Meeting Europe
April 2016
Editorial
Yes to European standards. No to goldplating.
The internal market is about more than just free access to each other’s markets within the EU, without customs duties or trade barriers.
Fa Quix and Filip De Jaeger
Summary » China and market economy status Dumping must be addressed effectively
» Biocidal Products Regulation
Detrimental to European companies
» Circular economy
Promoting the use of wood!
» Posting of Workers Directive Equal pay for equal work?
2 2 3 3
» Reciprocity in public procurement
No improvement in sight for the textile sector 4
» Sustainability criteria for wood Cascading is the basis
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Fedustria is the Belgian federation of the textile, woodworking and furniture industries.
We represent around 1,915 companies in Belgium (of which more than 90 % are SMEs). Among them they create some 40,000 direct jobs and have a turnover of € 11.2 billion, of which c. 70 % comes from export. The textile industry accounts for a turnover of € 6.1 billion, with c. 670 companies and around 19,700 employees. Woodworking and furniture companies generate a turnover of € 5.1 billion and employ around 18,750 staff at 1,246 workplaces.
It is also about harmonised norms and standards. For what is the use of free access if each market uses different product or testing standards? If that were the case, separate products would have to be made for each market, or else each product would have to be subjected to several tests and/ or certificates. This would mean that the economies of scale represented by the single market would be lost. A true internal market thus presupposes clear European-wide standards. That is a process with which the Belgian (and European) textile, wood and furniture industries cooperate actively, e.g., within the working groups of CEN, the European Committee for Standardization, and the national standards bodies. Governments seem increasingly to take the view, however, that European standards are only a sort of ‘Olympic minimum’ above which they must by definition stand out, through so-called ‘goldplating’. By imposing additional requirements, separate standards are established, often with a view to protect the market, but which eliminate the advantages of an internal market regulated by harmonised norms and standards. A true internal market presupposes no more nor less than generally accepted and consistent European standards. Yes to European standards. No to goldplating. Fa Quix, general manager Filip De Jaeger, deputy general manager
Fedustria - Meeting Europe
April 2016
China and market economy status
Dumping must be addressed effectively
Dumping means selling a product on foreign markets at a price that is lower than the normal value of the good in the exporting country. If the goods originate from a country with a market economy, the normal value is determined on the basis of the domestic prices and production costs in that country. In countries without a market economy, this is not possible given that local prices and costs do not reflect market conditions as a result of various state interventions. For this reason, the EU currently uses the prices of an analogue country that does have a market economy. This is e.g. the case for China. But if a Chinese producer can demonstrate that it does produce and sell a good under market conditions, the EU will in that particular case use the producer’s prices and costs to determine the normal value of the good. The Chinese Accession Protocol to the World Trade Organization recognizes explicitly the right of the European Union to treat China, for purposes of anti-dumping investigations, as a non-market economy. This will continue to be the case as long as the country does not meet the European criteria for obtaining market economy status. Considering that China does not currently meet the five criteria, it cannot (yet) be granted that status. To do so would have a devastating effect on European industry and jobs. The EU would in that case have to take local Chinese prices and costs as the basis for determining the normal price of a good, although these are kept artificially low by various forms of intervention in the
economy by the Chinese state. This would mean that the export price would no longer be (much) lower than the Chinese production costs and the observed dumping will be greatly decreased or even non-existent. In other words, if the Chinese prices and costs were used, it would be more difficult to prove dumping, even though in reality nothing would have changed and the problem of dumping would still be as great (with or without additional ‘mitigating’ measures such as those proposed by the European Commission). It goes without saying that only those anti-dumping measures that are based on the true extent of dumping can lead to a restoration of a level playing-field.
elizabeth.dewandeler@fedustria.be
Biocidal Products Regulation
Detrimental to European companies
Products treated with biocides that come from non-EU countries may be placed on the market only if all active substances contained in these products have been approved in accordance with Biocidal Products Regulation 528/2012. But this requirement overlooks the fact that in Europe it is not only the active substances that must be approved, but also the biocidal product (preparation of the active substance with other chemical products); biocidal product that will be used to treat objects such as textiles or wood. Such an approval process contributes, of course, to protecting human beings and the environment.
Not only does this lead to potentially dangerous situations for the consumer, but companies also suffer disadvantages. The costs of obtaining an authorization are passed on to the sales price of the biocidal preparation. Non-European countries do not have to bear such costs.
This guarantee of safety does not, however, apply to all treated objects imported into Europe. It is true that the active substance must be approved in accordance with the Biocidal Products Regulation, but this is not necessary for the ultimate biocidal product with which an article will be treated. There is thus no guarantee at all that the biocidal product is in fact safe for humans and the environment. Nor are there any guarantees that the product is effective.
In order to protect public health and to create a level playing-field, it is essential that biocidal products present on or in imported goods also fulfil the same requirements as those applied in Europe. The requirement that only active substances that are compliant with the European Biocidal Products Regulation can be approved is completely insufficient in this regard. Such a requirement must also apply to the biocidal product as a whole.
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bruno.eggermont@fedustria.be
Fedustria - Meeting Europe
A few key European figures
Circular economy
Promoting the use of wood!
With its ‘circular economy package’, the European Commission signals that it wishes to make a firm commitment to working in closed loop. Fedustria sees significant opportunities in this package for its sectors, not least for the whole wood-processing sector, which has for many years been applying the principles of working in loops. Wood products are reused and recycled at the end of their life; only when the wood can no longer be used as a raw material for anything else can it be burned with energy recovery. This ‘cascading use of wood’ has been disrupted, however, in recent years by the enormous subsidies granted for burning the raw material wood, used as fuel. By opting for a circular economy, the European Commission is going for the sustainable use of this valuable resource. Fedustria welcomes the circular economy package and asks the European Commission: • To consider the economic function of forests, including taking measures for the mobilisation of wood and reforestation; • To take measures that promote a more thoroughly selective collection and sorting of wood waste, in order to further reuse and recycling; • To encourage the use of wood and wood products.
April 2016
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The textile, woodworking and furniture industries are an important source of well-being and employment in Europe. A few notable figures: (figures for the EU 28)
Textile and clothing1
Wood and furnture²
169
218,7
Employment (persons)
1.687.048
1.955.461
Export outside the EU
44,5
25,5
Turnover
(in billions of euros)
(in billions of euros) 1
²
estimates for 2015 2014
Source: Euratex and CEI-Bois.
Not only does this prevent the use of other − non-renewable − materials, but the carbon stored during the tree’s growth remains in the wood products throughout their life. By using more wood, more carbon is stored, and that is good for the climate; Finally, we note that renewable materials − such as wood − deserve particular attention in the circular economy, and deserve at least the same advantages as recycled materials.
ingrid.hontis@fedustria.be
Posting of Workers Directive
Equal pay for equal work?
On 8 March 2016 the European Commission approved a proposal for revision of the Posting of Workers Directive 96/71/EC. This European directive provides among other things that in the construction sector, when workers are posted from a member state to a host member state, a core set of terms and conditions of employment in the host member state is guaranteed to the workers, such as minimum rates of pay, maximum work periods and minimum paid annual holidays, whatever the law applicable to the employment contract. This directive was transposed in the Belgian Law of 5 March 2002. It uses a broader concept of remuneration and already provides for an Fedustria supports a European implementation of equal extension of the core set of terms and conditions pay for equal work for posted workers. But that in of employment to all sectors. The enforcement has itself is not enough to combat unfair competition and largely remained a dead letter, however, resulting social dumping. For this reason, the transposition (by in unfair competition. 18 June 2016) of Enforcement Directive 2014/67/EU The most important amendment proposed by the that contains measures for better enforcement, appliCommission is no longer just to guarantee the mincation and practical implementation of the EU rules on imum wage of the host member state, but also the the posting of workers is crucial. It is also important to other components of remuneration such as holiday ensure the right focus (cf. better access to information, pay, team bonuses and other bonuses, mobility rebetter collaboration among member states, etc.) and that imbursements, etc., and to do so in all economic Belgian companies are not once again burdened with sectors. additional draconic obligations.
kim.matthys@fedustria.be
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April 2016
Reciprocity in public procurement
No improvement in sight for the textile sector
While around 85 % of the European public procurement market is open to foreign bidders, in Japan this figure is only 28 % and in the US 32 %. The European Commission proposes that where a third country restricts European companies’ participation in public procurement processes, a price penalty may under certain conditions be applied to bidders, goods or services from that country when they bid for public contracts within the EU. In this way the Commission hopes to put pressure on that third country to open up its public procurement market to European bidders. Fedustria has long been arguing that market access should be based on reciprocity, and it is thus pleased that the Commission wishes to address the current imbalance. The specific proposal, however, will bring little improvement to the textile industry, among other things for the following reasons: • The price penalty would apply only to contracts with a value above EUR 5 million. This threshold is far too high, and the result will be that it can not be applied in tenders that are of importance to the textile sector. • No price penalty would be applied to tenders where more than 50 % of the total value of the tender consist of goods and services originating in least-developed countries or vulnerable developing countries, while in some of these countries the textile and apparel sectors are important. Furthermore, the requirement of “more than 50 %” is much too low: it means that 49 % (!) of the value of the tender can still originate in a country that is not among the least-developed or vulnerable developing countries. • Bidders will be able to attest the origin of the goods by means of a self-declaration. This opens the door to abuses. The bidder that is selected will have to provide more detailed information about the origin of the goods. But if it appears that the self-declaration was incorrect, it is too late, given that the contract will by then have been awarded.
elizabeth.dewandeler@fedustria.be
Fedustria, Non-profit organisation Rue Montoyer 24, b1 B-1000 Brussels T + 02 528 58 11 www.fedustria.be
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Sustainability criteria for wood
Cascading is the basis
On 10 February 2016, the European Commission launched a public consultation titled “Preparing a sustainable bioenergy policy for the period after 2020”, which ends on 10 May. The aim of this initiative is to develop on an improved biomass policy − with or without the development of sustainability criteria for solid biomass − that will be part of the renewable energy policy for the period after 2020. A positive aspect is that the consultation contains a section on the impact of the use of materials in other sectors, such as the wood industry. Fedustria stresses that the future biomass policy must be in line with the philosophy found in the circular economy package, meaning that a correct cascading use of wood must be the basis of future biomass policy. This is possible only by abolishing the subsidies for burning the raw material wood, used as fuel, as such subsidies are contrary to the principles of sustainable energy production. Only where the principles of cascading (use, reuse and recycling, burning) are followed can one speak of a sustainable biomass policy that contributes to a better climate, and that is precisely what Europe is striving for at the moment.
ingrid.hontis@fedustria.be
Belgian Fabrics. Great outfits! © BELGA PHOTO
Fedustria - Meeting Europe
Belgian fabrics are assured of participating in the Rio Olympics! At official events such as the opening ceremony, athletes and staff will wear clothing made of Belgian fabrics. The supplier of the clothing is Terre Bleue, which was responsible for both design and production. They chose to work with cotton fabrics by Uxtebel and linings from Concordia Textiles. The labels were provided by Nilorn.
Publisher: J.F. Quix Allée Hof-ter-Vleest 5 b1 B-1070 Brussels Coordinator: Elizabeth De Wandeler.
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.