While there are lots of cheers when a new government is elected, there is also a huge workload to formulate policies considering the erstwhile issues within and outside the country and also deal with issues that the country might face in the future. The elections have concluded in the European Union, and the majority party has the onus of carefully formulating policies for all sectors. The textile sector and clothing sector account for 3 percent of total manufacturing value added in Europe. It is one of the most significant sectors, but the problems that the EU's textile sector is facing are also enormous.

The pertinent point here is that the textile and garment industry has grown into a huge sector, and everything from fibers, yarns, types of textiles to fabric, dyes, etc., has become a sub-sector within this vast industry. Thus, there is an increased dependability of countries on each other. The European Union has faced certain differences with China, India, and Russia regarding textile products.

The majority party in the EU, the European People's Party (EPP), has mentioned in its manifesto that it will ensure that it creates conditions that are favorable for small and medium-sized businesses, including newcomers in business, family firms, and entrepreneurs. The party also has assured to provide funds for research and development, private investment, and make funds more easily available to the firms. The consumer trend so far has shown an inclination towards high-end textile products. In such a case, it will take a lot of planning and the right policies to promote small and medium-sized businesses. Also, the main concern with the EU textile industry is that most European countries find textile manufacturing expensive, so these countries prefer to import textiles from other countries. Approximately 95 percent of the EU's textile requirements are met through imports. Thus, it would be increasingly difficult for the EU's textile industries to compete with the low cost of production that Asian countries like Pakistan, Bangladesh, and India offer.

Another challenge for the majority party will be to resolve the recent issues that it has been having with India and Russia regarding textile import duties. Russia has earlier this year cited its differences with the EU on quotas on imports. Moscow has warned the EU to initiate quotas on textiles coming from the EU if the EU does not raise its own annual quota on imports of Russian textiles. Russia had mentioned that the annual EU quota of $150 million is insufficient. Though an interim EU-Russian trade agreement was made and was signed by the EU and Russia, the EPP will have to find a long-term solution to this problem.

India has also demanded the EU to waive import duty on its textiles, as the same rule applies to countries like Pakistan and Bangladesh. India has claimed that the quality of textile provided by India is far better and superior to the textile products provided by other Asian countries that are reaping the benefits under Generalised System of Preferences (GSP). At present, Indian textile makers have to pay 10 percent import duty to EU and approximately 30 percent of India's textile is exported to the EU, with Germany and the United Kingdom accounting for the largest share. The issue has been brought before Germany and United Kingdom. India was removed from the list of Generalised System of Preferences (GSP) in December 2013. EU largely depends on India and China for generating quality textile for the European countries and unfortunately, China and EU also had some friction with regard to EU's textile policies. In view of EU's dependability on these countries for textile, it becomes inevitable to resolve the past issues once and for all.


The EPP has also stressed in its manifesto that it will focus on environment by efficient use of energy and investing in renewable energy. The impact of this will also be seen on textile, as the EU will encourage textile imports that are organic, this would mean increased responsibility on part of developing countries like India, China, Pakistan et al that export textiles to EU.


The internal issues in textile sector are also many. EPP will also have to ensure integrated development of all the members of the Union. The assurance given by EPP to remain committed to supporting fragile democracies in Eastern Europe will have to be translated into action. In April this year, European Commission has raised proposal of extending help to Spain's textile workers and a fund of 840,000 Euros has been proposed. Though this move augurs well for Spain's textile workers, but, the current economic crunch might create discord among the EU states with regard to help at regular intervals to fragile EU democracies. EPP will have to ensure that it convinces all the states in the EU about its policies and its stand on textile import policies; this will be a Herculean task for the newly elected party.

The textile industries of European Union need to be sustainable, flexible and competitive. The textile's sub-sector involving technical textile that requires huge investment has to be closely monitored. Also, finding options for supply of textile raw materials at global level is also a requirement, as trade relations of EU with some of the countries have been in question.


It is still difficult to predict long term trends in textile policies of EU, as politics and productivity will keep influencing the policies as always. Earlier temporary solutions to some grave textile sector problems have been extended by the ruling parties, but now it will be a testing time for the newly elected party to ensure that permanent solutions to the problems are provided.


References:


1.      Articles.economictimes.indiatimes.com

2.      Ec.europa.eu

3.      Textilesupdate.com

4.      Dublin2014.epp.eu

5.      Epp-cd.eu