After many years of continuous growth, Tunisia's garment and textile exports to the EU fell by 5.8% in 2005. Not surprisingly, Tunisian government and industry representatives believe the country could successfully compete with Asia if only the EU acted as a better Euromed partner. By Jozef De Coster.

On a visit to Paris at the beginning of May 2006, Tunisia's Prime Minister Mohamed Ghanouchi expressed disappointment with the results of the Association Agreement concluded between Tunisia and the EU in 1995.

He described the Association Agreement* as nothing more than a free trade deal, and called on the EU to develop a more ambitious vision on its partnership with the Mediterranean countries. In particular, he asked for help to improve the competitiveness of these countries' textile and clothing industries, which would in turn also bring benefits to the EU.

As for Tunisia, Mr Ghanouchi stressed that the textile and clothing sector, the backbone of the country's economy, could compete internationally if it was supported by closer cooperation with the EU.

EU garment imports
In 2005, EU garment imports were dominated by China (EUR16.8bn) and Turkey (EUR8.0bn). EU garment imports from four other countries exceeded EUR3bn - from Romania (EUR3.6bn), Bangladesh (EUR3.5bn), India and Tunisia (both EUR3.2bn).

However, while garment imports into the EU from China (+46.3%) and India (+30.2%) soared in 2005, and those from Turkey increased by a more modest 4.2%, those from all other big players, Tunisia included, showed a decrease.

In response, Cepex, the Tunisian Export Promotion Center, is launching a well-devised effort to support Tunisian garment exporters.

Ferid Tounsi, Cepex chairman and director general, outlined its plans in Brussels on 8 May, including enhancing the competitiveness of the sector, improving international marketing and looking for synergies between the EU and the Tunisian industry.

Tunisia is currently the sixth largest exporter of garments to the EU. Within this it is the EU's leading supplier of trousers (especially jeans), lingerie and workwear. It's also an important exporter to the EU of shirts, jackets and anoraks.

International marketing is certainly needed to reduce the over-dependence of Tunisian textile and garment exports on France (40% of exports in 2005) and Italy (25%). Other important customers are Germany (11%), Belgium (7%) and the UK (4%).

EU import statistics covering the first two months of 2006 show that textile and garment imports from the top three suppliers are continuing to increase: from China (+19.9% in Euros), from Turkey (+4.9%) and from India (+31.6%).

The fact that EU imports from Hong Kong during these two months more than doubled (+159%) cast doubts on the effectiveness of the quota policy against China.

Nevertheless, Tunisia and other Mediterranean garment suppliers were not swept away by Asian competitors. EU imports of Tunisian textile and clothing articles (traditionally about 92% of this total are garments) increased slightly by 2.8%. Morocco (+4.6%) and especially Egypt (+13.3%) did even better.

Mediterranean export star?
Is Egypt a rising Mediterranean export star, defying Tunisia and Morocco which have both started to decline?

According to Ahmed Sellami, president of Fenatec (the Tunisian Textile and Garment Federation), the sustainability of the Tunisian industry is better than that of Egypt. The minimum salary in Tunisia is around EUR200 per month and most garment manufacturers pay more than the legal minimum, while Egyptian labour is very poorly paid.

Mr Sellami points to the importance of foreign investment for the Tunisian textile and clothing sector.

The country had 2,094 companies in 2005, of which nearly 1,000 are companies with foreign capital (joint-ventures or wholly owned). Incentives for foreign investors in Tunisia are very attractive and will probably become even more so in 2008 when quotas against China should have disappeared.

TexMed 2006
Riadh Attia, the general commissioner of the re-shaped TexMed garment fair (Tunis, 14-16 June 2006), defines TexMed as a major trade event in the Euromed area, aiming at stimulating synergies and the weaving of alliances between Tunisian and EU companies, in a spirit of Euro-Mediterranean solidarity, complementarity and prosperity.

43 of the 183 confirmed exhibitors are foreign, mainly European companies. The 140 Tunisian exhibitors play the trumps of proximity to the EU, delivery speed and high competence, often via technology transfers from foreign investment partners.

*The EU-Tunisia Association Agreement
Tunisia was the first Mediterranean country to sign an Association Agreement with the EU on 17 July 2005. The Euro-Med Association Agreement between the European Community and its Member States, on the one part, and the Tunisian Republic, on the other, came into force on 1 March 1998. As well as strengthening political dialogue, trade, economic, social and cultural issues, an important component of the Association Agreement provides for the establishment of an EU-Tunisia free trade area by the year 2010.