Opinion of the Economic and Social Committee on the 'Communication from the Commission to the Council, European Parliament, the Economic and Social Committee and the Committee of the Regions: Plan of action to increase the competitiveness of the European textile and clothing industry'
10. 7. 98 EN Official Journal of the European Communities C 214/95 Opinion of the Economic and Social Committee on the ‘Communication from the Commission to the Council, European Parliament, the Economic and Social Committee and the Committee of the Regions: Plan of action to increase the competitiveness of the European textile and clothing industry’ (98/C 214/26) On 30 October 1997 the European Commission decided, under Article 198 of the Treaty establishing the European Community, to consult the Economic and Social Committee on the above-mentioned communication. The Section for Industry, Commerce, Crafts and Services, which was responsible for preparing the Committee’s work on the subject, adopted its opinion on 1 April 1998. The rapporteur was Mr Malosse. The Economic and Social Committee, at its plenary session of 29 and 30 April 1998 (meeting of 29 April) adopted the following opinion by 85 votes to 5 with 13 abstentions. 1. Introduction 1. 1. The textile and clothing sector, a traditional activity catering for one of the essential needs of society, has experienced major upheavals resulting from the international trade trend which encourages the emer- gence of new low-wage production areas (Northern Africa, Asia, Eastern Europe, Latin America). The development of new technology, the changes in the tastes and behaviour of consumers, and the retail revolution have accelerated this change. In the European Union, this transformation has unfortunately been accompanied by the loss of many jobs — particularly the least skilled jobs, often filled by women — and by a disastrous situation in many areas of traditional activity which have not managed to modernize or reconvert. There is now clearly a widening gulf between 1. 2. a part of the textile/clothing sector which is very competitive and enterprises which are still not competi- tive and have not managed to adapt. 1. 3. It is, however, noteworthy that the sector has succeeded in retaining a number of its strengths, mainly thanks to the existence of a highly integrated processing chain, a world class equipment industry, a highly efficient manmade fibres industry, a very large number of highly creative SMEs and artisans, and a generally highly skilled labour force. Other strengths include the dynamism conferred by European fashion design (stylists, haute-couture, ready-to-wear) which domi- nates the world market. Also worth stressing is the positive role as a vehicle of European fashion played by specialized retail outlets, both abroad and in the centres of European cities where fashion shops are located. 1. 4. In 1996 intra-Community exports reached ECU 53,4 billion, while exports to third countries rose to ECU 30,3 billion, making this sector one of the leading sectors for European exports. There is, however, concern about the future because of the financial crisis in Asia, involving devaluations which could mean for Europe a flood of imports at low prices and more difficult access to Asian markets. 1. 5. Despite its strengths, the sector has suffered many job losses in recent years — estimated at 600 000 between 1990 and 1996. Indeed, forecasts for the coming years are equally alarmist, showing a trend of 100 000 jobs lost per year. It is therefore essential to adopt an offensive strategy which seeks to slow down and indeed stop this job shedding, following the example of the very numerous successes of many enterprises in the sector which have managed to maintain or create jobs. In order to have a better idea of what is at stake, the ESC, in consultation with the European Commission and the European Parliament, took oral evidence from the main interested parties on 23 January 1998. 2. General comments 2. 1. The Commission communication has the great merit of having sparked off a wide-ranging debate about the idea of a real strategy for the sector at European level. It will be possible to regard it as an authentic plan of action if it is accompanied by more specific proposals, by a description of the financial and human resources required, by a timetable for implementation and by mechanisms for the inter-departmental follow-up and coordination which are essential for effective appli- C 214/96 EN Official Journal of the European Communities 10. 7. 98 cation. The Economic and Social Committee therefore calls on the Industry Council to give practical expression to the good intentions contained in this communication, in view of the urgency of the expectations expressed. The Committee regrets that this communication 2. 2. does not include a breakdown of the sector’s perfor- mance by Member State, which would make it possible to measure the best performances and analyse their causes. It also regrets the absence of a more thorough structural analysis of the sector. It is indeed essential, even when discussing an integrated sector, to be able to measure the diversity of trades and positions of competitiveness effectively: 2. 2. 1. and generally very efficient. A textile machinery industry, very concentrated A dynamic textile sector for non-garment 2. 2. 2. purposes: upholstery and carpets, other industrial uses, automobile industry. 2. 2. 3. A labour-intensive ready-to-wear industry, employing mainly women and located in sensitive employment areas. It is dominated by small enterprises. 2. 2. 4. Subcontracting, particularly in the ready-to- wear industry, which according to the European Com- mission’s figures employs more than 650 000 people in the European Union, of whom 200 000 are craft workers, some working at home; this is an essential employment factor in certain employment areas. Made-to-measure and sewing/repair workshops, with their specific charac- teristics, also form part of the sector. 2. 2. 5. Insufficient R&D in the European Union, particularly where new fibres and materials, often linked with safety and health requirements, are concerned. 2. 2. 6. Fashion and haute-couture: fields where Euro- pean designers and stylists play a leading role in the world and contribute, through brands and design, an added value which is often much higher than production value alone. Commerce is often the vehicle of fashion and 2. 2. 7. European design inside and outside Europe (notably specialized boutiques and up-market department stores which in general give priority to quality and service), while large-scale retailing relies more often on cheapness, selling goods imported at very low prices which allow for substantial mark ups. 2. 3. However, the Committee is pleased to note that the Commission acknowledges in the communication that the textile and clothing sector is more than a traditional activity — it is also a sunrise sector which provides work in the European Union for 2 200 000 people, in 120 000 enterprises, many of which, regardless of size, are very competitive and have strong growth potential. Moreover, consideration should also be given to distribution, which plays an essential role for this sector, as for the footwear industry and for all fashion- related activities and accessories. In its wider definition, this sector thus represents about 5 million jobs in the European Union. Even though these activities have their own specific problems, the Committee advocates a broader approach for the plan of action, which would give it greater coherence and weight. For the whole of the sector concerned, the 2. 3. 1. creative and cultural content is a decisive factor for the success of Community exports. The sale of a high-quality garment means selling not just a fabric, but also a content linked with ‘creativity’, knowhow, an image and a lifestyle. The Community must therefore contribute to promotion measures which seek to make the most of the sector’s cultural aspects. Creativity (patterns and designs) is a trump card for European industry vis-à-vis international competition. Effective protection of this type of intellectual property at national and international levels is of enormous importance for this industrial sector. At present there is no uniform, harmonized protection of intellectual property at Community level, applicable to fashion patterns and designs. The Committee takes the opportunity to stress the urgent need for a directive on the matter, promised in the past but not yet adopted. 3. Promoting the legitimate interests of European industry on world markets 3. 1. The subject of better access to third country markets is insufficiently dealt with in the action plan, and that of import controls is barely touched upon. Yet this is an area where the Community has exclusive powers. Whereas the European Commission, after con- sulting the sector, recently opened up the EU more to imports, in view of the fact that the Multifibre Arrangement (MFA) expires in 2004, the Committee calls for determined action on the basis of the instruments which the European Union already has, and in accor- dance with the rules of the WTO. Here the Committee would stress the question of reciprocity. For example, 10. 7. 98 EN Official Journal of the European Communities C 214/97 European clothing products are currently subject to 22 % duties on entry to the American market, as against only 12 % duties on the USA’s corresponding exports to the European Union. In the field of public contracts, it has been noted that a growing share is accounted for by suppliers from non-member countries, whereas recipro- city barely occurs, as a result of a very large number of barriers or discriminatory practices which contravene the Agreement on Government Procurement concluded in the GATT framework. 3. 2. The European Commission has set up a database and an Internet site which are directly accessible for economic operators and make it possible to list barriers to European imports by third country markets (‘Market Access’). This database has been very successful, but its use should be further encouraged, particularly among those working in the textile and clothing sector, who frequently complain of the barriers affecting them. However, this database is only one instrument available to the European Commission for lifting these barriers after identifying them. In view of the large number of barriers identified by the ‘Market Access’ base (more than 600 in less than a year) and the small number of cases initiated under the regulation on trade barriers, one can only urge the Commission to be even more aggressive in the positive sense of the term — the approach which European Commissioner Sir Leon Brittan announced to the Economic and Social Com- mittee in October 1997. 3. 3. The Committee draws attention to illicit prac- tices injurious to international trade and suggests that all the instruments available to the European Union be used to combat them. In the event of dumping the Council must 3. 3. 1. assume its reponsibility for deciding whether or not to confirm the provisional anti-dumping duties. By not confirming provisional decisions taken in accordance with a transparent procedure, the Council could serious- ly damage European interests. 3. 3. 2. Taking as a model the stringent checks carried out by US customs, the EU must combat all fraudulent practices (counterfeit documents, etc. ) more effectively on the basis of the case law of the European Court of Justice (May 1996 judgement in the ‘Faroe Seafood’ case) and the EU’s Unit on Coordination of Fraud Prevention (UCLAF). mission will soon be issuing a Green Paper which must in the Committee’s view raise awareness among the general public of the damaging effects of such practices, e. g. in terms of jobs. Surveillance teams should be established in ‘high-risk’ countries, in cooperation with the local authorities. Initial soundings at the recent ‘Asia-Europe Business Forum’ in London were encouraging. 3. 3. 4. The Community must not hesitate to use the legal weapon of a modification to the generalized scheme of preferences (GSP) to encourage developing countries to combat fraud and counterfeiting. 3. 3. 5. The Committee also calls upon the relevant national and Community authorities, in consultation with trade circles, to consider the establishment of marking showing the place of manufacture, to combat evasion of the rules and thus ensure transparency and proper information for the consumer. Various approaches can be considered, taking into account a definition based on the place where clothes are made up and retaining the image of prestigious national marks such as ‘made in Italy’ or ‘made in France’. 3. 4. Going beyond the current instruments, the Com- mittee urges the Union to pursue a more offensive strategy within the WTO — concerted with the circles concerned — with a view to more transparent, more balanced and more humanly acceptable rules in the field of international trade: restriction of GSP treatment to countries which are really in difficulty, effective application of the reciprocity principle, and promotion of the ILO’s social conventions through both positive measures (strengthened preferences) and negative measures in the event of flagrant non-compliance (forced labour of prisoners and children). In this context the Committee supports the development, in consultation with the trade, of environmental or ‘social’ labels such as the American ‘child labour free’, provided that they are subject to rigorous checks and harmonization to ensure that they are not diverted to purely commercial ends. The Committee is pleased to note that labour and management organizations of the textiles/clothing sector at European level, EURATEX and the FSE/THC, signed on 22 September 1997 a ‘code of conduct’ whereby they actively encourage their members and therefore European enterprises in particular to comply throughout the world, directly or indirectly, with the minimal ILO Conventions relating to ‘core labour standards’, safeguarding the right of association and negotiation, and prohibiting forced labour, child labour and discrimi- nation in employment. It is particularly urgent to step up the fight 3. 3. 3. against the circulation of counterfeit goods. The Com- Special attention must be given, on the basis of 3. 5. these principles, to renewal of the Lomé Convention, to C 214/98 EN Official Journal of the European Communities 10. 7. 98 the prospect of a free trade area with South Africa and to the probable accession of Russia and China to the WTO. It is important to associate very closely with these initiatives the European parties concerned, namely industrialists, trade unionists, traders and consumers, to ensure that European interests are not constantly neglected in those negotiations. The Committee wishes here to stress respect for the principles of reciprocity and fair competition, and intends to make sure that the European Union does not, by opening markets unconditionally, encourage the development of activities contrary to the essential values on which the European Union is based, namely human rights, social rights, children’s rights and environmental conservation. The Committee is also pleased to note the initiative proposed by the European textile and clothing industry for a ‘magna carta’ to be signed by industrialists and trade-unionists of the countries belonging to the WTO on the principles of trade reciprocity, fairness, monitoring measures, preventing the counterfeiting of goods, and compliance with ILO social Conventions. 3. 6. The Committee also wishes to see tackled the basic question of counterfeiting and ways of effectively combating this problem, which mainly affects designers and brands of the European clothing and accessories industries (scarves, perfume, footwear and jewels) because of their worldwide reputation. The Committee asks the European Commission to make wider use of its prerogatives to strengthen the fight against these practices, particularly by ensuring more effective coordi- nation among national customs services. In the ‘sensitive’ countries, joint Commission and Member State anti- fraud units attached to delegations and embassies would have the task of identifying the main sources of illegal production and of taking action with the authorities concerned, through legal channels, to put an end to these practices. This monitoring and enforcement action must also concern the European Union itself, particularly in the ‘third pillar’ context, since these practices are also increasingly found in the EU. 3. 7. Even though public measures to promote exports are still the sole responsibility of the national authorities, industrialists and artisans in general wish the European Union to support collective action on third country markets: trade missions, exhibition centres, partici- pation in trade fairs, logistical centres. Such activities would in the Committee’s view be particularly appropri- ate for SMEs and the craft trades. The abolition of Exprom credits comes as a serious blow to the sector in this context. 4. Subcontracting, an essential link in the chain 4. 1. As the Committee pointed out in its opinion on ‘The competitiveness of subcontracting in the European Union’s textile and clothing sector’ (1), subcontracting link in the chain, because it makes is an essential for flexibility and provides alternative to wholesale relocation of jobs outside the European Union. The fact that high-quality European subcontracting is on hand boosts the competitiveness of the sector in that it enables the sector to react very quickly to changes in the tastes of consumers who follow the vagaries of fashion. Subcontracting is also a factor for innovation and creativeness thanks to the flexibility of the thousands of craft firms and SMEs involved. For many regions it is also a key source of employment, particularly for women. It is therefore important at European level to stimulate just-in-time and quality projects and good practice. In this respect the Committee endorses the initiatives launched by the European association EURA- TEX with the support of the European Commission, to facilitate rapid response research and technology transfer. The Committee stresses the interest of broaden- ing this initiative and of involving fashion designers and craft firms in this upstream, and specialized retail outlets downstream, so that this new dynamic flexibility extends throughout the whole sector. 4. 2. Outward processing traffic (OPT) and subcon- tracting in third countries are worth analysing more deeply. Particularly through the exchange of good practice (benchmarking) among enterprises, it would be possible to identify OPT which has positive effects on local employment. The track record of the North American NAFTA would be worth analysing in detail. Within NAFTA, enlarged to include the Caribbean States, a global strategy for the textile and clothing sector has been implemented. The Committee proposes that the European Union work out a similar strategy with eastern and central Europe, the Mediterranean third countries and the ACP countries which have signed the Lomé Convention. Together with the principle of reciprocal opening of frontiers and joint rules of origin, a European strategy must also involve commitments to respect basic social and environmental rules. This strategy must also involve instruments for facilitating inter-enterprise cooperation agreements in the large (1) ESC opinion in OJ C 66, 3. 3. 1997. 10. 7. 98 EN Official Journal of the European Communities C 214/99 Euro-Mediterranean area: inter-enterprise cooperation centres, joint programmes on training and new skills, investment assistance of the JOP or ECIP type (1), measures on health and safety at work, etc. The Committee recommends that the likely advantages of such a strategy be researched. 4. 3. This research will also need to cover the negative effects of uncontrolled subcontracting which eludes any economic or social rules: large-scale relocation to avoid employment in the European Union, and exploitation of local labour under conditions which violate human dignity and flout the ILO’s Conventions. 4. 4. The use of clandestine labour in Europe continues to plague the sector. The Committee calls for a Green Paper assessing this phenomenon, which affects all the countries of the Union: its scale should be estimated and solutions proposed, and this will no doubt require closer cooperation between Member States. 5. Improvement of general economic conditions 5. 1. The communication deals too briefly with the high cost of labour in Europe resulting from fiscal and other costs. Yet this is a major problem for Europe. As a large-scale employer, particularly of women, the textile and clothing sector can only benefit from an easing of charges and taxes on labour, particularly as regards less skilled jobs. This would be an excellent way of combating clandestine work, just as in principle reduced VAT for labour-intensive services could encourage such activity to develop in the sector. The Committee regrets that the European Employment Summit did not take up the proposals of the European Parliament to amend the Sixth VAT Directive in order to launch pilot projects to reduce VAT on labour-intensive services. 5. 2. The communication rightly deals with the funda- mental role of the social dialogue in the sector, particu- larly with a view to reduction/re-organization of work- ing time, training and job retention/creation. The Committee urges the social partners to concert their efforts on the subject. It would be useful for the Commission to survey the best practice followed in the Member States, and particularly agreements between the social partners aiming at flexibility of working hours associated with the retention or the creation of jobs. The Committee stresses that adapting working hours would be made all the easier if accompanied by measures to reduce labour costs, extended to all sectors so as not to distort competition. To be effective, the social dialogue must involve all representatives of the retail sector, craft industry and SMEs. It is therefore important for the Commission to ensure that the organizations representing these groups are well represented in any negotiation, both in general and in sectoral terms. 6. Training and skills 6. 1. The paradox of the sector is that, while there are still low-skilled job losses, there is a shortage of skilled labour particularly in certain regions of the Union: skilled workers are not often attracted by an activity whose brand image is unflattering and where the wages are generally below the average. 6. 2. The Committee therefore stresses the importance of an authentic training and skills policy, which would form part of a regional strategy involving the European Union and its neighbours (CEEC and Mediterranean countries). As well as bringing skills and wages up to a reasonable level, the trade must seek to make itself more attractive to young people. 6. 3. The European Union has a role to play here. The Committee would recommend better access to use of the Leonardo and Adapt programmes, which have been disappointing for many operators in the sector because of excessive administrative constraints and inadequate funds. In the context of the pilot actions of the European Union, the Committee recommends that a European network of training institutes be set up in order to foster exchanges of experience and encourage joint programmes. If this action is to be effective, it must also involve the professional associations and trade unions of the sector, including SMEs, craft industries and the retail trade, in order to align the supply of training with the needs of the sector. 7. Regional policy and framework for public support (1) JOP: Joint-Venture Programme; ECIP: European Com- munity International Investment Partners. 7. 1. The legitimacy of a Community regional policy cannot be disputed provided that it does not lead to create intolerable distortions of competition or C 214/100 EN Official Journal of the European Communities 10. 7. 98 production over-capacity, which would penalize the most efficient enterprises while failing to provide real prospects for sectors in difficulty which are simply assisted to ensure their survival. It is in that spirit that one must question whether the current Community regional policy is really consistent with a policy of organizing support on a multi-sectoral basis. It would be healthier now to have a greater transparency on the subject, with simple rules and more rigorous application of them. It would be preferable to assist disadvantaged regions by encouraging integrated measures to promote the local textile and clothing sector: training measures, quality control measures, technical centres, acquisition of new technology, agreements with the specialized retail sector. Measures for exchange of best practice could be taken at the European level, following successful examples. 7. 2. The European internal market is still operating inadequately. For example, as regards public contracts in the sector, there is very little opening up to enterprises from other Member States. It is even extremely common for national public buyers to drift away from European directives: inequality of treatment based on discrimina- tory criteria, selection based only on the lowest price, regulatory constraints. In this context the Committee draws attention to the recommendations in its opinion on the Green Paper on public procurement, for the replacement over time of badly transposed directives with regulations, for preference to be given to the best bid, for preferential quotas for SMEs and for the creation of independent authorities. In the field of technical standardization, there is a need for either harmonization or application of the equivalence principle, in order to put an end to national provisions — e. g. on the environment — which can be discriminatory. Taxation is a central factor in competitiveness 7. 3. and a major source of distortions of competition. This matter is insufficiently covered in the Commission communication. A proper assessment of the European Union’s taxation systems is more necessary than ever, particularly before the advent of the euro which will make it easier to compare conditions of competitiveness and competition. 7. 4. The European Commission has just quite rightly published an explanatory communication on compe- tition, covering trade fairs and exhibitions. This subject is particularly sensitive in the textile and clothing sector, where many European enterprises, particularly SMEs and designers, complain that they are refused access to events without being given legitimate reasons. The Committee therefore asks the European Commission to organize a Round Table involving the organizers of trade fairs in the European Union and the professional associations, in order to introduce greater transparency in the rules for admission to these events. The Committee also expects the Commission to take a more active role by intervening — partly under the Regulation on trade barriers — to defend the interests of European producers excluded from events in third countries. This is the traditional role of a public authority, and is preferable to the idea of maintaining representation bureaux for the sector abroad — an activity which obviously depends more on private or national initiative. 8. Making the most of competitive enterprises Despite its image as a sector in crisis, the 8. 1. European textile and clothing industry has undoubted strong points, with many leading firms on a world scale. In view of that, the Committee expects a plan of action to take a more dynamic overview of the prospects for enterprise and job creation in the sector. 8. 2. The research sector for textiles and clothing is insufficiently developed in Europe, particularly with regard to new materials and fibres. Many European designers, craftsmen and enterprises are turning to centres based in third countries. The Committee suggests that, under the heading of measures on new materials, the sector be directly associated with the ‘advisory groups’ which define the priorities for action. Better complementarity with national RTD measures should be ensured. 8. 3. There is considerable innovation potential in the sector, particularly with the SMEs. This potential is insufficiently utilized, for lack of the necessary financial and human resources. In view of this, one can envisage a decisive contribution by the European Union to dismantling barriers between innovation support net- works and technical centres, developing cooperative research procedures such as Craft and supporting demonstration projects linked with the introduction of new technologies. The demonstration projects could take the form of an ‘innovation Eureka’, combining public and private funds, European programmes and national measures, as the Committee suggested in its Own-initiative Opinion on ‘The impact on SMEs of the 10. 7. 98 EN Official Journal of the European Communities C 214/101 steady, widespread reduction in funds allocated to research and technological development in the EU (at Community and national level)’ (1). When applied to the textile and clothing sector, such an initiative must include fashion and design as forms of innovation. 8. 4. One of the sector’s structural weaknesses is a lack of financial attractiveness resulting from the low return on the net capital invested, which puts investors off. In the context of the growth and employment initiatives adopted at the European Employment Summit in Luxembourg, financial incentives were introduced to encourage enterprise creation and investment in the form of risk capital and guarantees. The Committee suggests that trade organizations, in partnership with financial intermediaries, be asked to identify projects which could benefit from these incentives, for both creation and relaunching of enterprises, in view of the high number of SMEs in the sector which are disappearing through lack of entrepreneurs willing to run them. 8. 5. The question of intellectual property is basic to the development of what is a very ‘personalized’ sector. Thus urgent adoption of the proposal for a European directive for protection of designs and models, and of the proposal for an authentic Community patent, must be among the priorities of the action plan. In addition, these legal instruments must be effective for combating internationally the scourge which counterfeiting consti- tutes for the sector. 9. Industrial cooperation among enterprises in the European Union 9. 1. In its opinion on subcontracting the Committee had already stressed the need to ‘encourage cooperation among SMEs, including small traders, so as to promote liaison between the conduits of European fashion and, where appropriate, through a policy of offering high- quality products at competitive prices, enable SMEs to compete more effectively with imports and defend their interests vis-à-vis major retail chains’. 9. 2. More generally, it is necessary to question wheth- er the current instruments for supporting cooperation (BC-NET, Interprise, Europartenariat) are really adapt- ed to the sector’s needs. Greater sectoral specialization in their operation is a way of identifying potential partners more rapidly; also helpful would be information and assistance activities on the part of the chambers of commerce, chambers of trades and professional organizations. The current 9. 3. instruments for intra-European cooperation often cease to apply after the initial contact. In its opinion on subcontracting, the Committee had therefore called for ‘a proper financial instrument. for promoting partnership between small and medium-sized enterprises within the EU’. It is pleasing to note that this proposal has been followed up by proposing an instrument known as ‘JEV’ (2), corresponding to this objective; the proposal, included in the ‘Growth and Employment’ initiative, is welcomed and supported by the Committee. 9. 4. Special attention could be given to instruments for partnership (JOP, ECIP) with neighbouring third countries, particularly in Eastern Europe and the Medit- erranean basin. Indeed, controlled industrial cooper- ation, which maintains the essential part of the value added in the European Union, can encourage the integration of these countries’ industry into the EU and facilitate access to emerging local markets. In this connection, the existence of industrial cooperation centres promoted by the EU in these countries is a way of following up these industrial cooperation projects so as to ensure that they are approached in a spirit of cooperation and not merely as cases of relocation. It is also desirable to extend to Asia and South America the partnership instruments available for promoting the activities of European textile and clothing enterprises in these countries. 10. Commerce and consumers 10. 1. The Committee would point out that retail is an indispensable link in the chain, particularly where large department stores or small specialized retail, retailers are concerned. In this context, it is important for traders to be associated with all the projects, particularly those involving training or cooperation. In this context the Committee would draw attention to its proposal for pilot projects for cooperation between SMEs with the aim of creating common structures for design, production and distribution so as to increase the added value of each element in the chain, including through a pricing policy, in order to compete better with large-scale retail (3). 10. 2. The Committee would also stress the fact that consumers are often ill-informed or uninformed about the origin and production conditions of the products available to them, which would warrant carrying out a study on the introduction of origin-marking. The Committee would stress the importance of pilot projects which would associate producers, distributors and (1) ESC Opinion in OJ C 355, 21. 11. 1997. (2) JEV: Joint European Venture. (3) ESC Opinion in OJ C 66, 3. 3. 1997. C 214/102 EN Official Journal of the European Communities 10. 7. 98 consumers, particularly to combat counterfeiting. The development of social or environmental like marking of the place of manufacture, is also a way of making retailers and consumers more responsible in their choices. labels, 10. 3. There are differing national laws with the aims of protecting the health of consumers and protecting the environment, particularly with regard to certain chemicals used in the processing of textile and clothing products. Effective operation of the internal market requires harmonization at Community level, and the Committee calls for a Commission initiative to ban certain substances, particularly PCPs and azo colouring agents, and restrict the use of formaldehyde and heavy metals. 10. 3. 1. In these fields, a special research and develop- ment effort should be made under the fifth Community framework programme, particularly on new substances with properties which are beneficial to safety or health (e. g. allergy prevention). The potential effects of new substances just discovered must also be ascertained, and there must be strict monitoring of imported products which often do not conform with Community require- ments. 11. Recommendations Number 1 The Committee notes that the textile and clothing sector, which directly employs 2 200 000 people in the European Union — nearly 5 million if one includes accessories and footwear — is a promising one with real growth and employment potential for Europe. In particular, the Committee would stress the positive role played by SMEs and craft workers who ensure that the sector is creative and flexible. In this context the Committee would welcome a European blueprint for improving competitiveness, provided that it contains a precise timetable, properly identified resources and a mechanism for follow-up and monitoring. Number 2 The Committee takes the view that this plan of action should concentrate primarily on the fields where the European Union is directly competent, namely: — An external trade policy based on reciprocity, in which the priority must be to ensure wider access to third country markets for European products. — Collective promotion measures on third-country markets through the relaunching of the Exprom programme. — A completed internal market, particularly in terms of standards and the opening up of public markets. — Encouragement and protection at Community and international levels of European fashion design and brands, particularly through the Community patent, arrangements to protect designs and models, and active measures against counterfeiting and fraud. — Strengthened monitoring to prevent dumping and illicit trade practices, and promotion of a charter for fair trade at the international level. — An active link between liberalization of trade for the benefit of developing countries and respect for basic social rights as defined in the ILO Conventions. Number 3 The Committee, after submissions from the main inter- ested parties, makes the following recommendations for practical measures: — Making it easier to use the European Union’s existing financial resources (European Structural Funds, Leonardo programme) for measures to improve skills and speed up the dissemination of new technology, especially towards SMEs, craft industries and subcontracting in general. — Reorientating a significant share of the future frame- work programme for R&D towards support for innovation, creative design and the use of infor- mation technologies (Craft and Eureka innovation procedures). The textile and clothing sector must also have a chance to benefit from the new ‘Growth and Employment’ financial engineering measures decided at the Luxembourg Summit, to cover inter- enterprise cooperation, launching of enterprises and their relaunching under new management, and intro- duction of new technologies. — Providing the plan of action with significant resources (pilot projects, benchmarking) for encour- aging cooperation between firms: collective pro- motion measures aimed at third countries, use of EDI to set up rapid-response systems involving SMEs, craft industry, subcontractors and the special- ized retail sector, strengthening of the JEV instrument for firms, and finally the networking of specialized training institutes, in association with the operators. 10. 7. 98 EN Official Journal of the European Communities C 214/103 — Commissioning a study of the effects of Asian monetary, stock-market and structural disturbances on the activities in the sector which are among those most affected. Number 4 The Committee, aware of the social stakes in a sector which is still very largely labour-intensive, and in view of a worrying and unacceptable contraction of employment, advocates: — an intensified sectoral social dialogue to achieve progress in reorganization of working hours, upskill- ing and employment, particularly by identifying the most innovative agreements; the code of conduct signed by the European social partners; — combating illegal work at European Union level through coordinated action by the Member States; — a regional strategy to develop a priority area of commercial and industrial cooperation with eastern European, Mediterranean, Asian and South Amer- ican countries. This area of complementary activities (sub-contracting, franchises, etc. ) can guarantee new outlets and increased competitiveness for the EU textiles sector. It can also help to raise the standard of living and the employment level in these countries, and be accompanied by effective monitoring of protection of, in particular, social and environmental conditions. The Committee urges the Commission to undertake a study of this matter in consultation with the industry. — effective measures at national level to ease the payroll Number 5 taxes affecting unskilled labour; — anticipation of changes through a high-level group composed of qualified representatives of the various parties concerned; foreseeable industrial — a more determined policy on the part of the European Union to promote the basic ILO Conventions and Brussels, 29 April 1998. Aware of the fact that this communication must be regarded as a starting point, the Committee recommends the drawing-up of a precise timetable for implementing the plan of action. Through an assessment published annually, it would be possible for the parties concerned, including the Economic and Social Committee, to watch over its effective implementation. The President of the Economic and Social Committee Tom JENKINS