Bridges Weekly Trade News Digest • Volume 8 • Number 35 • 20th October 2004
European Commission Presents Textiles And Clothing Plan
On 13 October, the European Commission released a communication outlining a seven-step plan to enhance the competitiveness of the European textiles industry ahead of the elimination of WTO textiles quotas on 1 January 2005. Building on a June 2004 report of an EC High-Level Group for textiles and clothing, the plan suggests several measures to ensure the continued competitiveness and adjustment of the European textile and clothing sectors. The communication says research and innovation in the sector must be enhanced to "enable a technology breakthrough for clothing manufacture and development of eco-efficient processes, high value products and associated markets with growth potential". The other six steps focus on the need to ensure lifelong education and vocational training, the creation of a reserve fund within European Structural Funds to cover unforeseen crisis in the sector, ensuring intellectual property rights in the field to prevent counterfeiting and piracy, and opening markets.
Under the Agreement on Textiles and Clothing signed as part of the 1986-1995 Uruguay Round, all quotas in international trade in textiles and clothing products are to be eliminated on 1 January 2005. The Commission communication suggests the rapid completion of the Pan-Euro-Mediterranean Free Trade zone as a key part of the EU textiles strategy, as this would enable the sector to maintain cost, quality and proximity advantages. At the same time, the Commission notes that tariff preferences will likely be eroded by liberalisation and so "alternative responses to the concerns of developing countries heavily dependent on textile and clothing exports could be also developed". This statement, which supports the Commission’s 7 July proposal to focus generalised system of preferences (GSP) benefits on the countries most in need, is likely to support the concerns of small, textile-dependent developing countries that have been urging the WTO to take their adjustment needs into consideration (see BRIDGES Weekly, 6 October 2004). Critics suggest that the post-quota textile and clothing trade regime will simply invoke new forms of trade barriers, such as complex rules of origin, use of safeguards, regional agreements such as Euro-Med, proximity requirements and heightened tariff barriers.
The EC Communication "Textiles and clothing after 2005 - recommendations of the High Level Group for textiles and clothing" and its accompanying working document can be accessed.
ICTSD reporting; "Textiles: Commission takes seven actions to help EU textiles industry ahead of 1 January 2005," WTO REPORTER, 12 October 2004.