From the Sector

The European Textile and Clothing industry (EURATEX) welcomes the proposed reforms to the EU's customs system, emphasizing the need for a modernized framework that addresses the challenges of the digital age and fosters a level playing field.

“Customs play a critical role in safeguarding fair competition within the EU Single Market and ensuring that products meet our environmental and safety standards,” states Dirk Vantyghem, EURATEX Director General. “We recognize the need for a reformed system adapted to the 21st century, particularly considering the growth of e-commerce and the increasing complexity of regulations.”

EURATEX highlights key priorities for a successful reform:

• Phasing Out De Minimis Exemption: EURATEX strongly supports abolishing the €150 import duty exemption for small consignments. This exemption has been exploited by e-commerce companies, creating unfair competition for European manufacturers. EURATEX urges immediate action to eliminate this loophole, rather than waiting until 2028.
• Harmonization and Streamlining: The organization calls for a unified customs regime across the EU, with simplified procedures and reduced administrative burdens for businesses, especially SMEs. This includes avoiding duplication of efforts and ensuring seamless interoperability between different customs information systems.
• Data Security and Transparency: EURATEX emphasizes the importance of robust data security measures within the proposed EU Data Hub. Clear regulations on data access, ownership, and cybersecurity safeguards are essential. Open collaboration between industry and policymakers is crucial in designing the Data Hub for optimal functionality.
• Effective Implementation of Trust & Check Trader (T&CT): The T&CT status offers potential benefits for companies through features like self-assessment. However, EURATEX raises concerns about practical implementation, particularly for SMEs struggling to obtain existing Authorized Economic Operator (AEO) statuses. Providing support for SMEs in obtaining this status is crucial.
• Interoperability and Data Sharing: EURATEX emphasizes the importance of the EU Data Hub's interoperability with various IT systems. Also, a uniform central IT network facilitating national and other legal requirements would be a significant step forward.
• Structured Dialogue with Stakeholders: The establishment of the EU Customs Authority (EUCA) is seen as a positive development for coordinating customs enforcement across the EU. EURATEX recommends a dedicated dialogue between the EUCA and stakeholders, including industry representatives, to improve overall coordination and effectiveness.

Dibella is making life easier for its textile service customers with a new service: on request, hotel textiles can be ordered with Datamars transponders directly ex works. The chips are permanently available at the Dibella warehouse - the goods are delivered fully equipped.

To relieve its customers, Dibella now offers a new RFID-based laundry tracking service: On request, the company equips textiles ex works with LaundryChips (RFID tags), from Datamars (CH). Dibella is cooperating directly with the Swiss company for this unique service. Customers do not have to worry about ordering or providing the tags - saving them time and effort.

Cost advantage
This new system offers a cost advantage because: It is much more cost effective to send large batches of chips bundled together for production than to make hundreds of shipments per year for each individual order. Handling costs are increasing and shipping costs, especially overseas, have risen immensely. In addition, the customs authorities in some countries are very strict when it comes to importing chips, and this new system also minimizes the risk of customs-related delivery delays.

Transponder data as a future service
Another service is already in the pipeline: Dibella will soon offer the option of directly reading out the LaundryChips in its main warehouse and providing them as a CSV file together with the delivery note. This will eliminate the work step of scanning new goods for the textile service - when the goods arrive, the CSV file is simply entered into the system and can then be fed directly into the laundry cycle.

As there are different chip systems from company to company, this solution cannot be implemented directly for all textile service companies - but Dibella wants to develop further.

Benefits of RFID for laundries and their customers
The RFID technology not only improves efficiency, reduces losses and increases profitability in the laundry industrial process. RFID also improves the quality of service that the textile services can offer to their customers, thanks to a more efficient workflow and instant data exchange between textile services and their customers. No more worries or discussions about lost textiles: the customer knows exactly how many and which pieces have arrived/departed from/to the laundry. In this way, transparency with the customer is improved and invoicing can be based on reliable data. In addition, portable RFID readers allow for automated and quick daily inventory at the customer’s site to request clean textiles from the laundry on time.

2024 is a turning point for the European textiles and clothing industry: From 6 to 9 June 2024, European citizens will vote for a new European Parliament and, based on the results, a new European Commission will be formed. In view of this important election, EURATEX publishes a Manifesto, presenting 15 requests which will help to ensure a competitive European textiles and clothing industry.

The textile and apparel industry is making a substantial contribution to European wealth, jobs and growth. Europe counts 192,000 companies employing 1.3 million workers with a turnover of €167 billion and over €67 billion of exports. Entrepreneurship should be recognised as the foundation for a competitive textile industry, offering high quality and sustainable products, based on innovation, creativity and design. European policy makers should recognise such role to textiles and apparel companies and have an open dialogue to create better framework conditions to operate in the internal and global markets.

To realise that vision, the industry and policy makers need to work together on a mix of policy measures and initiatives, which are coherent and offer a transparent and predictable framework for our companies, and make them more resilient and competitive.

These policies should focus around four points:

Develop and implement a “smart” EU industrial policy
Europe should create policies which enhance competitiveness, instead of creating administrative burdens. To EURATEX, each new piece of legislation should undergo a “competitiveness test” to critically look at the impact of the new rules. Europe should also create a favourable environment to promote education and jobs in the industry. The EU textile industry currently employees 1,3 million people, 30% of which is above 50 years old. A critical bottleneck for the textile industry is to attract (young) people and make sure these people have the right set of skills, to operate in a changing textile ecosystem. EURATEX also asks the EU to invest in innovation and digitalisation as they are key to the European competitive advantage. Not only, as the last years have proved, Europe should provide companies with access to sustainable energy at lower prices.

No sustainability without competitiveness
The EU Strategy for Sustainable Textiles is pushing our sector towards new business models with a lower environmental footprint. To realise that ambition, no less than 16 regulatory proposals are on the table, each of them with a different timetable, managed by different departments of the European Commission. EURATEX is committed to sustainability, but asks for economic realism. This set of new regulations needs to be coherent, enforceable, feasible and applicable for SMEs, and not push textile companies out of the market. Moreover, some member states are moving forward faster and some legislations will be decided at national level, creating fragmentation of the market. Such scenarios will hamper Europe and its possibilities to grow.

Ensure free and fair trade
With $224 billion in sold merchandise, Europe is the second major world exporters of textiles and clothes after China ($321 billion). It is therefore important that the global market should be open, free and fair for our industry to continue to thrive. Besides the support to FTAs in general, EURATEX wants to emphasise that all trade agreements should offer effective market access for EU companies and a level playing field in these markets. A free and open market should go hand in hand also with protection against free riders. The EU must always consider enforcement and enforceability when making new laws; it should also take action together with the member states for a better coordination with harmonised criteria for action among Customs Authorities.

Incentivise the Demand for sustainable textiles
Sustainable textile products typically come at a premium price, making it difficult for many consumers and buyers to purchase such products. Many surveys across Europe confirm that around 50% of interviewees do not purchase sustainable fashion products and the main reason is price. EURATEX believes that, to create a demand and help consumers to buy a (genuine) sustainable textile product, there should be standard requirements and fiscal incentives. Public authorities should also implement green public procurements, by increasing the importance of sustainability criteria in their evaluation grids.

The Enforcement Forum of ECHA agreed that the next REACH enforcement project will investigate how companies fulfil the registration, authorisation and restriction obligations for products and chemicals they import from outside the EU. The project will be done in 2023-2025 and will require close cooperation between REACH enforcement and national customs authorities in the Member States.
In its November meeting, the Enforcement Forum, responsible for harmonising the enforcement of EU chemicals legislation, agreed to focus its next project on the control of imports of substances, mixtures and articles.

This subject was triggered by high levels of non-compliance in imported goods detected in previous Forum projects, including a recent pilot project. The pilot found that 23 % of inspected products were non-compliant with requirements set by EU law and further controls are necessary.

Control of imports at the point of entry is the most effective means of checking that non-compliant substances, mixtures and articles do not enter the European market. The project will also work on further developing and strengthening existing cooperation between REACH inspectors and customs. By strengthening the control of imports, the project will also contribute to the goals of the EU’s Chemicals Strategy for Sustainability.

The Forum also agreed to publish its future advice on enforceability of new restriction proposals under REACH.

Opportunities for expanding the future role of the Forum, strengthening the control of imports and other areas were on the agenda in an open session where 41 representatives from stakeholder organisations and four candidate countries joined. Among other topics, the open session also addressed the enforceability of REACH restrictions, for example, in textiles or on the use of lead gunshot in wetlands as well as analytical methods relevant for the control of REACH duties.

The Forum’s Biocidal Products Regulation Subgroup (BPRS) re-elected Helmut de Vos (BE) for a second term as a Vice-Chair.

• Opportunity to rebalance trade relations and promote a global sustainable textile industry

Today’s trade relations between the EU and India in textiles and clothing are characterised by a large and systemic trade deficit for the EU; annual imports from India exceed €6 bln (2021) – making it the 4th supplier – while EU exports to India reached just half a billion – the 20th place in our export markets.

Against this background, the free trade negotiations are an opportunity to rebalance that relationship; European textile and clothing companies can offer high quality and innovative products for the Indian market, but they can also offer solutions to reduce the environmental footprint of the textile industry.

EURATEX, as the voice of textiles and apparel manufacturers in Europe, supports an ambitious EU trade agenda, that puts reciprocity, transparency, fair competition and equal rules at the centre of its action. The FTA is an opportunity to establish a more sustainable and fair trading system, based on rules, global environmental and social standards, which are effectively respected by all.

In this context, EURATEX highlights that the sector needs open and efficient markets, but combined with effective controls where necessary, thus ensuring level playing field for European companies. It is clearly essential that the same level of market access to India – both in terms of tariff and non-tariff barriers – is available to EU producers as vice versa.

India today benefits from reduced customs duties due to GSP. For European companies instead, market access to India is challenging, facing non-tariff barriers (related to proof of origin, quality control procedures, etc.) as well as national or state-level support programmes which distort the level playing field between EU and Indian companies.

That level playing field should also apply to our sustainability targets. As the EU will roll out its EU Textile Strategy, setting ambitious standards and restrictions (e.g. on chemicals), we must ensure the FTA is fully aligned with that strategy.

Director General Dirk Vantyghem commented: “We look to these negotiations with great interest. The FTA is an opportunity to develop a shared ambition between the European and Indian industry to make sustainable textiles the norm, and to create a regulatory framework where our companies can compete in a free and fair environment.”

Today, March 30, the European Commission released its long-awaited Strategy for Sustainable Textile, with the ambition to move the sector towards the path of sustainability. EURATEX welcomes the EU ambitions to act on sustainable textiles and investments, in order to change how textiles are made, chosen and recovered, but calls for a smart and realistic implementation. Many European companies have already chosen this path, therefore the strategy should support them in this process, especially considering today’s energy crisis.

The strategy recognises the strategic importance of textiles, which are not only used as apparel or furniture, but applied in cars, medical equipment, agriculture, etc. It acknowledges the European Industry pro-active initiatives to tackle microplastics, to solve challenges of market surveillance and the skills needs. More cooperation is needed for re-use and recycling of textiles and to set up an EU market for secondary raw materials. On this last point, EURATEX ReHubs initiative is developing proposals to size EPR potential, to transform waste into value, and create a new capacity and jobs.

The proposed “transition pathways”, which will translate the strategy into action, will be critical in this respect: how will these sustainability targets be reached, what will the cost for SMEs be, how can companies be supported in that green transition, what about the impact on global competitiveness? These are essential questions to be addressed in the coming months.
The Textile strategy is part of much broader package, including as many as 16 new legislative actions and other policies which will directly impact on textile value chain. In particular the Sustainable Product Initiative Regulation released on March, 30 includes game-changing provisions on Digital Product Passport, Eco-Design, SMEs and Green Public Procurement.  The Regulation has an overwhelming ambition and, to be realistic, it would require a new way of joint working between institutions and business, and which builds on lessons learned on data flow across value chains, interoperability, conformity assessment and effective measures to support SMEs.

If wrongly implemented, such an unprecedented wave may cause a complete collapse of the European textile value chain under the burden of restrictions, requirements, costs and unlevel playing field. On the contrary, the changes ahead can boom the entire textile ecosystem and create a model of successful green and digital transition in manufacturing, which starts in Europe and expands globally.

Already in 2019, EURATEX asked policy makers to work together and remove barriers to circular economy, solve the market surveillance paradox in which laws are made but not checked, and to help create scale economies to make sustainable textiles affordable, hence the norm.

For example, there are 28 billion products circulating per year in EU, which is an impressive task for market surveillance authorities including customs. EURATEX has been stressing non-sufficient market surveillance and it is actively working on solutions for a fair and effective market surveillance of textile products through Reach4Textiles. EURATEX very much welcomes that the European Commission recognizes our work and the need for market surveillance by establishing more harmonised efforts in the EU.

EURATEX also welcomes the establishment of the Digital Product Passport. It has a high potential to improve every step in the textile value chain, from design and manufacturing to recycling and purchasing. At the same time, EURATEX calls the co-legislators to take into account the role of SME’s in this transition and to put forward pragmatic initiatives, supporting SME’s across the EU in a systematic approach.

Alberto Paccanelli, EURATEX President, concludes: EURATEX calls for true cooperation with all policy makers and other stakeholders across the value chains to advise, pressure-test and use this opportunity for a successful transition. Our ambition must be to reconcile sustainability, resilience and competitiveness; we know it can be done”.

A broad coalition of industry and labor groups has sent a letter to House and Senate leadership urging support for the Import Security and Fairness Act (included in the broader House America COMPETES Act), which aims to stop China from exploiting the de minimis threshold that allows imports valued under $800 to come into the United States without paying duties and taxes, bypassing U.S. Customs inspections and providing a backdoor to Chinese goods produced with forced labor.

The coalition sent the letter to Senate Majority Leader Charles Schumer (D-NY), Senate Minority Leader Mitch McConnell (R-KY), Speaker of the House Nancy Pelosi (D-CA) and House Minority Leader Kevin McCarthy (R-CA), urging the leaders to strongly support and prioritize the provision in the underlying China bill.

The letter was signed by the following organizations:

• AFL-CIO
• Alliance for American Manufacturing
• Coalition for a Prosperous America
• International Brotherhood of Teamsters
• Narrow Fabrics Institute
• National Council of Textile Organizations
• Service Employees International Union
• U.S. Footwear Manufacturers Association
• U.S. Industrial Fabrics Institute
• United Steelworkers
• Workers United/SEIU

See the full letter here.

National Council of Textile Organizations (NCTO) President and CEO Kim Glas sent a letter to Acting Director of the Office of Management and Budget (OMB) Robert Fairweather, requesting the agency reconsider and approve a proposal to direct U.S. Customs and Border Protection (CBP) to collect Section 301 penalty duties on billions of dollars of Chinese goods currently shipped duty free under Section 321 de minimis waivers.

“There has been an exponential growth of shipments to the United States in recent years that qualify for Section 321 duty-free treatment,” Glas said in the letter. “U.S. manufacturers of textiles, apparel and other consumer goods that routinely sell for less than the $800 de minimis threshold increasingly find their markets and workforce threatened by this tariff avoidance scheme.”

The letter details how the current Section 321 provision is now being coupled with e-commerce to provide billions in duty avoidance on these imported products, including:

• Increased import price pressure on domestic manufacturers of various types of consumer items that routinely sell for less than $800 such as – apparel, footwear, home furnishings, toys, consumer electronics, flatware, auto parts, etc.
• An inability to properly identify and block the importation of adulterated products posing a health and safety risk to consumers.
• An inability to properly identify and block imports of counterfeit products that violate intellectual property laws.
• Enhanced ability of countries like China to access the U.S. market, despite their failure to provide reciprocal access to their markets and their persistent illegal and unfair trading practices.

“Imported merchandise from China that enters under a Section 321 waiver is exempt from all normal tariffs and any penalty duties assessed under the current 301 case. This unreasonable and unnecessary duty exemption severely undermines the purpose and value of the existing Section 301 determination against China as an effort to address its longstanding predatory trade practices,” Glas stated.

“The Biden administration should undertake an exhaustive review of this problem to develop the policy changes needed to mitigate the damaging impact of Section 321 waivers on U.S. workers and manufacturers,” Glas added. “In the interim, it is critical that the OMB and CBP take reasonable steps, such as denying Section 321 benefits to goods covered under the existing China 301 determination [tariffs]. Doing so would be a valuable first step toward limiting the dangerous and growing exploitation of this tariff waiver mechanism.”

The National Council of Textile Organizations (NCTO) lauded Senate passage today of the U.S.-Mexico-Canada Agreement (USMCA).

“We are pleased the Senate voted swiftly to approve USMCA--a trade deal that we expect to significantly bolster textile exports to Mexico and the Western Hemisphere,” said NCTO President and CEO Kim Glas.

Mexico and Canada are the two largest export markets for the U.S. textile and apparel industry, totaling nearly $11.5 billion for the year ending Nov. 30, 2019, according to government data.

“USMCA is a win for the textile industry,” Glas said. “The improvements it makes to the North American Free Trade Agreement (NAFTA) will only serve to generate more business for domestic producers and create more jobs and investment in the U.S.”
NCTO worked with the administration during negotiations on USMCA and secured several provisions in the trade deal including stronger rules of origin for certain textile inputs and increased U.S. customs enforcement.

U.S. textile executives are ramping up to take advantage of the modifications in USMCA and some plan to build new business or expand existing business in areas such as pocketing, sewing thread and narrow elastics.

“Our member companies, making some of the most advanced textiles in the world, have long supported USMCA and are eagerly awaiting implementation of the trade deal,” Glas added. “We urge quick implementation of USMCA and thank the administration and Congress for their hard work to get the deal across the finish line.”

The USMCA updates and modifies the NAFTA and makes significant improvements, including:

• Creation of a separate chapter for textiles and apparel rules of origin with strong customs enforcement language.
• Stronger rules of origin for sewing thread, pocketing, narrow elastics and certain coated fabrics.  Under the current NAFTA, these items can be sourced from outside the region – USMCA modernizes this loophole and ensures these secondary components are originating to the region.
• Fixes the Kissell Amendment Buy American loophole, ensuring that a significant amount the Department of Homeland Security spends annually on clothing and textiles for the Transportation Security Administration is spent on domestically produced products.

The National Council of Textile Organizations (NCTO) issued the following statement regarding the expected passage today of the U.S.-Mexico-Canada Agreement (USMCA) by the U.S. House of Representatives.

“Passage of the USMCA in the House today will mark a significant step forward in advancing the trade deal through Congress and we urge the Senate to pass it swiftly,” said NCTO President and CEO Kim Glas. “Mexico and Canada are the two largest export markets for the U.S. textile industry, totaling nearly $12 billion last year, and several provisions in USMCA will help producers expand and build new business in the critical Western Hemisphere supply chain.”

NCTO worked with the administration during negotiations on USMCA and successfully lobbied for several provisions and improvements that were subsequently incorporated in the trade deal that will close loopholes and strengthen U.S. Customs enforcement.

“We expect U.S. textile companies to export more to the region and invest more in the U.S. when USMCA is implemented,” Glas said. “Textile executives from North Carolina to New York have said they will seek to take advantage of the modifications in the trade deal and build new business in areas such as pocketing and sewing thread, as a result of stronger rules of origin and Customs enforcement.”

The USMCA updates and modifies the North American Free Trade Agreement (NAFTA) and makes significant improvements, including:

• Creation of a separate chapter for textiles and apparel rules of origin with strong customs enforcement language.
• Stronger rules of origin for sewing thread, pocketing, narrow elastics and certain coated fabrics.  Under the current NAFTA, these items can be sourced from outside the region – USMCA fixes this loophole and ensures these secondary components are originating to the region.
• Fixes the Kissell Amendment Buy American loophole, ensuring that a significant amount the Department of Homeland Security spends annually on clothing and textiles for the Transportation Security Administration is spent on domestically produced products.