1. Page 1 TTEA/ITKIB The Future of the Textile and Clothing Industry in an Enlarged Europe Presented by TURKISH TEXTILE EMPLOYERS ASSOCIATION & ISTANBUL TEXTILE AND CLOTHING EXPORTERS ASSOCIATION Brussels, March 2003

2. Page 2 TTEA/ITKIB The Future of Textile & Clothing Industry in an Enlarged Europe 1 1 EU position in the World market 2 2 Trade agreements 3 3 Pan Euro Med strategy 4 4 The Future

3. Page 3 TTEA/ITKIB Unilateral Free Market Acces strategy of EU has lead to a geographical change of clothing sources in EU... EU position in the world market 1 1 EU retailer’s view of sourcing 1995 - 2002 (Origin of the Clothing) Time Line 75 % EU 25 % Non EU 40 % EU 60 % Non EU 25 % EU 75 % Non EU 199520002002 Garmented in EU Garmented outside EU

4. Page 4 TTEA/ITKIB EU Textile & Clothing Industry has lost market share in the world market mainly on EU‘ s unilateral free market access strategy and against unfair competition !… EU position in the world market 2 2 1990 2000 WORLD TEXTILES MARKET 104,5 BILLION USD 157,5 BILLION USD

5. Page 5 TTEA/ITKIB EU Textile & Clothing Industry has lost market share in the world market mainly on EU‘ s unilateral free market access strategy and against unfair competition !… EU position in the world market 3 3 19902000 WORLD CLOTHING MARKET 108 BILLION USD 199 BILLION USD

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8. Page 8 TTEA/ITKIB EU position in the world market Unilateral free Market Access of EU has made EU an import heaven for textile and clothing products at the expense of Pan Euro manufacturing industry ….. 6 6

9. Page 9 TTEA/ITKIB EU position in the world market Fareast countries have benefited most from the open market strategy of EU, whereas EU has maintained its very low export market share in Fareast due to their closed markets….. 7 7

10. Page 10 TTEA/ITKIB China is the leading country who has benefited most from the open market strategy of EU, China is the No 1 supplier in EU even with the existing quota restrictions, whereas EU has almost nill market share in China due to its closed market..... EU position in the world market 8 8

11. Page 11 TTEA/ITKIB 9 9 The existing very soft Custom Declarations and Rules of Origin of EU for Textile & Clothing sector permit also the Counterfeiters to maximize transshipments, false declarations, in order to obtain tax frauds and tax evasions of Billions of Euro every year!…. Millions of meters of Textile transshipments of Fareast goods with EUR certificates to Turkey are a very good example, how the counterfeiters are easily operating within EU …... EU position in the world market

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13. Page 13 TTEA/ITKIB The Future of Textile & Clothing Industry in an Enlarged Europe 1 1 EU position in the World market 2 2 Trade agreements 3 3 Pan Euro Med strategy 4 4 The Future

14. Page 14 TTEA/ITKIB Location of the clothing industry before 2005 The world clothing industry is mainly concentrated among few countries and trading blocs (which represent today more than 85% of the USA, EU and Japan clothing imports) Trade Agreements 1 1 Dominican Republic El Salvador Guatemala Honduras Mexico...... Morocco Tunisia Ukraine Hungary Poland Romania Bulgaria Chekoslovakia Turkey China Hong Kong India Indonesia Macau Malaysia Pakistan Philippines South Korea Taiwan Thailand Vietnam... PanEuro Med Nafta/CBI Brazil Sub Saharan Fareast

15. Page 15 TTEA/ITKIB Location of the clothing industry from 2005, if EU’s current strategy is unchanged If EU continues its unilateral free market access strategy to third countries at the expense of Pan EuroMed countries, than we can expect the total elimination of textile and clothing sector within PanEuroMed, from 2005, when quotas are lifted !…. Trade Agreements 2 2 Dominican Republic El Salvador Guatemala Honduras Mexico Colombia, Chile ? China Hong Kong India Indonesia Macau Malaysia Pakistan Philippines South Korea Taiwan Thailand Vietnam... PanEuro Med Nafta/CBI Brazil Sub Saharan Fareast

16. Page 16 TTEA/ITKIB Trade Agreements I - NAFTA promotes and developes textile and clothing sector among its members by; Strict NAFTA ‘Yarn Forward’ rules of origin, High Custom Tariffs, Strict Custom Declarations ( Manufacturing, Origin,etc). II - Fareast countries ( India,Pakistan, China, Indonesia…) have closed markets by implementing ; High Custom Tariffs, Non Tariff Barriers and, Not meeting ATC obligations. 3 3 III - EU, however, have not provided yet any preferential tools for its members in the Textile & Clothing sector in the Enlarged Europe, from 2005 onwards, against the unfair competition of Fareast, when the T/C quotas are all lifted….. AND THIRD COUNTRIES STILL WANT MORE FREE CONCESSIONS FM EU AT WTO!…..

17. Page 17 TTEA/ITKIB Trade agreements 3 3 Other trading pacts ( e.g. NAFTA) are more dedicated to increase and protect the interests of their Textile&Clothing sectors among its members against the unfair trade…. Source: Gherzi 44 13 5 38 55 20 15 10 56 21 17 6 58 21 17 4 Figures in % Rest of the World (incl. AGOA) CBI Mexico US production 2010 2005 2000 1995 Sources of apparel for US market - assuming China in WTO and effects of CBI Parity and Sub-Sahara Africa

18. Page 18 TTEA/ITKIB The Future of Textile & Clothing Industry in an Enlarged Europe 1 1 EU position in the World market 2 2 Trade agreements 3 3 Pan Euro Med strategy 4 4 The Future

19. Page 19 TTEA/ITKIB Pan Euro Med strategy 1 1

20. Page 20 TTEA/ITKIB Pan Euro Med strategy 2 2 The Unemployment matter within Pan Euro stands as the key issue that, EU has to resolve and promote the manufacturing industries before 2005...

21. Page 21 TTEA/ITKIB The Future of Textile & Clothing Industry in an Enlarged Europe 1 1 EU position in the World market 2 2 Trade agreements 3 3 Pan Euro Med strategy 4 4 The Future

22. Page 22 TTEA/ITKIB FACTS....  Unilateral Tariff Reductions for T/C products and Free Trade Agreements of EU have eliminated the EU Custom Union benefits to Pan Euro Med countries against the Third Countries, which caused the losses of millions of jobs and plant closures,  Third Countries have not fullfilled their commitments under the ATC, and the custom tariffs of the Third Countries, including USA, are still very high compared to EU and, most of them have also Non Tariff Barriers against the EU products,  Fareast countries still do not respect the essential and ethical social,labor and, enviromental regulations, which makes the PanEuroMed manufacturers uncompetetive  The very soft EU custom declarations and origin regulations, and custom controls permit and quantify transshipments, frauds and false declarations for the counterfeiters, to benefit from the easy unfair trading of non EU origin products with false EUR certificates,  This unilateral Free Market Strategy of EU have caused serious damage to labor intensive sectors in Pan Euro Med Zone and depromote new investments and jobs,  Be prepared for the worse; ‘’ Clothing Massacre of China’’ in 2005 !……. 1 1

23. Page 23 TTEA/ITKIB EU should stop its unilateral open market strategy and assymetrical custom tariff strategy, 2 2 The Actions Required for the Future of T/C Industry in an Enlarged Europe... EU’s priority should be the enhancement of trade, promotion of new investments and,creation of new jobs within Pan Euro Med Zone, but not with Third Countries, EU should adopt Sectoral Approach in WTO negotiations, and request reciprocity in custom tariffs, NO CONCESSION except the EURATEX proposal of Swiss Compression Formula should be proposed at WTO; simply no further Tariff Reduction by EU should be adopted, before the third countries set their custom tariffs at 15% max and eliminate all Non Tariff Barriers, EU should adopt Sectoral Approach in WTO negotiations, and request reciprocity in tariffs, social, labor, and enviromental standards, EU should strenghten the existing soft regulations for rules of origin and, custom declarations in order to combat and minimize the ever increasing custom frauds and transshipments, EU should not conclude any Free Trade Agreements with phase out concessions for T/C products, and protect the economic and social interests of Pan EuroMed countries against Third Countries, EU should stop giving Free Gifts to Third Countries at the expense of Textile & Clothing industry and new EU candidates, for having market access to other EU services and products,

24. Page 24 TTEA/ITKIB If EU is truely committed to the well being of the Enlarged Europe,than the corrective actions of fair and equitable trade with Third Countries are all available, and easy to implement without further delays. 3 3 The Future….. The Question is; Shall EU continue giving Free Gifts to Third Countries at the expense of Textile&Clothing sector and New EU members of the Enlarged Europe, or EU shall promote and enhance Employment, New Investments, and Manufacturing Industries within Pan Euro Med Zone?…...