European Apparel and Textile Organisation
24 rue Montoyer – B – 1000  Brussels
phone: + 32.2.285.48.81 – Fax : +32.2.230.60.54
e:mail : william.lakin@euratex.org
Web-site : www.euratex.org

Address to the Press Conference by the President Filiep Libeert - The Ambitions of the EU Textile and Clothing Industry in respect of Market Access and the Hong Kong Ministerial.

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Ladies and Gentlemen,

Thank you for being with us today as Europe’s textile and clothing industry takes this opportunity of making more widely known its market access ambitions on the eve of the Hong Kong Ministerial meeting of WTO.

I use the term ambition advisedly, and I want to take AIRBUS as a basis for comparison.

The turnover of the EU textiles and clothing industry is ten times that of Airbus. Airbus employs 53.000 people. Textiles and clothing employ more than seven times that number for export alone. We export 20% of our turnover. In terms of value added and employment in EU manufacturing industry, we still consider ourselves among the top three or four.

These may be surprising figures after all the talk that we have heard in the past about T-shirts against Airbuses. I can only hope that they demonstrate graphically that open markets for our exports have already and will in the future contribute to maintain employment in the European Union.
What fits better the jobs and growth strategy of President BARROSO and the objectives of the Lisbon Agenda than the achievement of open markets for an industry which allies flair, innovation, and technology in its products to a visible social dimension lacking in so many of our competitor countries?

The European Union should foster its manufacturing industry. Thanks to its exports, it is the first source of income and welfare in the EU. The industry accounts for more than 75 % of the EU exports. Moreover, 80 % of the private R&D efforts are realised by the EU industry, not by the services economy. Europe should really take into account the interests of its own industry, including its textiles and clothing industry.
So today, I want to concentrate the essential of what I have to say on the future rather than on the past. I hardly need to repeat that the DDA is an unique opportunity for us finally to achieve genuine access to numerous closed or virtually closed third markets. In purely tariff terms many have a long way to go: bound tariffs in green, applied tariffs in yellow, with the red line at 15%.

But here I need to stress that we have to take a belt and braces approach, tackling the issues of tariffs and non-tariff barriers in tandem. They are indissolubly linked in terms of the achievement of market access. And in non-tariff barrier terms the situation is getting worse rather than better.
Let me also add that I cannot see how anyone could possible deny us the right to obtain open markets for our exports when we have the right product at the right price.
We have proved time and time again that when such markets do open, we are able to take full advantage and substantially increase our own sales abroad. S. Korea, Mexico, Chile, Brazil and Russia are excellent examples in this respect.
Turning first to customs duties, our objective is to obtain from WTO partner countries comparable levels of tariff to our own, with at worst rates at a maximum level of 15%. Hence the need for a sectoral approach, within the DDA NAMA process, provision for which is made in Para. 7 of the WTO non-agricultural market access annex in its July 2004 package.

What we are looking for in the context of the Hong Kong Ministerial meeting of WTO and its follow-up is an acceptance from WTO members that globalisation in textiles and clothing is not just a one-way street. The policy should be to obtain comparable levels of tariff, the greatest possible degree of harmonisation, with the shortest possible transitional period. The least developed should be encouraged to make some contribution to this process, but we certainly believe that those efforts need not be of the same magnitude and might take place over a longer time period than is the case for their more advanced competitors, developed and developing alike.

However, our own tariffs – low as they are – cannot be reduced beyond the point at which they cease to be of value to the vulnerable preferential countries, such as the least developed, who benefit from EBA, the ACP countries, or indeed our Pan-Euro Mediterranean partners. In fact, should Europe lower its already very low tariffs any further as long as all the others have not come down to a maximum of 15 % ?
Let's not forget that Europe and the US have fulfilled all their commitments of the ATC (Agreement on Textiles and Clothing) of 1994, resulting in lifting the last import quota on the 1st January 2005.


Nor should there be any way in which developing countries, other than the least developed, can escape from an overall commitment to vastly improve existing market access. Many of those countries by the way have a textile and clothing industry which is highly developed, a situation which has come about to the detriment of companies and jobs in the EU.
The graph on your screen demonstrates in no uncertain manner that some markets are almost impermeable to imports and nigh invisible on the screen, in spite of the size of their population, and the importance of their textile and clothing industry.

Let me say one word about China. We have all seen the spectacular increase in Chinese exports of textiles and clothing, in particular since 2005. This development cannot simply be explained by the objective competitive advantages of Chinese companies. State intervention at different levels give Chinese exporting companies artificial advantages. For us it is very clear: China does not meet the criteria of a market economy.



But to return to market access, all members of WTO should agree NOT to introduce new non- tariff barriers as a prelude to their elimination over the tariff reduction period agreed. These cover a wide range of barriers in the form of additional duties and taxes, technical regulations, minimum import prices, subsidies, excessive licensing requirements, burdensome customs procedures and abusive customs valuation systems. Here we need to pay specific attention to the implementation of GATT disciplines and to ensure that they are not neglected in the trade facilitation context. In saying this, I do accept that in certain cases some barriers may require action on a bilateral basis.

The achievement of these goals will belatedly enable other countries to fulfil the commitment they entered into at the beginning of the quota phase-out period. The fact that Article 7 of the ATC – the Agreement on Textiles and Clothing - requiring improved market access by all WTO members in respect of reduced and bound tariffs and reduction or elimination of non-tariff barriers together with administrative and other obstacles - was never properly carried out by our trading partners, nor insisted upon by our own authorities will remain the mystery of our textile and clothing generation. Today I believe that our own objectives are understood and supported by the Commission and by a majority of member-states.

This understanding and support now has to be translated into tomorrow’s reality. It is here that any scepticism our members might have could be viewed as understandable in the light of past experience – the failure to use Art. 7 of the ATC to full effect (as mentioned earlier), the delay in issuing the guidelines and then implementing them for the China Textile Safeguards, and the difficulties of coming rapidly to terms with abuses of intellectual property rights could indeed baffle the most optimistic among us. Recent Commission initiatives in industrial policy and intellectual property rights, both of which we welcome, now give us a basis for renewed hope. If genuine market access can turn this into a trinity, then scepticism may turn to belief.

In saying this, we are naturally fully aware that the expectations many had earlier this year for a success in Hong Kong may already have been scaled-down. Under such regrettable circumstances, I can only advise that it would be highly unfortunate if precipitate decisions were to be made there which could compromise our future export prospects.
We are of course all aware that the WTO round launched in Doha in 2001, and which bears its name, was clearly focussed on development, especially for those most in need. I believe that our proposals themselves fit well into this overall ambition. They would stimulate South-South trade. They do not require the least developed to make the same efforts as others, and they offer the prospect of ongoing and adequate levels of EU preference, which is particularly important in the context of those who are heavily dependent upon textiles and clothing for export revenue.

Over the years, as we have had occasion to remind you, most notably on April 8th of this year, the EU, and the USA too, have been the preferred export markets for numerous countries. We ask no more and no less than for them to allow us to export to them under the same access conditions.






In summary then, we seek:

Genuine market access to all WTO members through
Tariff reductions down to our EU levels
The elimination of non-tariff barriers
The full participation of all except the least developed
In the shortest possible time
Whilst retaining adequate margins of EU preference

When next you think of textiles and clothing in trade terms, think ten times the size of Airbus.
Then ask yourselves whether such an industry is deserving of your support and of Commission and member-states’ action on our behalf in the Doha Round. I cannot imagine any other response than an unequivocal Yes.

Thank you all for your attention.






Filiep LIBEERT
President
EURATEX