Meeting Europe

This is the latest edition of the European Newsletter of Fedustria − the professional organisation for the Belgian textile, wood and furniture industry. The aim of this newsletter is to give you a brief overview of the specific main concerns of our industry sectors. For more information on each theme, you can always contact us by e-mail (see respective addresses under each article).

Summary We need to protect our internal market from unethical imports 2 Level playing field necessary within Europe 2 No export of tree trunks without first processing in the EU 3 Uniform use of customs commodity codes for timber products across the EU 3 Combating illegal timber imports: our companies are your partner for a single European approach 4 Brexit: make the inevitable as smooth as possible 4

November 2019

The internal market is the most important free trade agreement The European internal market is the most important free trade agreement in the world ... but it has not yet been completed. The internal market has been, and still is, a tremendous driver of economic development and prosperity in the EU. The free movement of goods and services results in efficiency gains and best choices for consumers. But this internal market is incomplete. Moreover, some Member States are trying to create new barriers to restrict access to their markets for companies from other EU Member Statess. One example among many: the European Construction Products Regulation, which, with its compulsory CE marking based on harmonised standards, ensures European uniformity. However, some Member States, such as Germany, want to replace this system with a system of mutual recognition, and introduce additional (deviating) requirements. This would be a major step backwards and undermine the single market.  elizabeth.dewandeler@fedustria.be

Climate: using more wood results in less CO2 and more oxygen Use wood, because … wood provides oxygen!

In Belgium, we represent approximately 1,800 companies (of which more than 90 % are SMEs) that jointly create approximately 38,000 direct employment opportunities, and who achieve a turnover of 9.6 billion euros, of which approx. 70 % in export. The textile industry, which consists of approximately 630 companies and some 19,700 employees, is good for a turnover of about 4.4 billion euros. Woodworking and furniture companies achieve a turnover of 5.2 billion euros, providing work to 18,400 employees in 1,180 company sites. In addition, Fedustria also represents the timber import trade (approx. 40 companies) with a turnover of approx. 700 million euros.

Fedustria is the Belgian federation of the textile, woodworking and furniture industries.

The wood and furniture sector is a leading sector in terms of the circular economy. In addition, wood is a carbon sink: the CO2 in the air is absorbed by trees. The carbon (C) remains in the wood and the oxygen (O2) is released. So the more wood we use, the better for the climate!  ingrid.hontis@fedustria.be

Fedustria-Meeting Europe

November 2019

We need to protect our internal market from unethical imports The European Chemical legislation REACH imposes strict obligations on users of chemical substances, among other things. The aim of REACH is to phase out the use of certain chemical substances in Europe, unless an explicit authorisation − limited in time − is issued in this regard. On the other hand, the use of various chemicals is subject to restrictions. European companies therefore need to make every effort to find environmentally-friendly alternatives to these substances of very high concern. This is often a time-consuming and expensive process.

A few European core figures 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)

178

219

Employment (in millions of persons)

1.7

2.0

Export outside the EU (in billions of euros)

Estimate for 2018 Sources: Euratex, CEI-Bois and EFIC

Despite the fact that the REACH stipulations also apply to imported goods, it is the case, unfortunately, that products that do not comply with REACH can still be placed on the European market. Not only is this a danger to the health and safety of European citizens, it also leads to unfair competition with European producers. Stricter controls of goods imported into the EU need to be enforced, in order to ensure that these also comply with European Chemical legislation (REACH).  bruno.eggermont@fedustria.be, piet.vanthournout@fedustria.be

Free trade agreements, yes, but balanced and with reciprocity Fedustria is an advocate of more free trade through bilateral free trade agreements, on condition that they are concluded with ‘equal’ partners, so that these agreements are indeed a winwin situation. Furthermore, Fedustria draws attention to the following sector-specific issues: • greater reciprocity (the European market is already very open, while our companies are still confronted with high import duties or closed markets, e.g. for public procurement in some third countries); • the respect of core labour standards (ILO) on the ground must be more enforceable; • taking vigorous action against unfair trading practices such as dumping and counterfeiting; • rules of origin for the textile sector which seek to keep the entire textile chain in Europe as much as possible.  elizabeth.dewandeler@fedustria.be

Level playing field necessary within Europe The customs union between the EU and Turkey is skewed in favour of Turkey: Turkey has access to our 500 million EU citizens, with our significant purchasing power, while the advantage for EU companies in Turkey, with a population of 80 million, is limited. In addition, Turkey plays by other rules, for example in the area of subsidising companies and sectors. Even within the EU itself, there is not always a level playing field. For example, the (furniture) industry in certain Eastern and Southern European countries benefits from additional subsidy possibilities, whereby investments in these countries are much cheaper than those in the (furniture) industry in Belgium and in other EU Member States. This distorts competition to the detriment of our companies. These extra subsidy possibilities in those countries must be eliminated as rapidly as possible.  fa.quix@fedustria.be

Construction Products: CE marking ensures European uniformity The CE mark ensures that a product meets a range of essential requirements. It is like a passport to the internal market. The European Construction Products Regulation has already ensured that various building materials are CE-marked. Fedustria continues to insist on this CE marking as the only requirement in the single European market. For standard doors and fire-resistant interior doors, the product standard must be published as quickly as possible, in order to proceed to CE marking.  piet.vanthournout@fedustria.be

Fedustria-Meeting Europe

November 2019

No export of tree trunks without first processing in the EU

Access to raw materials is an ever growing challenge

In recent years, increasing volumes of roundwood have been transported from Belgium and Europe to Asian countries, where it is processed into semi-finished or finished products that often find their way back to Europe to be sold here at low prices. This poses a double problem for Belgian and European wood companies: not only do they lack the necessary (timber) raw materials, but there is also fiercer competition on the markets.

Textile dyes: investigation into China’s market-distorting behaviour

As such, we are advocates for European measures to ensure that roundwood cannot be exported without first processing. Not only will this benefit employment in Europe, it will also benefit the availability of raw materials for further processing. At the same time, this will result in a lower CO2-footprint due to a reduction in unnecessary transport.  ingrid.hontis@fedustria.be, filip.dejaeger@fedustria.be

Uniform use of customs commodity codes for timber products across the EU Even regarding the use of customs commodity codes, there is still no unified Europe. Not all EU Member States use the same customs commodity codes for the same products that are imported, resulting in different import tariffs! There is a need for uniform application of the customs commodity codes in all Member States. It is not acceptable for certain products to be subject to customs duties when imported into Belgium, while the exact same products are exempted from import duties in neighbouring countries on the basis of the same European regulations.  ingrid.hontis@fedustria.be, filip.dejaeger@fedustria.be

Belgium and France together account for 85% of the total export of 685,000 tonnes of oak tree trunks to China. In addition, Belgium exports 15% of all beech trunks to China (666,000 tonnes in total). As a result, various roundwood-processing companies here have already been forced to scale back or cease their activities, with consequences for employment in the sector.

By definition, the industry cannot function without raw materials. But for various industries, it is becoming increasingly difficult, for various reasons, to get access to these raw materials, let alone for an affordable price.

The constant sharp rises in the prices of dyes for the textile industry in Belgium and Europe are the result of China’s decades-long strategy to conquer the market: dumping practices were used in the first instance to push European competitors out of the market or force them to relocate to China. China subsequently achieved a quasi-monopoly situation in the world, whereby Western customers are at the mercy of Chinese supply and price dictates. Fedustria and Euratex call on the European Commission to thoroughly investigate this market-distorting situation.  bruno.eggermont@fedustria.be

Fedustria-Meeting Europe

November 2019

Combating illegal timber imports: our companies are your partner for a single European approach The follow-up of the European Timber Regulation (EUTR), which aims to restrict the trade in illegal timber and timber products on the European market, remains an important topic. An essential element in this regard is the exchange of information and cooperation with relevant stakeholders, to work towards a better and uniform implementation of these regulations. Fedustria remains an advocate of more controls on the ground. Provided that it is clear what the government actually expects from companies. The lack of clear guidelines within the EUTR means that each member state has interpreted them in their own way. Fedustria calls for a level playing field and is also in favour of extending the scope of the EUTR to all wood products.  ingrid.hontis@fedustria.be, filip.dejae-

ger@fedustria.be

Brexit: make the inevitable as smooth as possible The Belgian textile industry believes that there are no positives when it comes to Brexit. It is a ‘lose-lose’ situation, and the British will likely be the biggest losers. The British will notice the difference, to their detriment, once they have actually left the EU, even with a deal. Nonetheless, it is important to focus already on the EU’s future relationship with the UK. This should ideally be as broad and deep as possible, and should at least meet the following requirements, in Fedustria’s opinion: • the future relationship should ideally take the form of a customs union. In any case, efforts must be made to ensure that import duties are not levied on each other’s goods and that, if necessary, suitable rules of origin are agreed upon. An important aspect in this regard is that the UK does not become a gateway for goods from third countries that without having been subject to import duties end up on the EU-27 market , whereas customs duties would have been levied on those products if they had been imported directly into the EU-27; • minimal, but efficient, customs formalities and rapid customs clearance so that the advantage of proximity can be maintained as much as possible; • a level playing field in the area of state aid, REACH, etc.; • that, as far as possible, the same product norms and standards as well as test methods should be maintained; • that Belgian/European companies would continue to have access to the UK public procurement market.  elizabeth.dewandeler@fedustria.be, sylvie.groeninck@fedustria.be

Focus on the wood and furniture sector within the new European Commission Fedustria fully supports the call from the European umbrella organisations CEI-Bois (European Confederation of Woodworking Industries) and EFIC (European Furniture Industries Confederation) to appoint a specific contact person for the wood and furniture industry within the office of the new Commissioner for the Internal Market, Industry, Entrepreneurship and SMEs (DG GROW).  filip.dejaeger@fedustria.be Fedustria, Non-profit organisation Rue Montoyer 24, b1 B-1000 Brussels T + 02 528 58 11 www.fedustria.be

Implementation of the New Skills Agenda In implementation of the European Commission’s New Skills Agenda, the textile, clothing, leather and footwear sectors have set up a European cooperation framework on training policy. Eight training profiles have been selected, for which learning modules are currently being developed. The sectoral training centre Cobot is drafting the modules for ‘textile technologist’ and ‘digital marketing professional’. For wood and furniture, a Sector Skills Alliance has been set up to assess the impact of the digital transformation in the furniture sector by 2025. The Woodwize sectoral training centre has been involved in estimating this transition for 11 relevant functions. Following on from this, a new professional profile for ‘digital transformation manager’ is being developed.  wim.vangoethem@fedustria.be

Publisher: J.F. Quix Allée Hof-ter-Vleest 5 b1 B-1070 Brussels

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: European Confederation of Woodworking Industries, www.cei-bois.org; Efic: European Furniture Industries Confederation, www.efic.eu; Euratex: European Apparel and Textile Confederation, www.euratex.eu.