect a continuing loss of employment in both subsectors, in some cases with a
more pessimistic forecast.

For example, while the Commission's study forecasts the **production development**
**until 2008** within the three scenarios from +16 to -12% for textiles and from -10 to 23% for clothing, a study of the World Bank until 2005 foresees +3% (textiles) and 60% (clothing) for the EU textile and clothing output. A multi-regional and multisectoral study of GATT/WTO quantifies the impact of the UR for the EU output with - 1 %
(textiles) and -23% (clothing). Another study, launched by the OETH in a different
context, forecasts the EU production for 2005 to be reduced by -14% (textiles) and 17% (clothing). A German study, covering only the German textiles and clothing
sector, forecasts the output until 2010 to decrease by -1 to -12% (textiles) and by -46 to
-49% (clothing) depending on certain scenarios.

Regarding the expected **development in employment,** the study initiated by the
Commission foresees a drop from -21 to -41% (textiles) and from -21 to -33% (clothing)
until 2008. Comparable findings of the other studies referred to above are only
available in the OETH study which expects until 2005 **a** decrease in EU employment
by -30% (textiles) and -33% (clothing), while the German study expects a reduction in
German employment of around 50% (textiles) and of around 60% (clothing). The IFMstudy launched in the framework of the Social Dialogue forecasts a loss in clothing
employment of 34% from 1992 to 2002.

**In** **conclusion, textiles and clothing will be faced with a progressive development**
**of new structures of production worldwide and also of new structures of world**
**markets. If the EU's textile and clothing sector wants to maintain its present**
**position comprehensive new strategies have to be developed.** Those new
strategies have to be applied on a broad level throughout the Community's textile and
clothing sector in order to seriously adapt to the new situation and to effectively
strengthen the competitiveness of European enterprises on world markets.

**3. Strategic choices for the enterprises**

As follows from the EU's market economy system, the main responsibility and the best
abilities for the development of adequate and suitable economic strategies for
particular situations of individual firms in the textile and clothing sector, as in other
manufacturing sectors, lie with entrepreneurs.

The competitiveness and the importance of the European textile and clothing industry
for the European economy and worldwide, prove that this approach has successfully
been applied in the past. At this juncture, this entrepreneurial dynamism has to be
further developed and in many cases activated in order to master future challenges by
new or modified strategies.

**Experience shows that, even in difficult economic situations, certain enterprises**
**in textiles and clothing were always successful. Those good examples** and **their**
**strategies should motivate others.** The further developing technological progress,
the possibilities to take advantage of synergies and cooperation in neighbouring
countries in order to produce European type products and the strengthening of efforts
to develop new ideas, products and markets should give a long term perspective also
for the European textile and clothing industry. The extension of data networks, the
diffusion of information and communication technologies, and the creation of
international production networks should gain a new momentum. The further
development of design and marketing centres, the intensification of the service
component, the closer cooperation of enterprises within the textile and clothing
industry and with the distribution and retail business will open new possibilities. The
application of strategies which favour the personal development of employees in order
to improve their abilities will also support the sector's competitiveness.

In the past too often companies, in defending their competitiveness, in the first place
improved their ability to offer at lower prices by modernizing their production.
Following successful examples of many European manufacturers, **the general**
**orientation of enterprises should include more market-oriented approaches, in**
**particular the discovery** and **development of new sources from which to buy, of**
**new partners with whom to cooperate and of new methods and markets to sell**
**into.**

In this context, the necessary **new orientation and qualification of the companies'**
**workforces,** in particular in SMEs and the firm's managements, should systematically
be set about.

**In order to systematically collect and update information** on possible markets and
market access problems in third countries, **industry and trade federations should**
**cooperate fully** with governments and the Commission.

IV. CURRENT POLICIES

In the past, Member States and Commission, in the framework of their industrial policies,
have assisted the European textile and clothing industry in their continuous efforts to
adapt to the developing production and trade conditions. The most important measures
have been taken in the field of commercial policy, in particular with regard to the exception
of the textile and clothing sector from general GATT rules (Multifibre Arrangement until the
end of 1994). In other areas, such as regional, research and development, education and
training, export promotion, information and cooperation policies, public authorities have
accompanied initiatives of the firms in this sector with particular attention to SMEs.

The initiatives and programmes of the Commission have been the subject of Council
discussions, resolutions and conclusions, as recently as in 1992 and 1994. The
Commission's "Report on the Competitiveness of the European Textile and Clothing
Industry" [8] has not only analysed the situation of the industry and the factors determining
its international competitiveness, but has also described industrial strategies and the
measures taken by the Community in support of the industry. Member States and the
Commission are in the process of implementing the Council's comprehensive programme
of April 1994. Some progress has already been achieved [9 ]

Existing **measures in the framework of the EU's textile trade policy** cover in the first
place the application of the UR Agreement on Textiles and Clothing (ATC). Special efforts
of the EU and its Member States have been done in the field of improvement of market
access to third countries. The EU as a major trading partner in world textile trade will as a
priority continue to strive for the progressive opening of all markets and for equitable and
more favourable trade conditions through the application of the new ATC. In this context,
the EU's export promotion programme (EXPROM) should gain high priority. But also
safeguard, anti-dumping and anti-subsidy measures as well as the fight against fraud and
counterfeiting are part of the EU's commercial or trade-related policy in favour of the
industry, including the textile and clothing sector. In particular the last area deserves
particular attention. Member States and the Commission have to improve their existing ad
hoc measures (TAFI Programme) in order to fight the growing fraudulent circumvention of
their trade policy measures. Council and Commission have recently underlined this
necessity specifically regarding the textiles and clothing sector in their joint declaration of
12 June 1995 and a new action plan is in the process of being implemented.

The most important **accompanying and supporting initiatives and programmes of**
**Member States and the Commission in the other policy areas** are concerning research
and technological development, training, diversification and conversion, information and
communication as well as cooperation.

COM(93)525 final of 18 November 1993.

Report on implementation of the Council resolutions and conclusions on industrial policy,
Commission working paper, SEC(95)437 final of 22 March 1995.

The Structural Funds provide an important support to the Member States' efforts to
restructure and modernize their industries. The global budget of the Structural Funds is of
the order of 155 billion ECU (1994 prices) for the period 1994 to 1999; a significant part
has been foreseen for the above purpose, in particular for the most disadvantaged EUregions.

- In research and technological development (RTD) the Fourth Framework Programme of
the EU with a total budget of more than 13 billion ECU for the period 1994 to 1998 has
concentrated on generic technologies for widespread use in all sectors of activity.
Research on information and communications technologies and industrial technologies
have been reinforced and will have spin-off effects for many sectors, including textiles
and clothing. The use of new technologies by small firms has been encouraged by a
new financial instrument to favour the dissemination of findings of Community research.

- Regarding training, the European Social Fund with its objective 4 represents an
important instrument for the adaptation, requalification or reconversion of employees in
all economic sectors, including the textile and clothing sector. Objectives 1 and 2 of the
Social Fund take into account the requalification of employees of sensitive sectors being
subject to a restructuring process. Moreover, the Commission disposes of the
Community initiatives ADAPT and EMPLOYMENT (1.4 billion ECU each) which by a
transnational approach aim at creating new job possibilities. In view of further losses of
employment in the textile and clothing sector the existing programmes in the different
Member States and EU regions have to be adapted for all professional categories, in
particular for the most affected, in order to develop the necessary competences and to
organize the workforce according to future needs.

- For diversification and conversion of the EU textile and clothing sector, the Structural
Funds provide substantial support for the regions hardest hit by the necessary
adaptation of the textile and clothing industry. The Commission's special RETEX
programme of more than 600 million ECU for the period 1994 to 1999 will speed up
diversification and modernization of production of viable firms in all sectors in regions
heavily dependent on the textile and clothing industry. The programme is presently
reconsidered in order to better serve the needs of the industry and the regions. The new
generation of Community programmes 1994 to 1999 tries to respond to industrial
change with measures to support modernisation of the manufacturing base at
transnational levels.

- The improvement of the flow of information, communication, cooperation and the
dissemination of experience is another important area for support. The European Textile
and Clothing Observatory (OETH) at a general level, and the BC-Net, the Business
Cooperation Centre, Europartenariat, the Interprise programme and others for special
purposes try to facilitate cooperation and partnerships also in the European textile and
clothing sector.

The Commission services will soon publish a comprehensive guide for the enterprises of
the EU textile and clothing sector covering the details of the variety of Commission
initiatives presently available also for this sector.

**10**

V. SOME FUTURE POLICY PRIORITIES

**The growing importance of exports and the necessary internationalisation of the**
**European textile and clothing industry represent a new challenge to the European**
**industry.** It will be crucial that the industry will actively engage in the response to this
challenge in terms of preparing, organizing and exporting successfully European
products. Taking into account the structural situation of this sector, in particular its big
number of SMEs, not only the enterprises will have to develop new cooperative and
complementary strategies for the improvement of their future competitiveness, but also the
Member States and the EU will have to reinforce and adapt their accompanying measures
for the future. The implementation of the comprehensive programme adopted by the
Industry Council in April 1994 and the already existing accompanying programmes in the
EU and its Member States should continue with a high priority. **In order to effectively**
**contribute to the solution of the industry's problems Member States should**
**reconsider and improve their policies regarding all factors which determine the**
**competitiveness of the EU industry, including environment, energy and labour costs.**

In view of the described internationalization and in line with the industry's and enterprises'
strategies, initiatives in the following areas should be more profoundly restructured and
reinforced.

_A._ _External_ _policy_

**1.** **Exports to third countries**

Regarding this new **key strategic instrument** for the European textile and clothing
sector, **the Commission intends to discuss with Member States the**
**possibilities to develop a new comprehensive initiative which goes beyond**
**presently existing export promotion measures.** Such an initiative has to provide
a more comprehensive organisational framework which would **at the same time**
guarantee **an efficient opening up of third** **countries'** **markets and a maximum**
**use by the sector of newly existing export possibilities:**

The following measures would facilitate industry efforts to develop and effectively
apply new export strategies:

       - The reduction of tariffs according to the engagements taken in the UR and the
elimination of non-tariff barriers have to be closely monitored. In this context, a
maximum of information and transparency has to be made available. A
database on non-tariff barriers in the textile sector has been established in the
Commission, which has regularly to be furnished with relevant information with
the help of exporting firms and Member States' authorities.

       - Non-fulfilments of obligations under the UR and new non-tariff barriers to trade
have to be identified and taken to the competent fora. A flexible administration
of quotas under the ATC should only be granted to countries which fully respect
their obligations under WTO rules and which are prepared to consider
accelerated access to their markets.

       - In cases of higher European export potential, systematic efforts have to be made
in order to achieve additional market access in third countries, both in
industrialized and newly industrialized countries, by acceleration of the
implementation of UR results to be compensated, where applicable, by EU
quota liberalisation.

  - The Member States' and Commission's export promotion measures have to be
reconsidered, better coordinated and improved in budget terms. Export
promotion credits in the draft 1996 EC budget, which have been reduced by the
Council to a "pro memoria", should be reinstated and increased during the
second reading of the 1996 budget.

**2.** **Further WTO integration**

In the light of future economic developments in the textile and clothing sector and
of the willingness and success of the industry to engage in market oriented
strategies and in exports to third countries' markets, the Community has to
carefully examine how to proceed with the further integration of textile and clothing
products into the WTO system. Generally, a more rapid integration of products
under quantitative restrictions could be used as lever for the accelerated opening
of third countries' markets. If accelerated market access could be obtained only
from certain third countries it would also be worth examining the adequate
liberalisation of selected quotas.

**In** **view of the prevailing situation of the EU industry, certain effects of the**
**liberalisation and integration process also on production and employment**
**could be accelerated or delayed by the selection of products and the timing**
**of their integration or liberalisation.** However, this can only be decided with a
reasonable degree of certainty, on the basis of newest data which reflect the
economic situation at the time of integration. Moreover, this has to be linked to the
factual progress in the access to third countries' markets. These are the main
reasons for which the Community has until now only taken a decision on the
products to be integrated in the first phase of the integration process (1.1.1995)
and has not yet decided on the second and third stages of integration of the textile
sector into the WTO-system. The Commission's preparatory work regarding the
selection of products to be integrated at the beginning of the second phase
(1.1.1998) will start in the first half of 1996.

**3. Fight against fraud and other unfair trade practices**

In the textiles and clothing sector, the EU and its Member States are confronted
with growing fraudulent circumvention of their trade policy measures. The EU
industry, on the other hand, is facing the increasing problem that its industrial
models and designs are copied in third countries. Therefore, great importance
has to be attached to the fight against fraud in this sector. It becomes even more
important to rely on a strict compliance with contractual and regulatory provisions
as well as on fair trade practices since the EU textile and clothing sector faces
major changes in its trading and competitive environment.

The implementation of the Joint Declaration by the Council and the Commission
on the fight against fraud of 12 June 1995 has urgently to be accelerated. The
Commission has to improve its existing TAFI programme. Further considerations
must be given to new technologies and special measures to fight fraud in textiles.
Practical steps have to be taken to prevent the circumvention of existing quotas by
fraudulent declarations concerning origin and to categorically apply existing
provisions of the EU's bilateral textile agreements and administrative
arrangements under the WTO Agreement on Textiles and Clothing.

**12**

Regarding the violation of intellectual property rights, counterfeiting which
particularly damages the European high fashion textile and clothing products has
to be more efficiently attacked.

The Commission will apply in a vigorous manner the reinforced trade policy
instruments to fight unfair trade practices, such as dumping and subsidizing, in
accordance with WTO rules.

_B. Internal competitiveness policies_

**1-** **Industrial cooperation and information technologies**

The Commission's Communication on an "Industrial Competitiveness Policy for
the European Union" [10] has already defined industrial cooperation as priority to
enhance competitiveness and presence of EU companies in third countries. More
cooperation between Community enterprises is also essential for the promotion of
exports of the textile and clothing sector if its future in the EU is to be secured.
Many traditionally independent enterprises so far were hesitant to share new ideas
with their competitors, but in future it will be unavoidable if enterprises want to
survive in the long run. The future necessity to have more relevant information on
third countries' markets, to follow third countries' markets in their developments,
to develop products accepted by customers on these markets and to know about
the marketing and distribution channels in those countries goes beyond the
possibilities of many industrial enterprises, in particular SMEs. Therefore,
information networks based on new information technologies are expected to
form the necessary basis for enterprises' initiatives. The Commission is currently
already supporting the development of several private sector projects in this area.
In this context, also the OETH, which has already entered into a period of
reorientation of its services according to future needs of the sector, could play an
important role.

**The implementation of the Information Society will change profoundly the**
**ways of conceiving, producing and distributing textile and clothing products**
**and will offer considerable new opportunities to the European firms. It is**
**essential they take a leading role in this process without further delay.**

International cooperation and sub-contracting would help In order to provide the
required competitivity and flexibility in production and would also be a way for
Community enterprises to penetrate third markets. The example of outward
processing (OPT) should underline the merits of such cooperation. The need to
market products in an effective and competitive way, including an extended
servicing of customers, could be easier fulfilled in cooperation with the
distribution.

10 COM(94) 319 final of 14 September 1994.

**13**

Certainly international industrial cooperation, in order to be efficient and
successful, requires serious EU efforts and progress in the improvement of access
to third countries' markets. **The promotion of cooperation schemes taking into**
**account the particular needs of the textile and clothing sector, including**
**international cooperation programmes, in particular with neighbouring**
**countries in middle and eastern Europe and in the mediterranean region, and**
**the development of standard cooperation approaches for SMEs should,**
**therefore, be another priority for the Member States' and the EU's industrial**
**policy.** Already now, financial assistance is made available by the Commission
within various schemes, recently reinforced regarding international cooperation.

The Commission is also engaged in the development of a programme which
should increase the competitiveness of European sub-contractors in the textile
and clothing industry and which will cover four components: information,
communication between buyer and sub-contractor, promotion of sub-contractors
and training.

**2.** **Training "for export"**

In view of expected further considerable losses of employment in textiles and
clothing, the existing programmes for professional training and retraining in the
different EU regions and regarding the most seriously affected professional
categories will have to be adapted. New strategies have to be implemented in
order to develop the necessary skills and the adequate organisation of the
workforce needed in the future. This major task has to be taken up in the
framework of the Member States' and the EU's general employment policy and
the European Structural Fund.

**More specifically and in addition or supplementary to those programmes,**
**more market and export oriented training programmes for the relevant**
**management levels of enterprises in the textile and clothing sector have to**
**be developed and promoted** in order enable the enterprises to master the
challenges of future increased competition on world markets. SMEs have to be
systematically encouraged to participate.

Consequently, the extension and intensification of training programmes for those
management levels, including export workshops and international exchanges of
views, seem to be another priority for a new policy orientation.

3. Special **product and** regional aspects

Although the information of the study regarding special effects of the liberalisation
process under the UR is not very complete, **it seems clear that the production in**
**certain EU regions will suffer earlier or more from future international**
**developments than others.**

For Portugal, a Community grant of financial assistance for the modernisation of
the textile and clothing industry amounting to 400 mio ECU has been recently
approved [11] . As to Greece, this region is not only confronted with UR results, but
at the same time with certain special disadvantages. Following the Council
Declaration of 6 March 1995, the Commission has been charged to study the

O.J. n° L 86 of 20 April 1995, p. 10

**14**

particular situation of the Greek industry and to make proposals in 1995. In
application of this mandate, the Commission is in the process of evaluating the
problem and will define its proposals and communicate them to the Council as
soon as it has concluded all the necessary aspects of its analvsis. The
Commission knows that also some regions in other Member States could be
similarly affected, in particular concerning the expected UR impact on European
products of lower quality. This will have to be examined and assessed, as well as
the general aspect of possible economic repercussion of any proposals on ihe EU
textile and clothing industry as a whole.

VI. CONCLUSIONS

**The main general conclusions** of this Communication may be summarized as follows:

   - On the basis of the necessary efforts of its enterprises supported by an adequate
accompanying industrial competitiveness policy, the European textile and clothing
industry **will be able to maintain a major economic importance** for the European
economy also in future.

    **The adjustment process** of the industry, in order to meet the challenges of changing
world markets and improved worldwide competition, **will have to continue,** even if this
would imply some further losses in European production and employment.

    **There are many factors** determining the industry's further development, such as the
EU's economic growth, including the development of consumption, labour, environment
and energy costs, monetary developments, new technologies, as well as new
preferential arrangements of the EU with its neighbouring countries, including the
Customs Union with Turkey, and the UR results.

   - The impact **of the** UR integration process, as far as **it** can be determined separately
**from the** effects of other factors, will not lead to changing the overall trend of the
sector. The integration will in any case take into account the achievement of improved
access to markets in third countries, as agreed in the UR. This improved access will
**open new** possibilities, which require a reorientation of existing strategies and policies
by the industry, the Member States and the Commission.

   - The forecasted future loss **in** employment represents a key problem. Its economic
importance and social impact'clearly extend beyond the focus of the European textile
and clothing sector and deserve, therefore, special political attention in the
framework of **the** EU's employment policy.

   - The UR results combined with the effects of other factors, will have a differentiated
impact corresponding to products and EU regions which should be taken into
account in the development of the EU and Member States policies. But it is
important that industry and governments continue to take the necessary adjustment
measures to improve the competitiveness of this sector.

**At the** **industry** **level companies have to reconsider their individual strategies and**
**adapt them** to the developing new structures of production and markets worldwide at
the horizon of the years 2000. **Discussions on practical ways and means should be**
**intensified and include the SMEs.** The possible benefits of cooperation, subcontracting and industrial alliances within the EU or with partners in third countries, in
particular those neighbouring the EU should be systematically examined. **A new policy**
**orientation towards encouraging exports and the necessary qualification of the**
**companies'** **workforces,** in particular in SMEs, should be undertaken.

**At the level of Member States and the Commission** existing accompanying industrial
policy measures covering the textile and clothing sector have to be adapted and where
necessary reinforced, in accordance with the Council's comprehensive programme of
April 1994. In this context, Member States should reconsider and improve their policies
regarding all factors determining the competitiveness of the EU industry, including
environment, energy and labour costs **Highest priority should be given, in**
**cooperation with interested parties of the sector, to the development of a new**
**framework which would guarantee an efficient opening up of third countries'**
**markets. At** the same time a maximum utilization by the textile and clothing sector of
new export possibilities as well as of new developments provided by the information
society should be ensured. Member States and Commission should develop special
export training programmes and reconsider the efficiency of their individual export
promotion programmes in the European perspective. Also existing programmes for
cooperation between enterprises at national, European or international levels should
specially take into account the export perspective. Regarding all these initiatives, **the**
**Commission can play a catalysing role.**

Member States in cooperation with the Commission have also to strengthen their fight
against fraud, counterfeiting and other unfair trade practices, including dumping in this
sector. Further considerations have to be given to new technologies and new practical
approaches.

**At Community** level additional or supplementary measures should **only be**
**considered with respect to those problems of the European textile and clothing**
**industry which cannot be solved at national** level **or could better or more efficiently**
be **solved at** European level

Table la

EU : Developments in Textiles and Clothing 1984-1994 (Summary Table)

Production [1 ]

(Total changes %)

Employment [2 ]

(Total changes %)

Clothing [4 ]

+ 42.3

-32.5

-42.3

-22.0

-6.2

-37.6

-34.8

-8.1

+ 13.0

+ 26.8

-0.4

Textiles-^

-26.1

-27.9

-34.2

-48.4

-37.3

-44.4

-23.5

-16.2

-21.1

-6.1

-20.3

Clothing [4 ]

-38.4

-32.1

-48.7

-8.9

-7.9

-30.0

-32.6

-31.7

    - 29.9

+ 6.5

-22.2

B

DK

DE

GR

ES

F

IRL

IT

NL

P

UK

Textiles [3 ]

+ 2.6

-24.3

-20.5

    - 19.7

     - 1.3

-21.3

+ 25.1

+ 16.7

-3.0

+ 10.5

    - 15.1

EU-12 -5.4 -19.8 -27.2 -26.4

Based on production in Mio ECU (constant 1990 prices) in firms of all sizes.
Based on number of employees in firms of all sizes.
Textiles ='(NACE43 + 455).
Clothing = (NACE453 + 454).

Source : OETH/DG 111

_**s**_ _**n**_

Production

```
textile^. ïncl. knitwear

```

**|**

```
 1994

 5,213

 1,041

16,042

 1,749

 7,739

14,435

  718

32,507

 2,106

 4,068

10,549

96,196

```

```
 1991

 5,384

 1,180

20,744

 2,053

 8,181

 14,973

  648

 32,249

 2,182

 4,757

 10,800

103,151

```

```
 1992

 5,500

 1,139

19,115

 1,877

 7,666

14,720

 683

31,672

 2,004

 4,470

10,729

99,574

```

```
 .1993

 5,135

 1,021

16,949

 1,758

 6,978

13,658

 700

30,295

 2,004

 3,919

10,693

93,110

```

```
AAR*(%)

 84-94

   0.3

   -2.7

   -2.3

   -2.2

   -0.1

   -2.4

   2.3

   1.6

   -0.3

   1.0

   -1.6

   -0.6

```

```
 1990

 5,790

 1,173

20,620

 2,256

 8,594

 15,845

  649

 32,024

 2,202

 4,552

 11,947

105,652

```

```
 1989

 5,384

 1,285

20,228

 2,344

 8,981

 16,526

  605

 32,953

 2,164

 4,288

 12,437

107,195

```

```
 1988

 5,199

 1,247

20,249

 2,394

 8,559

 16,589

  579

 30,679

 2,103

 4,301

 12,975

104,874

```

```
 1987

 5,159

 1,303

20,249

 2,466

 9,204

 16,780

  556

 30,263

 2,059

 4,429

 13,202

105,668

```

```
Country

Belgium

Denmark

Germany

Greece

Spain

France

Ireland

Italy

Netherlands

Portugal

UK

EU12*

```

```
 5,112

 1,375

20,166

 2,177

 7,838

 18,332

  574

 27,861

 2,171

 3,682

 12,425

101,714

```

```
1984 I 1985

        I
     I

```

```
 1986

 5,199

 1,327

20,661

 2,416

 8,869

 17,334

  539

 29,430

 2,081

 4,351

 12,640

104,848

```

```
 5,153

 1,350

20,764

 2,263

 8,199

 17,857

  545

28,182

 2,226

 3,974

 12,927

103,438

```

Units: ECU million (constant 1990 prices) in all sizes of firm
Source: OETH, Eurostat, DEBA GEIE, Comitextil

Note: Spain and Portugal became members in 1986

Average Annual Rate of Growth
Estimates in bold

Clothing, e x c l . knitwear

## lllilllll

##### llilpp lisliii

###### llllllll

### lllllii

#### iisilll

;||!ll|||ill|

lllliifll

##### illliffl!

SillHllS [: ]

_W&Mk_

Country

Belgium
Denmark
Germany
Greece
Spain France

Ireland

Italy
Netherlands
Portugal
UK

EU12

1984

1,459
708
14,371 I
890!
3,294
11,904 i
325^
18,870 !
486 I
1,444
5,829;

59,581

; ;;';:|!|i|

1,884

537
10,867

791
**3,111**
8,013

253
19,250

535
2,310
5,551

53,102

2,052

447

9,679

775
**2,728**
7,324

225
16,419

549
2,080
5,551

47,829

1,856

511

- 12,166

818
3,393
8,674

263
18,386

583
2,361
5,442

54,453

1,743

503
12,252

786
3,652
9,178

302
18,386

566
2,340
6,040

55,748

**2,076**

**478**
**8,295**

694
**3,091**
7,425

212

17,338

**549**
1,831
5,805

47,794

3.6

-3.9

-5.3

-2.5

-0.6

-4.6

-4.2

-0.8

1.2

2.4

-0.0

-2.2

1,584

**505**
12,411

790
3,575
9,518

**297**
18,607

**536**
2,120
6,004

55,947

1,318

541

12,925

856
3,389
10,096

317

18,625

491
2,242
6,173

56,973

1,398

635

13,489

810
3,506
11,124

341

18,312

418
2,333
6,240

58,606

1,443
744

14,114

882

3,469
12,014

333

19,213

482

 - 2,066
6,197

60,958

1,503

718
14,138

876
3,583
11,950

332

19,563

468
2,576
6,197

61,905

Units: ECU million (constant 1990 prices) in all sizes of firm
Source: OETH, Eurostat, DEBA GEIE, Comitextil

Note: Spain and Portugal became members in 1986

Average Annual Rate of Growth
Estimates in bold

impioyment

ïxtiles, incL. knitwear

C o u n t ry 1984 1985! 1986 1987 1988 1989 ilQSI 1992 **1993:** 1994
_**mm**_

**AAR*(%)**
**84-94**

-2.98

-3.21

-4.09

-6.41

-4.55

-5.69

-2.64

-1.76

-0.15

-2.34

-0.63

-2.24

-3.12

-4.28

Belgium

Denmark

Germany

Greece

Spaiq

France

Ireland

Italy

Luxembourg

Netherlands

Portugal

UK

EU12

Austria

Finland

Sweden

```
37,341; 36.877! 35,157

              n.a.j

```

61,312|

17,395 !

266,690;

```
 84,563 |

236,487!

253,218

 13,220

434,967

  391

 23,062

173,018

253,288

```

```
 61,368

 18,120

262,071

 89,447

220,307

244,493

 12,723

424,425

  383

 23,092

168,287

255,944

```

```
 57,446

 17,817

 251,871

 85,539

 221,602

 220,848

 12,158

 420,213

   371

 23,458

 170,080

 255,058

1,737,461

```

```
 59,604

 17,999

 257,749

 88,027

 227,426

 230,685

 12,528

 421,266

   374

 24,375

 162,667

 260,370

1,763.070

```

```
 56,193

 17,153

 246,981

 84,059

 223,164

 205,785

 11,623

 421,266

   356

 22,744

 170,815

 260,370

1,720,509

```

```
 59,005

 16,318

 245,450

 81,365

 219,594

 198,581

 11,728

 420,807

   527

 22,946

 175,085

 251,258

1,702,664

  32,340

 11,082

 14,395

```

```
 57,467

 15,619

 238,780

 73,870

 209,667

 183,711

 11,814

 411,858

   533

 22,947

 179,112

 231,125

1,636,503

 32,180

 10,856

 14,354

```

```
 56,103

 14,793

 232,950

 64,538

 198,929

 180,435

 11,517

 407,929

   518

 22,543

 175,085

 214,500

1,579,840

 30,833

  8,861

 11,625

```

```
 45,326

 12,549

 175,585

 43,594

 148,368

 140,905

 10,113

 364,324

   385

 18,200

 162,405

 201,957

```

1,323,711

```
 24,100

```

```
 53,787

 14.519

 218,095

 55,331

 164,099

 170,632

 11,479

 389,388

   492

 21,500

 172,328

 202,989

1,474,639

 28,641

  7,785

 10,478

```

```
 49,809

 13,790

 194,202

 48,064

 153,145

 153,785

 11,113

 359,649

   423

 20,000

 167,634

 201,726

1,373,340

 25,116

  6,819

  9,200

```

```
6,912

9,200

```

```
1,817,611

```

```
1,780,660

```

```
21,8771 31,791

  n.a.j 12,089

  n.a.j n.a

```

**CHANGE**

**84-94**

-15,986

-4,846

-91,105

-40,969

-88,119

-112,313

-3,107

-70,643

-6

-4 862

-10,613

-51,331

-493,900

-13,241

-5,177(1)

-5,195(2)

.90(1)

.56(2)

Units: Number of employees in firms of all sizes
Source: GETH. Ccmitextil, Eurostat

Notes: 1) Spain and Portugal became members in 1986
2) Data from .334 to 1987 estimated by OETH

- Average Annua! Rate of Growth

(1) For the period 1988-94
(2) For the period 1989-94
_\_

_**CL**_

Employment

lothing, excL. knitwear

CHANGE

Country 1S84 1985 x1986 1987: ;:l98a _mm_ _mm_ _mm_ _m&_ _mes_ _mm_ _[""Wmm ]_ _WMWm_

23,137

9,409

124,925

31,660

142,000

141,202

8,848

225,001

400

7,633

128,875

168,566

29,807

9,897

183,211

39,547

151,000

150,696

10,973

308,690

508

9,250

137,700

203,300

1,234,579

30,657

9,009

187,151

39,377

156,000

153,295

10,579

306,651

505

9,900

134,604

218,916

1,256,644

21,772

8,854

111,307

28,015

133,483

139,035

8,326

222,751

376

7,183

121,143

168,757

27,917

9,576

173,158

37,350

149,000

148,650

10,498

296,348

496

8,500

134,604

180,800

1,176,897

1,103,581 1,011,656 971,002

25,404

10,191

145,047

34,953

148,000

146,782

9,900

272,586

466

8,050

132,484

169,718

Belgium

Denmark

Germany

Greece

Spain

France

Ireland

Italy

Luxembourg

Netherlands

Portugal

UK

EU12

```
1,320,073 | 1,290,607 1,254,623

```

35,370

13,041

217,127

30,744

144,932

198,577

12,344

326,139

961

10,244

113.763

216,831

-4.74

-3.80

-6.46

-0.93

-0.82

-3.50

-3.86

-3.74

-8.93

-3.49

0.63

-2.48

-3.02 [ j ]

```
 33,605

 13,815

212,148

 30,101

136,158

191,458

 12,704

306,320

  588

 10,277

116,416

227,017

```

```
 33,444

 13,283

206,061

 29,267

138,460

185,515

 12,619

280,421

  580

 10,492

117,769

226,714

```

```
  32,461

  11,449

 195,841

  37,939

 145,335

 175,738

  11,908

 309,998

   568

  10,385

 127,920

 227,555

```

1,287,097

30,332

9,308

.187,875

38,976

161,000

161,065

10,871

303,979

523

10,350

131,321

233,629

1,279,229

-13,598

-4,187

-105,820

-2,729

-11,449

-59,542

-4,018

-103,388

-585

-3,061

7,380

-48,074

-349,071

Unit?: Number of employees in firms of all sizes
Source: OETH, DEBA GEIE, Eurostat

Notes: 1) Spain and Portugal became members in 1986
2) Data from 1984 to 1987 estimated by OETH

- Average Annual Rate of Growth

cr

**f O**

Table _2_

**Hourly** wage costs **in the clothing industry**
**in United States dollars**
**(wages + social contributions)**

Country or zone 1990 1991 1993

_North America_

Canada 8.76 9.53 9.14

United States 6.56 6.77 8.13

Mexico 0.92 1.17 1.08

_European_ _Community_

Germany 7.23 14.81 17.22
Belgium 12.92 12.57 16.20
Denmark 15.93 15.91 17.29

Spain 7.08 7.11 6.41
France 12.52 12.41 14.84

Greece 4.33 4.26 5.85

Ireland 7.50 7.50 7.44

Italy 12.50 13.50 12.31
Netherlands 14.71 14.95 15.4]
Portugal 2.30 2.65 3.03
United Kingdom 8.02 7.99 8.42

_Western Europe_

Austria 9.96 9.84 14.30

Finland 14.16 13.98 9.25

Norway 16.37 15.92 18.09
Sweden 17.78 18.52 15.84

Switzerland 14.19 14.19 18.08

_Eastern Europe_

Bulgaria 1.25 0.25 0.26
Hungary 0.92 **1.19** 1.62
Poland 0.50 0.42 0.44

Romania 1.73 0.55 0.25

Russian Federation 1.69 0.49 0.57

Slovakia — — 1.14

Former Czechoslovakia 2.79 1.59 1.29

_Middle East_

Israel 5.17 5.73 5.54

Syrian Arab Republic 0.71 0.81 0.84
Turkey 1.35 2.31 3.29

_Africa_

South Africa 1.07 1.12 1.12

Egypt 0.34 0.32 0.43
Ethiopia 0.57 0.57
Kenya 0.47 0.44 0.23

Mauritius — — 1.04

Morocco 0.92 0.99 1.06

Nigeria 0.20 0.20 0.27
Tanzania, United
Republic of — 0.26 0.18
Tunisia 1.46 1.46 1.54

Uganda 0.16 0.18
Zambia — — 0.24

Zimbabwe — 0.51 0.35

Country or zone 1990

_South America and_ _Oie_ _Caribbean_

1991

Argentina
Brazil

Colombia

Costa Rica

Dominican Republic
Honduras.

Jamaica

Peru

Uruguay
Venezuela

_Asia_ — _Pacific_

Australia

Bangladesh
China

Korea, Republic of
Hong Kong
India

Indonesia

Japan
Malaysia
Pakistan

Philippines
Singapore
Sri Lanka

Taiwan, China

Thailand

Viet Nam

1.07 1.81

0.98 0.76
1.23 1.18
1.09 0.88
0.67 0.64
0.48 0.48
0.91 0.83
0.86 0.88
1.41 1.59
1.11 1.38

8.79

0.26

2.46

3.05

0.33

0.16

6.34

0.56

0.24

0.46

2.43

0.24

3.41

0.63

9.58

0.24

2.75

3.39

0.25

0.18

7.44

0.62

0.24

0.46

2.72

0.39

3.74

0.59

1991

1.85

0.73

1.22

1.00

2.35

1.48

8.67

0.16

0.25

2.71

3.85

0.27

0.28

10.64

0.77

0.27

0.53

3.06

0.35

4.61

0.71

0.26

Source: Werner International Inc. (1994, New York). See also the _Bobbin_
(Columbia. South Carolina), Sep. 1992.

                                      EU: Foreign Trade JnTexiite$>nd.GJOlhing-(199Ô-1994) |' **SEOT**

**EU** **Imports** **[2 ]**

**1990** **1994** **94/90 (%)**

**EU** **Exports** **[7 ]**

**1990** **1994** **94/90** **(%)**

**Balance**

**1990** **1994**

**i**

83

Textiles'

Clothing

Textiles and
Clothing

000 tonnes

ECU mn

000 tonnes

ECU mn

000 tonnes

ECUmn

2,030 2,725

13,327 16,897

253 312

9,967 11,754

2,283 3,037

23,293 28,651

2,665 3,288

11,774 13,606

1,069 1,636

18,754 27,682

3,733 4,924

30,528 41,288

1 Excluding raw materials
2 Extra-EU only

_**23.4**_

_**15.6**_

_53.1_

_47.6_

_31.9_

_35.2_

_34.2_

_26.8_

_23.3_

_17.9_

33.0

_23,0_

-1,450 -1,888

-7,234 -12,637

-634

1,553

-816

-8,787

-563

3,291

-1,325

- 15,928

**Ratio** **£/l** **(%)**

**1990** **1994**

76

113

24

53

61

76

124

19

42

62

69

Source: Eurostat, OETH

**cr**

```
EXTRA-EU TRADE BALANCE IN MFA TEXTILE AND CLOTHING PRODUCTS 1991-1994

           AND % SHARES 1994 OF MEMBER STATES

```

i

!
IMPORT |

!

| 1991

! 1992

i 1993

; 1994

| i % 1994

| . ... ;

I ] |

: EXPORT j

_•_

1991

I 1992

1993

: 1994 .

! % 1 994

i

iBALANCEi

! 1991

i 1992

i 1993

j 1994

i % 1994

Danemark

985.795

944.949

874.011

949.817

2,51

Danemark

657.588

744.914

683.827

692.281

2,84

Danemark

-328.207

-200.035

-190.184

-257.536

1,91

Extra-CE

CEE 12

32.852.269

33.587.453

35.336.847

37.878.002

100

CEE 12

20.226.728

21.002.713

21.953.904

24.416.668

100

CEE 12

"-127625.541

-12.584.740

-13.382.943

-13.461.334

100

Allemagne

13.960.445

13.804.771

15.114.008

15.256.042

40,28

Allemagne

6.979.220

7.297.358

7.597.681

7.940.604

32,52

Allemagne

-6.981.225

-6.507.413

-7.516.327

-7.315.438

54,34

! I
Total produits textile-habillement

835.299

975.975

2,58

Espagne

771.249

816.747

830.616

942.294

3,86

Espagne

-258.393^

-440.081

-4.683

-33.681J

0,25

Benelux

3.700.204

3.990.153

4.327.037

5.179.338

13,67

Benelux

1.849.675

1.866.031

2.130.766

2.396.560

9,82

Benelux

-1.850.529

-2.124.122

-2.196.271

-2.782.778

20,67

France

4.452.400

4.594.322

4.874.504

5.131.140

13,55

France

2.529.351

2.638.109

2.650.009

3.069.502

12,57

France

-1.923.049

-1.956.213

-2.224.495

-2.061.638

15,32

Italie

2.978.346

3.210.084

3.050.171

3.705.027

9,78

Italie

4.172.223

4.380.536

4.766.812

5.848.882

23,95

Italie

1.193.877

1.170.452

1.716.641

2.143.855

-15,93

UK

5.079.271

5.140.896

5.638.524

5.979.518

15,79

UK

1.928.782

1.853.090

2.153.481

2.324.162

9,52

UK

-3.150.489

-3.287.806

-3.485.043

-3.655.356

27,15

AMF

Irlande

191.424

164.415

148.319

156.475

0,41

Irlande

88.633

89.444

106.214

103.746

0,42

Irlande

-102.791

-74.971

-42.105

-52.729

0,39

1000 ecu

Grèce

237.647

228.027

231.452

289.110

0,76

Grèce

305.215

307.882

282.236

290.951

1,19

Grèce

67.568

79.855

50.784

1.841

-0,01

Espagne Portugal

1.029.642 237.095

1.256.828 253.008

0,67

Portugal

944.792

908.602

752.265

807.686

3,31

Portugal

707.697

655.594

508.743

552.130

-4,10 `ÛJ`

```
          cr

        cr

```

253.008

243.522

255.556

_Tableau 18a - Evolution_ _des taux de change, corrigés_ _de_ _l'inflation_

_**(1984 - 1993)**_

Table 4a

Portugal

Espagne
Belgique
Allemagne
Grèce

France
Pays Bas

Italie
Irlande
Royaume Uni
Suède

Pologne

Pakistan

Indonésie

44 Turquie

**120**

**100**

80

dice

1984 = **100)**

60

40

20

0

```
      1984 1985 1986 1987 1988 1989

```

Source : FMI, Eurostat, Analyse Mercer Management Consulting

1990 1991 1992 1993

Table 4b

###### **EU: Trade deficit in textiles and clothing** **and the ECU exchange rate against the US$**

```
        (1988-1994)

```

```
ECU mn

-6000

-8000 h

-10000

-12000

-14000

-16000

```

ECU per US$

1.00

0.75

```
-18000

```

0.70
1988 1989 1990 1991 1992 1993 1994

EU Deficit ECU per US$

KSI

Source: Eurostat, DEBA; Including raw materials

_7C_

**ISSN 0254-1475**

###### **COM(95) 447 final**

# **DOCUMENTS**

**EN** **10 11 13**

**Catalogue number :** **CB-CO-95-523-EN-C**

**ISBN** **92-77-94417-X**

**Office for Official Publications of** **the** **European Communities**

**L-2985** **Luxembourg**