Meeting Europe
April 13, 2015
Editorial
Free trade: for more
prosperity
Fa Quix and Filip De Jaeger
Summary » China and market economy status
Please make a decision based on facts
» Circular economy Some examples
» REACH
An uneven fight?
2 2 3
» Internal market
Unity through diversity, also for construction products
» Paneuromed rules of origin
Enhance textile production in the EU
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» BRef wood-based panels
A technical document without technical relevance
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Fedustria is the federation of the Belgian textile, woodworking and furniture industries.
We represent about 1,950 companies in Belgium (of which over 90 % are SMEs), together creating over 39,200 direct jobs and generating a turnover of 10.7 billion Euros, of which 70 % is derived from export. The textile industry represents a turnover of 5.7 billion Euros with about 680 companies and some 20,150 employees. The woodworking and furniture companies generate a turnover of 5 billion Euros and employ about 19,000 employees in 1,286 companies.
As the multilateral free trade negotiations within the framework of the World Trade Organization stall, the bilateral free trade talks are on the up. By far the most significant agreement currently being negotiated is the one between the EU and the United States. The two greatest trading blocs in the world, so there is much at stake for both of them. It is therefore of the utmost importance that these discussions with a view to conclude a Transatlantic Trade and Investment Partnership, or TTIP, are carefully prepared and that the mutual interests are taken into account. The objective in itself should not be questioned. More free trade has always led to more prosperity. The idea is to distribute this increase in prosperity in a sufficiently fair manner, but this is part of the internal responsibility of the involved countries themselves. Anyone opposing the principle of the free trade agreement between the EU and the US also opposes one of the cornerstones of our society: the market economy. Although the latter is corrected (socially and ecologically), and rightly so, it is still based on the principles of the market. No prosperity without free market economy. These times of economic crisis leave us with no great abundance of growth and jobs. Consequently, to assume a negative attitude towards free trade cannot be justified economically or socially. The existing issues must be tackled and a balanced resolution must be found. However, the cornerstone itself, the usefulness of a free trade agreement, is not to be questioned. Fa Quix, general manager, and Filip De Jaeger, deputy general manager
Fedustria-Meeting Europe
April 13, 2015
China and market economy status
Please make a decision based on facts
Dumping is the sale of a product in third markets for a price which is lower than the normal value of the product in the exporting country. When the goods originate from a country with a market economy, the normal value is determined on the basis of the prevailing prices and production costs within the country in question. This is impossible in countries without market economy as the local prices and costs are not in line with the market due to all manner of government intervention. This is why they use those from another, comparable country that does have a market economy.
elizabeth.dewandeler@fedustria.be
China’s accession protocol to the World Trade Organization expressly acknowledges the right of the European Union to treat China as a nonmarket economy within the purview of anti-dumping investigations, and to do so as long as the country fails to meet the EU’s criteria for the obtainment of market economy status. As China currently does not meet the five European conditions, there is no question (yet) of granting this status. To do so anyway would have a disastrous impact on European industry and employment. Indeed, in such a case the EU would constantly have to use local Chinese prices and costs as the basis for determin-
ing the normal value of the product, which are artificially low due to all manner of interventions by the Chinese government in the economy. Because of this, the export price will no longer be (much) lower than the Chinese production cost, and the observed dumping will be greatly decreased or even non-existent. In other words, granting China market economy status would make it more difficult to prove dumping, while in reality nothing has changed and the magnitude of the problem has not decreased. It is obvious that only anti-dumping measures based on the true level of the dumping lead to the recovery of a level playing field.
Circular economy
Some examples Since the announcement by the European Commission that the circular economy package, a proposal launched still by the Barroso administration, would be axed, the discussion on circular economy has never been stronger. In spite of the criticism the original proposals gave rise to, industrial sectors and individual companies are more and more applying the circular economy principle. For the woodworking sector, e.g. the principle is inherent to its operations, working as much as possible within a closed carbon loop whereby wood raw material (the logs from forests e.g.) is first transformed into products, goes through one or several phase(s) of re-use or recycling (in wood panels e.g.) prior to being used as a source of renewable energy, thereby limiting waste and landfill to an absolute minimum. But the principle also extends to the other Fedustria subsectors textiles and furniture. Products are more and more
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filip.de.jaeger@fedustria.be
often designed and produced in such a way that they are fit for re-use and recycling, sometimes fuelled by legislative measures imposing an “extended producers’ liability” which obliges manufacturers and suppliers to take back the products they put on the market. A good example of this development are mattresses, where several manufacturers have already invested strongly in the design and production of so-called circular mattresses. Whatever the decision of the European Commission on the issue will be, the circular economy is definitely a reality already.
Fedustria-Meeting Europe
REACH
An uneven fight?
April 13, 2015
Selected key European figures The textile, woodworking and furniture industries are a major source of prosperity and employment in Europe. Here are a few telling figures:
REACH ensures that substances presenting an unacceptable (Figures for the EU-28) Textile and Woodworking risk to public health and the environment may no longer be proclothing and furniture duced, used, and imported in Europe. However, in the case of Turnover (in billion €) 161.51 209.22 substances necessary to the production process, the European Employment (people) 1,659,2121 1,944,6381 industry is unduly disadvantaged compared to non-European industry. At best, authorization is granted allowing the subExport out of EU (in billion €) 43.0³ 24.951 stance to be used in Europe after all. However, authorization 1 2013 is costly and temporary by definition, usually making this option ² 2012 an unviable one. When no authorization is granted, continuation ³ 2014 Source: Euratex and CEI-Bois of the production process in the EU is excluded if there is no alternative for the substance in question. As a consequence, production is moved to non-EU countries where usage of the substance is still allowed. Subsequently, the finished products are exported to the EU. The end result is a reduction in industrial production and employment in Europe, and zero ecological benefit. Though the intentions behind REACH may be noble, the textile, woodworking and furniture companies are doubly disadvantaged. Firstly, REACH generates a great deal of extra costs (e.g. studies, substitution, higher prices for chemicals…) resulting in a cost disadvantage compared to non-European companies. Secondly, our companies are once more at a disadvantage due to the many goods be
ing imported into the European Union in an uncontrolled manner, whereby it is unclear to what extent these goods are in accordance with REACH. Therefore, Fedustria asks for more efforts from Europe in safeguarding a level playing field when it comes to REACH, with specific attention to import.
bruno.eggermont@fedustria.be
Internal market
Unity through diversity, also for construction products Each Member State of the EU may impose its own demands regarding construction products. However, producers must have the possibility of using European standards to demonstrate that their construction products meet those demands. This principle is the essence of the Construction Products Regulation.
However, this is not how Germany understood it. According to the German “Länder”, the European standards presented some gaps for certain construction products. This is why these products could only enter the German market if they were subjected to an additional evaluation, expressed with a label (the Ü-Zeichen, with the ü from “Übereinstimmungserklärung” or declaration of conformity). The European Court of Justice ruled in October 2014 that this is unacceptable. If a Member State feels that the existing standards are no good, so states the Court, then action must be taken at the European level to change these standards. The unilateral introduction of special rules and labels is not allowed.
jan.dietvorst@fedustria.be
Fedustria is glad that Europe does not shy away from correcting larger Member States as well when they make a mockery of the European single market. The Commission is to remain vigilant to ensure that construction products evaluated according to European regulations and therefore bearing a CE mark, are accepted everywhere in the EU when evaluation demonstrates that the local technical demands are met. The Commission must also ensure that the Member States do not replace the eliminated technical barriers with others, such as specific national evaluation systems for the environmental friendliness of construction products.
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Fedustria-Meeting Europe
April 13, 2015
Paneuromed rules of origin
Enhance textile production in the EU The European Commission is currently negotiating with the EFTA countries, Mediterranean countries and the Balkans a reform of the preferential rules of origin for the Paneuromed zone.
EURATEX made a proposal whereby a double transformation is typically still required. In addition to the traditional double transformations such as spinning and weaving, another possibility would be weaving and dyeing for instance. The Commission is also evaluating whether the current diagonal cumulation can be replaced by a general full cumulation, possibly with duty drawback (waiver of import duties on non-originating materials). Full cumulation implies that the double transformation (e.g. weaving and dyeing) may be performed in two countries of the zone as opposed to in a single country (whereby the EU is seen as a single country) as is currently the case with diagonal cumulation. Therefore, in case of full cumulation Chinese yarn could be weaved in Turkey, these fabrics could then be dyed in Morocco and made up in Tunisia, allowing the clothing to be imported into the EU without import duties.
sylvie.groeninck@fedustria.be
Exhibition “Rubens in private. The master portrays his family” Until 28 June 2015, The Rubens House, Antwerp Artistic mastery in the Low Countries was unparalleled as early as the 17th century. Rembrandt, but also Peter Paul Rubens were eminent masters of the arts. Magnificently dressed figures and draped interiors featured in portraits and depictions of various scenes of the time bear witness to the textile mastery already present in that age. Info: www.rubenshuis.be Fedustria, Non-profit organisation Rue Montoyer 24, b1 B-1000 Brussels T + 02 528 58 11 www.fedustria.be
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Peter Paul Rubens, ‘Self-portrait in a Circle of Friends from Mantua’, approx. 1602-1604, oil on canvas, 78 x 101 cm. Cologne, Wallraf-Richartz Museum, inv. no. Dep 248. © Rheinisches Bildarchiv, WallrafRichartz-Museum & Fondation Corboud, Köln, Loan of the Federal Republic of Germany
The modified double transformations will already give much more flexibility, but with the objective of keeping textile production in the EU and even enhance it. Additional amendments are unacceptable for Fedustria and Eurocoton, as is full cumulation considering that - as is apparent from the example - this would sideline EU producers.
BRef wood-based panels
A technical document without technical relevance
The European Commission is bound to approve a BRef for wood-based panels in mid-2015. This defines the emission values for the production of panel materials, taking into account the best available techniques. When this document was being drafted however, it became apparent that time was more important than quality. A cacophony of data yielded unrealistic emission thresholds, which are linked to the top performing technology instead of the best available technology. It seems forgotten that panels are mainly made from wood, and that this wood is purchased in the region where the companies are located. 90 % of formaldehyde and VOC emissions originate from the wood itself and they depend moreover on the type of wood used. It is therefore only logical that there are geographical differences. The energy balance of a wood dryer depends on the climate in which the wood is being stored. Humid or cold regions consume more energy to dry the wood, consequently they have higher emissions. Fedustria demands that these standards be modified to reflect the technique used. At present, all Member States look at the emissions generated by their companies, forgetting the principle of geographic diversity and the binding nature of this BRef. Additionally, Fedustria strives towards a harmonization of the measuring methodology. An emission threshold without measuring methodology is worthless.
Publisher: J.F. Quix Allée Hof-ter-Vleest 5 b1 B-1070 Brussels
piet.vanthournout@fedustria.be
Copyright Fedustria: Fedustria members may use the information included in this newsletter as they wish; any third parties are requested always to mention the source of the information.
Note CEI-Bois: the European Confederation of woodworking industries, www.cei-bois.org; Euratex: the European apparel and textile confederation, www.euratex.eu; Eurocoton: European Cotton and Allied textiles Federation.