EU Textile and Apparel Industry Sees Positive Impact of the TTIP

The European Apparel and Textile Federation (EURATEX) on September 26, 2013 hosted a luncheon event on the current US-EU negotiation on the Trans-Atlantic Trade and Investment Partnership (TTIP), particularly the impact of the agreement on the EU textile and apparel sector. According to Mr. Alberto Paccanelli, president of the EURATEX, the United States currently is the EU 2nd largest export market for T&A (over $4.5 billion Euros) and the largest when counting textiles alone. Alberto said that the US market is highly price sensitive and this is one of the reasons why tariffs remain an effective barrier to EU exports. For example, the US still charges a tariff rate as high as 28.2% for imported man-made fiber overcoat and 32% tariff rate for man-made fiber T-shirt. Alberto further added that:

“The EU-US negotiations are the key priority for the EU Textile and Clothing Industry. EURATEX has made a rough assessment on the benefits of the Agreement: it is estimated that exports would register possible annual increases between 2.5% and 3.5% on top of the normal growth rate in Exports due to the Agreement. The EU should strive for duty free access from day one without exceptions and in what concerns Non-Tariff Barriers we should aim at harmonization and mutual recognition. It is also critical to improve access to the Public Procurement Markets and ensure a high level of intellectual property right (IPR) protection and enforcement. The TTIP Agreement should improve business conditions for small and medium-sized enterprises (SMEs), simplifying customs procedures and the costs associated. For the EU Textile and Clothing Industry Rules of Origin are also critical and double transformation should be ensured.”

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Author: Sheng Lu

Professor @ University of Delaware

3 thoughts on “EU Textile and Apparel Industry Sees Positive Impact of the TTIP”

  1. I think that is the EU and US can come to agreements with TTIP, the EU will benefit greatly. They will unlock the US as an even bigger export source for their textile and apparel products. I think this will benefit the EU’s economy and help out with a lot of the financial crises that have been happening across Europe, but I also think it will benefit the US as well, maybe not in the textile sector, but in the retail side of the apparel sector. I think the opportunity to make more European products available in US stores will boost consumer spending. I think now it is becoming much more acceptable for people to have eclectic styles and to follow their own trends. As a TMD student I have learned all about the styles of the past and what was fashionable during different decades and I think now more than ever, it is okay for people to wear what they feel comfortable in rather than what is considered the style of the time. With that being said, I think being able to have more affordable European clothing will spike consumer spending. Those styles and products won’t have 20-30% tariffs anymore and the EU will be able to utilize the US markets. I think it’s a win-win situation for both nations.

    1. great points. It is with my great hope that the TTIP will come to an early agreement and benefit consumers of both sides. However, similar as the case study 2 you just did in class, reaching a trade deal is never an easy job. simply put it, globally competitive industries aggressively want to achieve more market access through the trade agreement while those less competitive ones will always try their best to get protected. What’s more, tariff reduction is a relative simple negotiation topic, compared with other agendas such as non tariff barriers, market access in the service sector and regulatory coherence. Always, the domestic forces will have their voice be fully heard and lobby the policymakers. Although the US and EU are like-minded parties, the negotiation will be quite tough. For example, the EU film industry strongly opposes opening the market to the Hollywood movie. So it is with the wine industry in France, which receives lots of subsidies from the EU.

  2. The U.S. being the second largest export market for textiles and apparel makes them have a comparative advantage. The U.S. has a high tariff rate mainly for protectionism. One reason why the U.S. may adjust the tariff rate is to prevent the foreign market from overexerting it’s forces on the domestic market. Tariffs are affected by NAFTA. The only problem with tariffs is that it limits free trade.

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