Meeting Europe
24 March 2017
Editorial
Free trade brings welfare
Disappointment, frustration and even anger has taken hold of many citizens in our Western welfare states. Because progress has not brought any progress to them, and because globalization has pushed them into a corner where they are bearing the brunt. Anyway, that is what they think.
Filip De Jaeger and Fa Quix
Summary » Brexit is a challenge of the 1st order for the Belgian textile, woodworking and furniture industries. A trade-friendly Brexit has to avoid chaos
2
» The European Timber Regulation (EUTR) Fedustria supports the demand for an enlargement of its scope 3
» CMR restriction proposal for textiles Some steps in the right direction ... but additional modifications are necessary
3
» New Skills Agenda for Europe …. Also for companies?
4
» Mandatory labelling of furniture in France Discrimination and confusion everywhere!
4
Fedustria is the Belgian federation of the textile, woodworking and furniture industries.
In Belgium, we represent approximately 1,870 companies (of which more than 90 % are SMEs) that jointly create approximately 38,370 direct employment opportunities, and who achieve a turnover of 11.2 billion euros, of which approx. 70 % in export. The textile industry, which consists of approximately 640 companies and some 19,600 employees, is good for a turnover of about 5.9 billion euros. Woodworking and furniture companies achieve a turnover of 5.3 billion euros, providing work to 18,735 employees in 1,234 company sites.
It cannot be denied that the (lower) middle class has not been able to reap the benefits of free trade sufficiently. However, globalization is not the most important cause of this, but rather the policies that have been made. And that is why these forgotten groups of our society are turning against the so-called ‘establishment’, out of protest, even if they all too often realize themselves that their recourse to populism will not bring a solution. Quite to the contrary, their condition will frequently even worsen. Because what can the weaker groups in society expect from isolationism and protectionism? Giving up free trade and turning back globalization is therefore not the right answer. Because free trade does bring welfare. It increases the living standard of all the involved, to the extent that policymakers do not forget to distribute the benefits of free trade fairly. And this also includes those who threaten to remain behind because of globalization - they, too, must be supported. And the effects of ‘digitalization’ may also not be forgotten in this regard. That demands an inclusive policy. To say it with the words of Dani Rodrik, a top economist of the American Harvard University: ‘We have to combat hyper-globalization in order to save globalization’. Fa Quix, general manager, and Filip De Jaeger, deputy general manager
Fedustria - Meeting Europe
24 March 2017
Brexit is a challenge of the 1st order for the Belgian textile, woodworking and furniture industries.
A trade-friendly Brexit has to avoid chaos
The UK is an important ex- Share of the UK in the export of the Belgian textile, woodworking and furniture inport market for the Belgian dustries per segment, and the growth of exports to the UK per segment. textile, woodworking and Growth of exports to UK furniture industries. In 2015, UK market % UK (2) 2013-2015 9m’16/’15 more than 1.4 billion euros +8,8 % -12,7 % 10 % (1) Not top 5 2 à 3 % of Belgian textile products CLOTHING TEXTILES were sold on the British TECHNICAL TEXTILES 40 % +3,8 % -10,2 % 4th market 3 à 5 % market, which makes it the +27,0 % +2,4 % INTERIOR TEXTILES 50 % Top market >30 % 3rd most important export rd 100 % 12 % +18,4 % +0,9 % 3 market market. Deliveries have 7% +57,2 % -3,4 % 55 % (1) 4th market been increasing steadily in WOODWORKING th the last years: +10.8 % in FURNITURE & 3% +11,2 % -3,1 % 4 market 2014 and +6.9 % in 2015. SEATING FURNITURE 45 % During the first 9 months 100 % 5% +42,5 % -3,3 % 4th market of 2016, the growth of tex(1) Share of each segment in the total textile or woodworking & furniture industries tile deliveries to the UK (2) Share of the UK in the total export of the segment came to a near standstill (+0,9%). The delivery of Belgian woodworking products and furniture to the UK amounted to 175 million euros in 2015. Britain is the 4th most important customer of the Belgian woodworking and furniture industries. In 2014 and 2015, exports to the UK grew strongly, respectively increasing by 22.1 % and 16.7 %. However, during the first 9 months of 2016, the delivery of woodworking products and furniture to the British market declined by 3.3 %. Britain is the top market, for the most important segment of the Belgian textile industry, namely interior textiles (broadloom carpets, carpets, furniture and decoration textiles, mattress ticking and household textiles), with an export share of more than 30 %. During the first 6 months of 2016, deliveries of interior textiles to the UK still increased. But in the 3rd quarter, this suddenly changed into a decline, mainly as a consequence of the fall of the British Pound after the Brexit referendum. The sharp decline of the Pound puts pressure on the margins of the Belgian textile companies, and it made their products noticeably more expensive for British consumers, the consequence of which was a decline in volume. The sector of interior textiles is therefore being hit hardest by the Brexit. On top of this still comes the indirect impact for the spinning mills and the finishing companies, who make deliveries to the interior textile sector. And problems will increase in the medium and long-term, there where a short-term decline in the value of the Pound has the most important impact on price and competitiveness. In the medium-long term, between now and the effective start of the Brexit (in principle within two years), the decline in the value of the British Pound will lead to imported inflation, which leads to a decline in the purchasing power of British consumer expenditures. Insecurity will keep on increasing, to the extent that this period progresses in the direction of an effective Brexit, especially if it is not clear what the new trading relationship will be. And in the long term, namely when the Brexit finally comes into effect and the UK has definitely seceded from the EU, the question will be what the new trading relationship will be between the UK and the EU. Fedustria advocates a ‘soft Brexit’. The negative consequences in the long term must be limited, by the conclusion of a new trade agreement between the EU and the UK, which is as trade-friendly as possible. In this regard, reciprocal import tariffs and customs formalities, non-tariff barriers (especially different standards and testing methods) and administrative red tape, have to be avoided to a maximum.
2
sylvie.groeninck@fedustria.be
Fedustria - Meeting Europe
A few European core figures
The European Timber Regulation (EUTR)
Fedustria supports the demand for an enlargement of its scope It is meanwhile 4 years ago that the European Timber Regulation (EUTR) came into effect. The objective of the EUTR is to control supply of illegally harvested timber on the European market. Under ‘illegal’ is understood timber, which is harvested, transported, bought or sold, in violation of the national legislation in the country of origin.
24 March 2017
The textile, woodworking and furniture industries are an important source of welfare and employment in Europe. A few striking figures: (figures for the EU-28)
Textile and clothing
Wood and furniture
Turnover (in billions of euro)
1692
2272
Employment
1.692
1.952
Export outside the EU
44.71
25.53
(in millions of persons) (in billions of euros) 1
Estimate for 2016
Sources: Euratex and CEI-Bois.
² 2015 In the period 2015 - 2016, the effectiveness of the EUTR was ³ 2014 evaluated for the first time by the European Commission. One of the results of this evaluation states that the scope of the EUTR is still rather limited. When converted into a value, only 33 % of wood-related products available on the European market are covered by the EUTR. Expressed in volume, approximately 86 % of the products that may contain wood, fall under the scope of the EUTR (figures of WWF). Several examples of product groups that are still excluded from the European Timber Regulation concern, amongst others, music instruments, coffins, seating furniture that contains wood, printed matter, etc. With the signature of the ‘industry statement’, The European Commission will investigate, to what extent an which was launched by WWF at the end of 2015, adaptation of the scope of the EUTR is desirable and what the Fedustria already indicated that it supports an exbest manner is to implement this. This process is to be started pansion of the scope of the EUTR. The battle up as of the third quarter of 2017. against illegal timber production can only succeed, if the EUTR is applicable to all types of ingrid.hontis@fedustria.be wood-based products.
CMR restriction proposal for textiles
Some steps in the right direction ...
but additional modifications are necessary The European Commission is currently working on a restriction proposal for CMR substances in textiles and clothing within the scope of REACH legislation. CMR substances are carcinogenic, mutagenic and reprotoxic substances. The proposal of the Commission includes a restriction of CMR substances, in clothing and textiles for consumer use. In the first instance this is intended for clothing and textiles with prolonged contact with the skin, such as towels, bed linen, upholstery, etc. The current proposal contains a list of some fifty CMR substances, the documented limit values of which may not be exceeded. Fedustria values it highly that the European Commission has duly taken into account the comments, which were made in the name of the textile sector and expressed during the public consultation. Originally, more than 280 substances had been included, whereby all textiles were targeted, independent of whether there was contact with the skin or not. Nevertheless, there still are a number of important points of attention that have to be handled, before this restriction can be adopted. For instance, it
has to be clearly defined, what is understood under “long-term and direct skin contact”. Limit values need to be differentiated for specific product groups, such as for instance upholstery fabrics, so that these can continue to meet the imposed restrictions, for instance with regard to fire safety. Furthermore, a duplication of regulations has to be avoided. Substances that are already covered by another existing restriction (such as certain AZO dyes) do not have to be included once more.
bruno.eggermont@fedustria.be
3
Fedustria - Meeting Europe
24 March 2017
New Skills Agenda for Europe
….
Also for companies?
About 65 million European citizens do not have a sufficiently high education. Furthermore, employers in the European Union are finding too few qualified workers. Also the Belgian textile, woodworking and furniture industries are experiencing difficulties in finding well-trained personnel. It is therefore good that Europe, through the New Skills Agenda, is calling for more investments in digital and technical competencies, and in the language skills of all EU citizens. The European Commission expects that its member states reorient the resources that are put at their disposal. At the present time, though, it is not self-evident for our companies to gain access to these resources. Nevertheless, our companies make substantial investments to strengthen the competencies of their employees. Thanks to their work experience, and because many employees use the learning opportunities that are presented to them, they stand at a higher qualification level than at the start of their professional career. Learning and gaining additional professional qualifications in companies should be supported more strongly, especially since this remedies for the number of students coming from the educational system without a qualification. The European Commission would be advised to closely monitor that the foreseen resources to the member states actually benefit the companies themselves. In the end, it is these very companies that ensure welfare, something that benefits the entire European Union.
wim.vangoethem@fedustria.be
Exhibition “Plain / Purl – Textile between Art & Design” From 31 March until 1 October 2017, Design Museum Ghent
© Tapa Daybed, Chevalier Masson in collaboration with Erwin De Muer 2015 - Photo: Ivan Guerdon
The differentiation between textiles, modern design and art are becoming more vague. At this experiential exhibition, in celebration of the 10th anniversary of the degree-course textile design, which was held at the KASK/School of Arts, you will discover artworks, designs and drawings of nationally and internationally known names, such as Franz West, Sonia Delaunay, Rosemarie Trockel, Hella Jongerius, Rinus Van De Velde, Louise Bourgeois, Polly Apfelbaum, Bertjan Pot, Chevalier-Masson and alumni. Info: www.designmuseumgent.be/ en/events/plain-purl
4
Fedustria, Non-profit organisation Rue Montoyer 24, b1 B-1000 Brussels T + 02 528 58 11 www.fedustria.be
Mandatory labelling of furniture in France
Discrimination and confusion everywhere!
France has proposed legislation on the labelling of furniture that is being sold in the French market. This labelling is only based on the release of formaldehyde by furniture, which is intended for indoor use and in which wood-based panels are used. The proposed legislation is a barrier to the internal market, and it discriminates against furniture in which wood-based panels are used. Only these pieces of furniture have to be subjected to expensive emission tests, which leads to a competitive disadvantage. The difference between the various classes is smaller than the differentiating capacity of the testing method. This makes the assignment of a correct class arbitrary. The proposed classification is incompatible with that of construction products and the eco-label. For instance, construction Class A+ (lowest emission) is equivalent to Class C for furniture (highest emission). Furniture that carries the eco-label, namely classified as having low emissions, can be assigned to the high-emissions Class C. In a unified Europe, it should not be possible for member states to impose their own labelling and classification rules. It is impossible for manufacturers to provide furniture with a special label for each member state, and to subject them to specific emission tests. Wood-based panels, which fulfil the E1 emission standard, are safe for use. It would be much better if a European prohibition would be imposed on the use of wood-based panels with higher emissions, such as for instance in E2 furniture, and also on the import of furniture on the basis of E2.
piet.vanthournout@fedustria.be
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.