Production and employment in the textile and clothing sector in various EU Member States (debate) 
President
The next item is the debate on the oral question to the Commission on production and employment in the textile and clothing sector in various EU Member States.
Corien Wortmann-Kool
author suppleant. - Madam President, on behalf of the Committee on International Trade, I would like to set out what is at stake here.
It is about production and employment in the textile and clothing sector in various European Member States. The European Union and China have agreed to a joint surveillance system relating to exports of certain categories of textile and clothing products from China to European Member States, but this system expired on 31 December 2008.
During the last two years, 350 000 jobs have been lost, and the number of companies was reduced by 5% during the same period. In the light of the growing number of enterprises that are ceasing to operate, or relocating production, leading to an increase of unemployment in several regions, I would like to put the following questions on behalf of the International Trade Committee:
Has the Commission or any Member State proposed or requested the extension of the dual surveillance mechanism beyond 31 December 2008 or any other measures in that framework?
What measures does the Commission intend to adopt to protect production and employment in the textile and clothing sector?
Will the Commission continue to monitor real-time market developments, import statistics and customs monitoring and keep the sector informed of the latest developments?
What is the current situation regarding the proposed regulation on 'made in' labels?
What measures have been taken by the Commission to address the proposals adopted by Parliament in its resolution of 13 December 2007?
Catherine Ashton
Member of the Commission. - Madam President, it is understandable in this climate that there is concern about the success of manufacturing in the face of competition, and of course textiles are very important. Employment has continued to drop and production has fallen again - and that is after a couple of years of relative stability. Of course the sector is at the cutting edge of globalisation. Small and medium-sized enterprises play a huge part in this.
Following the end of the Memorandum of Understanding in 2005, we did have the agreement on the joint surveillance system - to which Mrs Wortmann-Kool drew our attention - and it has given us early information about trade flows. We are therefore better able to react in the event of being faced with a sudden surge in our industry. It is also a further step in the transition to open markets designed and developed - as I am sure Members know - with the economic players concerned and in discussion with Member States and with Parliament. By promoting a process of gradual change, we have helped the sector adapt. That has been supported by the social partners. They did not ask for an extension of the voluntary growth levels under the Memorandum of Understanding (MOU) when it ended in 2008, nor have they been asking for a continuation of the surveillance system into 2009 - though I appreciate that some Member States would have preferred us to do so. Imports from China have increased overall, but within reasonable limits. Significant increases in some categories - such as for example dresses, trousers and pullovers - have been balanced by drops in textile imports from suppliers in other countries. So, overall in 2008, only a slight overall increase was realised and markets have absorbed that reasonably well.
The right political responses are not to close our markets or monitoring of the imports. We need to ensure that all businesses can change, adapt, trade and innovate out of current conditions. It is precisely to help businesses like this that the economic recovery plan was endorsed. That, of course, represents a huge boost of 1.5% of EU GDP, which should help the textile and clothing sector. The challenges for the sector predate the current slowdown. Eight of the fifteen applications under the Globalisation Adjustment Fund have been to support textile workers.
The Commission is ready to support initiatives to set up partnerships in the textile and clothing sector designed to anticipate restructuring with the aim of protecting employment and, overall, the sector benefits from the fact that there is a long-standing framework for social dialogue. We welcome Parliament's resolution on the future of the textile sector. We move forward in market access, in funds from the Lead Market Initiative, and in every free trade agreement, as causes dedicated to environmental and social standards. Of course currency devaluation remains on our agenda.
Georgios Papastamkos
Madam President, textiles and clothing are a globalised sector of the economy par excellence, a sector which is characterised by continual change in terms of the place of production and constant restructurings and adjustments to new situations, such as the liberalisation of international trade. For many Member States of the European Union, including Greece, this sector is an important source of exports and employment. However, the considerable number of production units relocating and the constant reduction in employment have taken on worrying dimensions. In addition to structural problems, the acute discrepancy between the import tariffs of the European Union, on the one hand, and of its most important competitors, on the other hand, is playing a negative role. Commissioner, we are talking about a sector which represents an extremely high percentage of overall seizures of pirated products on the borders of the European Union, a percentage which is constantly rising. In this instance, I consider the proposal to set up a European observatory on pirated products to be a good idea, so that we can achieve better coordination between the competent authorities, Member States and Commission services and also conditions of effective cooperation with the private sector. I think we need to adopt regulations on the 'made in' label, which will help to safeguard conditions of fair competition and consumer protection. The establishment of more effective rules of origin is important in terms of the application of tariff quotas within the framework of the generalised tariff preferences and regional agreements. We are being called upon to shape a new framework of cooperative relations between the agencies that implement industrial and regional policy and commitments and to effectively support European undertakings, especially small and medium-sized enterprises, so that they can maintain and further improve their competitive specialisation. I refer to the production of high added value products in terms of quality and design, innovation and the use of new technologies.
Rovana Plumb
We would like to thank you for your replies to the oral questions. I would like to stress that, as is well-known, the textile sector makes a particularly important contribution to the GDP of all the Member States, including Romania. We are well aware that this sector creates new jobs, especially for the female workforce. I agree with and support the measures which you are proposing because, being aware of how important trade is in the current economic crisis, we need to realise how important the measures are which we need to take to protect jobs.
Bearing in mind that the joint surveillance system for textile imports from China was stopped at the end of last year, which I understand was an important tool for monitoring the market, I would like to suggest to the Commission that it attaches greater importance not only to the textile sector but also to other vulnerable industrial sectors such as steel, chemicals and machines. I would also like to suggest that the European Commission presents on a regular basis impact studies, statistical data or other elements and relevant instruments for these sectors. I would like to congratulate you once again on the measures you have proposed for access, free trade, funds and the environment.
Gianluca Susta
Madam President, ladies and gentlemen, there is no doubt that we are facing an extremely serious industrial crisis, and the European textile industry cannot escape this crisis, which is also a product of the financial crisis.
It is clear that delayed consumer spending is affecting European high-end products, including those from my country, Italy, in a sector that has seen, as the Chairman of the Committee on International Trade pointed out, the loss of 350 000 jobs and 5% of businesses.
At this point, however, I believe that more than financial support, this sector, like other industrial sectors, requires rules, and requires, as has already been pointed out, genuine reciprocity. While we can understand that, with regard to emerging countries, there are leanings towards really opening up the market to promote the development of those countries and thus new markets, much less understandable is a lack of reciprocity in terms of legislative barriers and tariff barriers with regard to the most developed countries: the United States, Canada, Australia and Japan.
It is for that reason that certain fundamental issues - on which commitment has, I believe, existed more on paper than in practice - such as the issue of origin marking, must once again become the main focus of attention within the Commission and the Council. Europe needs new rules, but it also needs reciprocity and increased efforts to fight counterfeiting and piracy, to take real action on anti-dumping measures and, specifically, to approve the regulation on origin marking.
You see, Commissioner, if we take part in a boxing match with one hand tied behind our back, we cannot win. I would also like to reiterate that it is a problem that concerns the United States together with us, and does not just concern China or India. They have rules on traceability, which they impose on our products as well, but which we do not have. This, then, is a fundamental issue, with regard to which I believe the Commission's initiative needs to be stepped up much more than in the past, because we have seen that when it wants to, it can manage even to convince those who would argue, as was the case on the issue of the environment.
To conclude, I feel that there are some measures that are costly and others that are less costly, but the costly ones are part of a package to tackle the crisis, which is about to be launched. They include the Globalisation Adjustment Fund, more credit made available to promote investments and strengthen the capitalisation of small and medium-sized enterprises, more funds for research for the textile technology platform, and more support for exports by small and medium-sized enterprises. The less costly measures are specifically the regulation on origin marking, the protection of intellectual property, anti-dumping and the fight against counterfeiting. If we can put forward all these costly and non-costly measures, I believe that we will help Europe's economy without changing the rules on competition and without falling into neoprotectionism.
Pedro Guerreiro
In the wake of other initiatives, we proposed to the Committee on International Trade of the European Parliament that an oral question should be raised with a debate in plenary on production and employment in the textile and clothing sector in different Member States of the European Union, because we consider this urgent and indispensable.
We also proposed that this debate should include the participation of the Council and be concluded with a resolution by this Parliament; however, these proposals did not have the support of other parliamentary groups.
More than a year has passed since the debate held in this Parliament on 12 December 2007. We raised the alarm at the time that, if measures were not taken in defence of production and employment in the textile and clothing sector, we would continue to be faced with the slow agony and destruction of a large part of this strategic sector. Since then, and as had happened previously, thousands of jobs have been lost and innumerable companies closed, with 350 000 jobs and 5% of companies having vanished in the last two years alone.
Is that what the European Commission claims to be competing through restructuring, we would ask. Since then, and as was the case previously, workers have continued to be faced with unemployment - all too often without payment of the compensation or back pay due to them - with intensified exploitation, with more insecurity, with late payment of wages and with deregulated working hours.
Certain causes and people are responsible for this situation, such as those who promote the liberalisation of the textile and clothing trade and the relocation of production with a view to maximum profits, thus pitting a large part of the sector against competition based on double standards defined from the start.
Faced with this situation, the European Union has either turned a deaf ear or taken mitigated measures which far from provide an answer to the problems and needs of the sector. The European Commission does not consider the textile and clothing industry to be special, as it claims to, unlike other sectors. Together with urgent measures which need to be implemented by each Member State, the European Union also has a duty to provide a response to the grave problems with which the sector is contending.
Commissioner, when will binding rules on attaching labels of origin be applied, with the adoption, for example, of the 'made in' regulation? When will the same consumer safety and protection requirements be applied to imported products as are demanded for products made in the European Union? How will the European Union continue to monitor in real time import trends and customs inspection and control, keeping the sector fully informed and invoking safeguard clauses wherever necessary? How will it use the 2007-2013 financial framework, including the so-called Globalisation Adjustment Fund, to uphold production and employment in the textile and clothing sector, in particular in the small and medium-sized enterprises affected by liberalisation? When will there be a monetary and foreign exchange policy that does not penalise the exports of certain Member States? When will the Community programme, proposed by this Parliament, be created, and the financial resources to modernise and promote the sector and the diversification of industrial activity be unblocked, particularly those directed at the least favoured regions which are dependent on it?
Tokia Saïfi
- (FR) Madam President, the European textile and clothing sector is a sector that has been hard hit over the last few years by the damaging effects of globalisation.
Today, in spite of some still painful wounds in certain European regions, this sector has been able to change direction, not least through the development of technical and innovative textiles.
However, let us not undermine this industry's capacity for recovery by being lax and negligent. Indeed the European Union must maintain the political will to create a consistent competitive framework for its businesses, by remaining vigilant and by taking practical and effective action when this proves necessary.
For the Union to do this, Commissioner, you must continue to monitor the customs statistics of imports arriving from China and you must keep this sector informed of the most recent developments. We must keep a close eye on matters and we must be responsive. The European Union has the means to do this: the trade protection instruments are a perfect example of such means. Therefore, I will continue to hammer home the point that a Europe that protects is not a protectionist Europe.
However, my concern today, Commissioner, is based on the unprecedented increase in seizures of counterfeit textile and leather articles, articles that are impregnated with azo dyes or nickel, which put the security and the health of European consumers increasingly at risk. This is a phenomenon that, as you can well imagine, is not about to go away with the economic crisis that we are going through.
That is why I call on you to work with the Member States to implement as quickly as possible the four-year action plan on combating counterfeiting and piracy, with the creation of a European counterfeiting observatory and the strengthening of the European customs system.
Making it mandatory to indicate the origin of goods sourced from third countries, harmonising the customs control procedures, and punishing violations of intellectual property rights by criminal prosecution are the battles that we have to fight on behalf of our businesses, our jobs and the citizens of Europe.
Francisco Assis
(PT) Madam President, Commissioner, this case is a very concrete one in which the distinction we made a short time ago, in the previous debate, between protection and protectionism, applies very well.
We must say 'No' to protectionism which impoverishes, but protection to safeguard fundamental rights of Europeans is absolutely necessary. This is a very important sector in various European regions and countries, as is the case of the region that I come from, the region of Northern Portugal. It is of crucial importance to the regional economy. It is a sector that has been particularly exposed to the globalisation process. In a serious financial crisis like the one we are undergoing, this sector is experiencing absolutely tragic times.
The European Union and the Member States should pay more attention to the textile industry, opting for defensive measures and offensive measures. The defensive measures entail the use of all the mechanisms and instruments of commercial defence that are at our disposal. It also involves maintaining a political dialogue with our main partners to combat situations of real monetary protectionism and situations that threaten the legitimate interests of European producers. To defend European producers, employers and workers is to defend European citizens and also to defend European consumers. That is what we must be aware of, once and for all.
At the same time we have to use these defensive measures in compliance with principles as simple as those that have already been set out here: the principle of reciprocity and the principle of the permanent fight against unfair competition. We are not asking for any special treatment for the European Union or for the most affected regions of the European Union. We are simply demanding that there be rules and that those rules be based on fundamental principles of reciprocity. However, while the European Union and its Member States must not hesitate to fight for the instruments of commercial defence which prove most appropriate at any time to be applied, we must also develop offensive policies and measures. This, in fact, has already been happening, in terms of modernising the sector and also in the areas of human resources development, investment in vocational training, technological modernisation and development of the regions.
There are regions, and I know one of them well, which, as I have just said, is the region of Northern Portugal, that are faced with truly tragic situations and it is necessary to confront them head-on.
DanutBudreikait
(LT) This year up to 50% of the jobs in Lithuania's textile and clothing sector may be lost. Almost 20 000 workers may become unemployed. This would not simply be a consequence of the economic and financial crisis. The textile industry has to withstand unequal competition conditions and apply higher manufacturing, work, hygiene and ecological standards. It is very difficult to compete with China's subsidised production due to the imbalanced exchange rate, bank lending policies, absence of depreciation deductions and tax policy. Moreover, China and other countries are constantly increasing market access barriers affecting EU products. What does the Commission think of a situation in which the price of a Chinese product is less than the raw materials used to manufacture it? What actions does the Commission plan to take to restore equal competition conditions, the so-called level playing field? Moreover, I would like to ask for concrete facts to be produced showing how the Helpdesk department, established by the Commission to aid small and medium-sized businesses, is helping the textile industry to initiate investigations into the application of market protection measures in obvious cases of unfair competition? For your information, linen textile manufacturers have now been trying for two years to initiate an anti-dumping case against linen fabrics of Chinese origin, but so far have been unable to do so because the Commission does not provide any assistance. What does the Commission suggest textile manufacturers do?
Ivo Belet
(NL) Commissioner, you said a moment ago that, in overall terms, the situation with textile imports from China in 2008 turned out better than expected. I feel duty bound to vigorously contradict your statement, as the figures paint a completely different picture.
In fact, last year textile imports from China went through the roof. There is no doubt that if we look at T-shirts, trousers, dresses and pullovers, in other words the vulnerable product categories, there has been a near doubling of imports in the space of just one year, and that is clearly a cause for great concern. It means that the surveillance system we have had in place all this time is not working. As we all know, the double-checking system is no longer in operation. This situation, Lady Ashton, is untenable because there are no real sanctions we can apply; we have no clout.
As the previous speaker said, the figures also show that there is something fundamentally wrong with the prices of these massive imports of Chinese textiles. Prices have dropped by nearly a third and this drop cannot be attributed to exchange rate differences alone. Moreover, Commissioner, the production costs in China have risen sharply again over the past year, which suggests that these prices are practically dumping prices. We are counting on you not to let this simply pass unchallenged. As stated by Mrs Wortmann-Kool earlier, 350 000 jobs have been lost over the past two years. To a large extent, this is the result of unfair competition and we need to formulate a response to this situation.
That is not the only matter of concern, Commissioner. As you know, credit insurance is much harder to obtain in the current climate, and this is having a direct, pernicious effect on exports. The French Government has already developed a system of additional credit insurance for the clothing and textile sector. It would be worth considering whether we could recommend this system and streamline it further at European level. I am not suggesting harmonisation, but that we attempt to put initiatives in place at European level to promote the French system to some degree. Can you give us a commitment that, using the powers at your disposal, you will implement initiatives in this respect? These initiatives do not have to cost anything. It is simply a matter of political will and coordination.
Martí Grau i Segú
(ES) Madam President, Commissioner, as we have recently witnessed, the textile sector is suffering a major crisis that has led to many closures, relocations and redundancies, particularly in regions that specialise in this industry.
In view of the current economic crisis, the European Commission should act as quickly as possible in conjunction with the Member States to alleviate the socioeconomic effects of this restructuring. These changes have been particularly dramatic for the regions and families affected.
I think that workers in the textile and clothing sector should be given assistance and that social measures should be drawn up in the form of plans to help companies that are undergoing restructuring and currently find themselves in very difficult circumstances. It would be desirable to direct a substantial part of the European Globalisation Adjustment Fund to restructuring and retraining in the textile sector, in particular for the small and medium-sized enterprises that make up the majority of the sector in the European Union. The SMEs have suffered significantly from the effects of the liberalisation of the market.
Furthermore, the import control system should be re-established, in particular with reference to Chinese imports, due to their volume. This is not at all a matter of promoting trade barriers. It is more a matter of compensating for the negative effects of this significant change. We should not forget that the European Union is the second-largest exporter in the world of textile products and clothing, which makes it necessary to guarantee optimum access to the markets of third countries. This is essential to the future of the textile and clothing industry in the European Union and in particular for SMEs.
All of this, of course, must be carried out while guaranteeing fair competition on the basis of the promotion of social and environmental standards in these countries. In this regard, the provision of accurate information for consumers, for example the regulation imposing 'made in' labelling, which we know has not been implemented, would be of great use given that it would mean that imported products would be subject to the same consumer safety and protection requirements as those manufactured within the European Union.
Elisa Ferreira
(PT) Madam President, Commissioner, I am going to try to put the questions very succinctly. My first point is the question of the European Union's special monitoring mechanism for textiles, which ended, as mentioned, on 31 December 2008. What is lacking, Commissioner, is the punctual and routine publication of statistical data on imports, exports and prices, as happens in the United States. Without these data, the European Union is prevented from reacting to any unfair practices and the Commission itself is incapable of defining its strategy. I would ask you to attend to this, as other Members have already done.
Secondly, producing within the European Union increasingly entails complying with safety regulations, social regulations and environmental standards. REACH, for example, is a recent initiative that creates even more requirements for us.
It is important that the Commission has a clear strategy that can be seen and monitored for imported products to be subject to the same requirements. In what way, in the current free trade agreements, are these aspects being duly safeguarded? As for 'made in' labelling, can it really help to solve this problem?
Thirdly, the European Union has launched an economic recovery plan to combat the current crisis. What role will commercial policy play in this context? What is the Commission preparing to do at this time, when a series of other countries, such as China, are starting to launch an increasing number of non-tariff barriers so that our European imports cannot access Chinese markets? What proposal does it have with regard to updating or adapting the Globalisation Adjustment Fund, as well as the aid available within the framework of the Structural Funds to improve the immediate situation of the European textile industry?
Lastly, could it be that the crisis we are going through will finally make the Commission aware of the devastating impact of an over-valued euro on the European economy? How can the Commissioner raise awareness - I am about to finish - among her fellow Commissioners and the entities which deal with European monetary policy in terms of rebalancing ...
(The President cut off the speaker)
Paul Rübig
(DE) Madam President, Commissioner, ladies and gentlemen, what would you do, Commissioner, to speed up the opening of the Chinese and Indian markets? The main thing, of course, is that we should be able to export our products to those countries. Very many European companies have invested in China, building or acquiring factories there. That is why a more open market is really the top priority. What scope is there for you - in cooperation with Commissioner Kovács, where appropriate - to provide the textile industry with tax incentives, such as shorter depreciation periods, with a view to enhancing companies' creditworthiness? That would naturally help to safeguard jobs as well. When the Basel II Accord is implemented in the future, there will therefore be a need to have structures in place that serve to make firms more creditworthy.
Zbigniew Zaleski
(PL) Commissioner, I do of course want to express strong support for the views of our fellow Members who say that our small enterprises should be protected from the marketing of low-quality goods and counterfeit and pirated goods. I remember that the representatives of the Association of Producers of Tuscany asked us during their visit for recognition of the fact that they do not need protection, but clear confirmation that the 'Made in Italy' mark will be visible only on their Italian products.
Now I want to add something and inform the Commissioner that in fact she has the rather difficult task of resolving a certain dilemma. On one hand consumers of course want to buy cheaper products, in other words at a low price, irrespective of whether the goods come from China or from some other country, and on the other hand they must know that the cost of this may be that their own fellow citizens lose their jobs. Perhaps a campaign informing people of this will help you, as someone who supports finding a resolution to this dilemma, by asking questions and making proposals which will meet with the support of society. For this is about the consumer, and not only about the Commission.
Miloslav Ransdorf
(CS) Thank you, Madam President, I have just one brief remark on the whole complex subject of the textile industry and the impact of globalisation on it. I believe that it is probably wrong just to apply protective measures. The most important aspect is to raise the level of technology and the quality of production in Europe and to move the European textile industry forward by switching its structure into the field of speciality products and towards a level of quality which cannot be achieved by the Asian competition. This is a feasible option and some companies in Europe are already going down this route and creating new market segments, where they feel comfortable on the whole. I believe that such efforts should be Europe-wide in nature and require a well-considered concept.
President
- Commissioner, may I say first of all that I am pleased to see you here again in this Chamber.
Catherine Ashton
Member of the Commission. - Madam President, let me respond to a few of the points that have been made. A number of honourable Members - Mr Papastamkos, Mr Susta, Ms Ferreira, Mr Grau i Segú and Mr Zaleski - talked about the 'made in' proposition. I think the proposal the Commission has put forward is sound and should be adopted and that it is in the interests of business. However, as honourable Members know, I do not yet have a majority in the Council, and any support that honourable Members can give in getting that majority would be most welcome.
A number of Members - Mr Susta, Ms Saïfi, Mr Assis in particular - and Ms Budreikaittalked about the Trade Defence Instruments and the importance of making sure that we operate the mechanisms we have effectively. I committed in my hearing to ensure that I would do that, and I am continuing to do so.
Concerning intellectual property, it is important that we have an action plan, and I intend to deal with that. I also want to address the particular point about the helpdesk and small businesses. It is specifically designed to help small businesses address issues of defence. I am very grateful. If honourable Members would like more information or are concerned about that, they are very welcome to contact me.
'Protect not protectionism' is a very big theme of the discussions. I would just like to say - perhaps particularly to Ms Plumb and Mr Ransdorf - that these are important differences. It is very important to fight protectionism; it is important to make sure we are supporting our industries to be able to compete and trade in the future.
A number of interesting ideas were raised, such as impact assessments for industry, and I will feed those to my colleague Günter Verheugen. He well understands the importance of collecting data and statistics, but I will make sure that he hears of the concerns you have raised. We must look at all the initiatives on the table and how we deal with access to markets, as has been said. I would say to Mr Guerreiro that I accept absolutely the strategic importance of textiles and clothing and its value to the discussion we have had about accelerating markets.
My final comment is addressed to Mr Rübig: I cannot tell you in one second about how we need to accelerate the opening of markets in India and China, but I am more than happy to discuss that at your convenience.
President
- The debate is closed.
Written statements (Rule 142)
Czesław Adam Siekierski  
The import of cheap textiles from China to Europe is a problem which has grown recently as a result of the gradual liberalisation in world trade. The Chinese textile industry, which has a cheap labour force of many millions at its disposal, has an obvious advantage over European producers, which specialise mainly in branded products. In relation to the progressive displacement of domestic production by more competitively priced imports from China, we can see negative social effects, which especially concern those regions that have for centuries specialised in the manufacture of clothes. As we are currently struggling with one of the most serious economic crises in history, the threat of impoverishment of large areas of the Community is even greater.
The uncontrolled influx of cheap clothing from Asia also means the problem of counterfeit branded products, which further weakens the position of European producers and exposes consumers to serious risks associated with the low quality of imported products.
There can be no doubt that, as a result of the expiry of the agreement on bilateral monitoring at the end of 2008, immediate action is necessary to extend this system. It is also advisable to establish a high-level group within the EU, whose function would be to monitor the influx of Chinese textiles and inspect their quality. Bearing in mind that in the face of economic recession the protection of jobs should receive special attention from the governments of the Member States and the Commission, I appeal for the matter of the protection of the European textile market to be given priority status.
