T&C industry jobs might be at risk due to concessions to Pakistan

07 Oct '10

4 min read

The European textile and apparel industry is deeply concerned over the Trade Concessions the EU is planning to give to Pakistan. In a letter endorsed by the Board of Euratex and addressed to the President of the European Council Van Rompuy, the Commission President Barroso, the Belgian Presidency Y. Leterme, the Industry considers unacceptable that the EU is prepared to sacrifice its T&C Industry to the unreasonable demands of one of the most powerful and dominant players in the world market.

Although sympathetic with the difficult situation endured by the people of Pakistan, Euratex is convinced that the envisaged trade concessions will have no impact whatsoever in improving their life conditions.

In this sense EURATEX President (Dr.) Peter Pfneisl recalled in his letter that: “Everyone is well aware that the T&C Industry of Pakistan is located outside the flooded areas. Moreover Pakistan T&C Industry is composed of very competitive, well equipped and efficient companies. Most of these companies are performing remarkably well today with average turnovers between 100-200 million € well above the EU T&C average size. So in fact the benefits of the EU concessions will go to them and not to the populations in need”

He added “We are not prepared to be continuously the sector to let go whenever something has to be given for political reasons to a Third Country. There is no economic or political rationale that can justify the systematic undermine of a sector's interests and sensitivities. Even more when, as it looks the case regarding Pakistan, we are only at the beginning of the concessions since apart from the request for a Waiver at WTO level there is also the intention to change the GSP+ criteria in the new regime with the sole purpose of benefiting this country”

In fact the Commission is finalizing its WTO Waiver Proposal with a list of 81 products that would benefit from duty free access to the EU market, out of which more than 60 are Textile and Clothing!. These concessions will affect the entirety of the supply chain still present in Europe as they range from yarns and fabrics up to garments and home textiles. The negative impact will be felt immediately across the EU 27 member states but also in other countries benefiting from preferential relations with the EU, in particular Turkey.

Moreover, the Waiver, allegedly a temporary measure, would be in place for 3 years. Euratex is strongly opposing any measures that last longer than 1 year. This larger period only supports our idea that the Commission has already taken the autonomous decision to give GSP+ status to Pakistan by changing the vulnerability criteria when the new Regime will enter into force in 2014. In practice this decision will only broaden the gap in GSP utilization between the more vulnerable and the more competitive countries in favour of the latter.

This decision will be taken on the back of a sector that has already paida high price in the economic crisis with the lost of around 270.000 jobs in 2009! The business recovery is still bleak and this decision is going to put additional strain on our companies that will likely precipitate job losses and company closures. Independent forecasts indicate that up to 120.000 jobs might be at risk in the coming 3 years!

We thus urge the EU Authorities to take into full consideration the interests and sensitivities of our Industry which, only in the EU, employs directly over 2.000.000 people and more than 3,5 millions workers if we take into consideration Turkey who is member of the Customs Union and thus obliged to accept unilaterally these measures.

EURATEX

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