Brussels, 10/03/2008 (Agence Europe) - Despite structural problems, the Mediterranean textile and clothing industry, closely linked to the European industry, is doing well and is reported to have a bright future ahead. Looking back over 2007, the EuroMed Centre of Textile and Clothing Managers (CEDITH) points out that exports to the EU from non-EU Mediterranean countries grew 4.3% in 2007 to €75.38 billion. Turkey is the EU's 2nd biggest supplier of textiles after China. Its exports to the EU rose 6.5% in 2007. Tunisia, the EU's 5th greatest supplier, increased its exports to the EU by 5.0% and Morocco, the EU's 6th biggest supplier, by 6.4%. Egypt, the EU's 16th biggest supplier, increased its clothing export to 6.5%. The above-mentioned countries are also the EU clothing industry's main suppliers of raw materials, inputs, technology and equipment, increasing their share of global trade (in Europe) from 23.6% to 24.0% according to CEDITH. By comparison, China's share of the EU market rose to 34.6% in 2007 from 31.5% in 2006.
Turkey, Tunisia, Morocco and Egypt engage in mutual free trade with the 27 EU member states and are in the process of opening up their markets to one another. Through its signing of a customs union deal with the EU and bilateral trade deals with Tunisia, Morocco and other countries, Turkey's market is now accessible. The early application of a pan-European 'rules of origin' system for textiles and clothing from 2005 onwards (before it becomes a fully-fledged EuroMed system) has encouraged this trend. At the end of last year, Tunisia completed its gradual phasing out of trade barriers in all industries apart from services (currently under negotiation) and farming (a special case). Morocco and Egypt are involved in similar processes to reduce trade barriers. Tunisia, Morocco, Egypt and Jordan signed the free trade Agadir Agreement (that came into force in March 2007) to open up their markets to the other signatory countries, and the agreement is also open for signature by Algeria, Lebanon and Syria. Palestine and Israel are a case apart - the prospect of Israel and Palestine signing a special trade deal with the EU is under study. The main industries covered are textiles, clothing, automobiles and new technology. Two sector-specific studies are underway to help companies make use of the original pan-EuroMed system which, according to the president of a standing Agadir Agreement committee, Ferid Tounsi, encourage synergy and boost investment.
The initiators of the Agadir Agreement, including the EU (which is encouraging other countries in the region to sign up) and CEDITH, argue that EuroMed cooperation will help EU and Mediterranean countries' industries cope with globalisation. CEDITH explains that there is a raft of benefits on offer which it considers competitive. Egypt, it explains, due to its high-performance payroll costs and competitive cotton-based products, is doing very well indeed, with export growth of 8.3%. Turkey has increased its exports by 7.7% despite rising payroll costs. Morocco's exports have grown by 6.2% and its share of the market has increased from 4.3% to 4.4%. Tunisia has grown by 3.9%. Improved investment is helping these countries stand united against the challenges of globalisation. Ferid Tounsi explains that investment from EU companies in the EuroMed area is no longer taking the form of relocation but rather of redeployment in a common area (the EU's internal market and countries which have gradually joined it). This area, he said, has already been joined by many EU companies which have already invested in the Southern Mediterranean. Tounsi said it should also gradually benefit Southern Mediterranean companies and boost investment. It is against this backdrop that the European Commission has decided to support a conference organised in Brussels on 8 April 2008 under the aegis of EU Trade Commissioner Peter Mandelson by an Agadir Area business investment forum.
CEDITH explains that companies from countries around the Mediterranean will continue to improve their outsourcing offering, taking advantage of geographical proximity with EU companies wishing to outsource services. The increased range of services should help counteract the structural economic slowdown in outsourcing countries and Asia, adds CEDITH. Asia is currently the main supplier of EU demand for textiles and clothing. Overall European textile and clothing imports rose 4.3% in 2007 to €78.6 billion. CEDITH explains that this was despite a slowdown in EU clothing and textile imports from China, which 'only' rose by 14.5%, although China's share of the EU's total clothing and textiles imports remained strong at 34.6% in 2007, compared with 31.5% in 2006. China's growth has hurt most other suppliers, including some from Asia like Hong Kong (-32.7%), Bangladesh (-4.5%), Indonesia (-10.8%), Thailand (-6.3%), South Korea (-4.4%), Taiwan (-19.2%) and Cambodia (-7.0%). The only other Asian countries (apart from China) whose share of the EU textiles and clothing market is rising are Vietnam (up 10.8%), Sri Lanka (up 7.3%) and India (up 3.3%). (F.B.)