As trade deficit rises, EU warned of overreliance on China and Bangladesh for textile imports

Euratex (European Apparel and Textile Confederation) has noted that EU textile imports rose 36.6% in value terms with a significant amount coming from China and Bangladesh outweighing positive export performance.

As a result, the EU's trade deficit in textiles and clothing has grown to €70b, which is 48% higher than the year before.

The trade body in its 2023 Spring Report said, "Such a growing deficit is a cause for concern; the objective of the EU's Industrial Strategy to strengthen our resilience and "strategic autonomy" is not happening. Instead, our dependency has increased, and becomes critical in certain raw materials and fibres."

The trade body also pointed out that the figures undermine the Commission's goal of promoting and prevailing high-quality, sustainable textile products on the Single Market, regardless of where they were produced. With imports reaching €140 billion, it will be difficult to effectively monitor their quality and compliance. It will be necessary to intensify market surveillance significantly without hindering trade.

In order to rebalance trade relations with the rest of the world, the European Union must also devote more effort to export performance, Euratex suggested.

"EU companies are world leaders in high-end fashion products and in technical textiles. More needs to be done to support their activities in established markets but also emerging economies. For instance, the ongoing FTA negotiations with India should focus on improving market access and ensure "fair" competition with local companies," Euratex said.

The Spring Report from Euratex highlights significant differences in trade-in value and volume. The value of EU textile exports has increased by 13%, but the volume has decreased by nearly 7%. This undoubtedly reflects the extremely high inflation figures from the previous year, which were initially caused by rising energy costs and a shift in central bank policy. This then causes consumer uncertainty, resulting in low demand and gloomy prospects for the entire value chain.

Director General of the trade body Dirk Vantyghem said, "This report confirms once again that textiles are one of the most globalised sectors of the European economy, and hence the importance of taking that global dimension into account when designing EU and national policies. Failing to do so may have a devastating effect on the global competitiveness of the European textile industry."

Looking forward, he added, "It is essential to stabilise inflation, restore consumer confidence and ensure a level playing field for all operators in the textile industry. On that basis, European companies can prosper and offer quality jobs to 1.3 million workers".