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Petition concerning the new international negotiations on the international trade of textile clothing products ACTE, the European Textile Collectivities Association has been working for ten years to defend and promote those territories which are principally dependent on the textile sector, both at European and national level. ACTE stands for textile communities in seven states of the European Union.

Introduction The new wave of international negotiations of the WTO (World Trade Organisation) represents a way forward for the future of the European textile and clothing industry. The failure of the Seattle Conference in December 1999 has had two effects: 1. To underline the need for a new approach in multilateral negotiations; 2. To negotiate a unilateral initiative of the European Union towards the developing world countries driving to offer an early application of the Marrakech Textile Agreement (ATV). An agreement, which would have further increased the pressure of imports on the sector. From this standpoint, it is important to observe two principles: · The textile sector cannot be 'a bargaining chip¹ used for the benefit of other industrial sectors; · The priorities of the negotiators must be to open the markets. In this way, with the end of the final quotas in 2005, the textile and clothing sector has a negotiating power, which must be used without further ado to obtain better access to the market. 1 -The recent development in the European textile and clothing sector The textile industry represents one of the major manufacturing sectors within the European Union. Some figures: Number of employees 2,400,000 Sales in euros 200 billion Export in euros 33 billion From 1995 to 1998 sales of textiles and clothing products from third world countries into the community market increased noticeably as a result of substantial stability in demand both for textiles and clothing. At present, about a third of European sales of textile and clothing products comes from imports. This penalises and increases unemployment amongst skilled Europeans. This increase has had two quite significant and disquieting repercussions: · Growth of the deficit estimated to be, in 1998, over 21,000,000,000 euros; · Decrease of employment in the sector from 1995 to today 210,000 units on the European level.

2 - The strategy of ACTE in view of the next international trade negotiations The new wave of negotiations will have to be based on the following principles: 2.1.- Competition in conditions of reciprocity This situation of progressive loss of competitiveness for the European textile and clothing industry is likely to become more acute from 2005, when certain rules introduced by the Multifibre Agreement cease to apply which have until now limited the flow of products from developing or newly industrialised nations into Europe. From the situation which will evolve as a result, Europe, among the major geographic areas of consumption at a global level, will be more accessible and vulnerable to imports of textile and clothing products. European industry will thus find itself pushed out of its own market by products from countries where the labour costs are cheap, not only, but, owing to the effect of high customs duties, maintained by other countries, as well as non-tariff barriers to protect national industries, it will continue to have extreme difficulty exporting products that could be placed in the medium-to-high price range to these markets. The same effects will not be felt by other economic areas, which having a system of particularly high customs duties will still find ways of protecting their own market. This is the case in the United States, or in the developing or newly industrialised countries, such as India or China. While the duty in Europe for imported wool textiles is 12%, a wool textile made in Europe and imported into the US has to pay 31% duty, into China 30%, and into India 40%. From this scenario, one can see that the lack of increase in internal demand, and the increase in the flow of imports means that there is a growing need for the European industry to compete on an equal basis, both in internal and foreign markets. 2.2.- Consistency of rules In view of the new rules it is however necessary to move towards a consistent tariff structure that eliminates tariff peaks. This objective must proceed equally with that of their simplification in order to avoid the fraud and uncertainty to which those operating in the field are often subject. In order to achieve this it is necessary that the whole of the European countries join the single currency. 2.3 - Commerce and development In view of this objective, and with the purpose of strengthening the capacity of developing countries, the Commission has recently proposed the introduction of tariff bands with the aim of creating average rates weighted according to the level of a country’s development and the sensitivity of the products. This approach could represent a positive transition towards reducing tariff barriers to worldwide commerce in the sector, but only if every country is prepared to accept it. At the same time, but only if the proposal to award developing countries considerable preferential tariffs for products and fields that are of interest, risks penalising once again the textile and clothing industry, re-introducing different rates according to fields and products, and sacrificing again those European products most affected by competition from countries with low labour costs. It is obvious that the developing countries will, in fact, press for the protection and strengthening of their more competitive industries, including textiles and clothing. In order not to favour countries that can already penetrate the worldwide textile and clothing market easily, and which have internally developed a strong productive

capacity, it is necessary that the preferences are limited to a specific number of countries among those which are most disadvantaged. It is therefore necessary that the European Union, during its negotiations ensure that such a possibility is determined by the objective conditions of the country. 2.4 - Elimination of the non-tariff barriers The European Union, on the basis of a survey held last year, has found that, for textile and clothing products in 24 countries, there are as many as 174 non-tariff barriers, that is to say technical and procedural obstacles which make access to the market difficult and costly. Among these countries are the United States with 12 types of obstacles, India with 12, China with 7, South Korea with 9, Argentina with 17, Brazil with 13, Mexico with 15. The liberalisation of exchange therefore also means: · simplification of procedures; · the reduction of bureaucratic formalities; · the transparency in commercialisation procedures and public markets. The customs rules themselves are import barriers. The documentation required, registration formalities and procedures for getting products through customs represent difficulty and added cost to European producers who export to other countries, both developed and industrialised, and amount to protection mechanisms for local industries, often supported in their trading activity by state aids and export incentives. 2.5 - The application of the law of competition But access to markets is also frustrated by the absence of a multilateral framework for applying the law of competitiveness. In addition it is necessary to fight fraud and unfair practices. One of the main competitive advantages of the European textile and clothing industry is its ability to create and innovate products in response to the development of markets. An ability that is supported by a huge mobilisation of human and financial resources: The protection of the intellectual property and the fight against counterfeiting therefore are an essential necessity for European industry. 2.6 - Environment and social issues In order to improve the conditions of competition and to promote sustainable development, it is necessary that the objective of liberalisation of exchanges accompany a system of guarantees whose aim is to: 1. define a system for protection of consumers; 2. reduce the negative environmental impact of manufacturing activities; 3. promote better working standards. With regard to the question of the environment it is necessary to: · for the WTO to clarify the ecological labelling system and harmonise the rules; · harmonise the regulations; · define standards and agree procedures of certification and making products; · conform to national standards to prevent requirements for additional tests or conformity of tests from becoming a hidden form of protectionism;

路 define a group of trade measures in order to achieve the aims of environmental policy through multilateral environmental agreements. Promotion of respect for fundamental working standards must be part of the agenda of the next international trade negotiations. Respect for standards must be achieved by commercial sanctions, and the re-use of standards for the purposes of protectionism must be rejected. At the same time, however, the issues of fundamental rights of work should be dealt with during the next international trade negotiations. The system of European Union incentives for developing countries that respect the main conventions of the International Labour Organisation is insufficient and it is by now clear that there is no evidence of the creation of a WTO working group to examine the relationship between international trade and fundamental working rights. Within this picture the social brand becomes an important objective that must be considered as a means of informing and protecting of the consumer. As in the environmental question, a definition must be made of non-protectionist instruments based on the market in order to reach pre-defined aims and allow consumers to make informed choices. In the light of all this ACTE (European Textile Collectivities Association) having analysed the problems relative to the sector, verified the prospects and identified the operative proposals for the safeguard and promotion of the sector. CALLS on the European Union to strongly support the textile clothing sector, through the strategies mentioned in this document. REQUESTS Local Authorities, National States and International Organisations, and in particular the WTO (World Trade Organisation) the ILO (International Labour Organisation) the UNO (United Nations Organisation) and the Council of Europe, to adopt the strategies mentioned in this document. Furthermore, in order to raise the awareness of the political, institutional, social and the working world. PRESENTS A European week of textiles and clothing to be held in the second half of 2000, during which the signatures of entrepreneurs, public administrators, and citizens of the European Union, will be collected. The text of the Petition, and the collected signatures, will be handed over to the President of the European Commission, Romano Prodi.

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