European textile and clothing industry body Euratex has welcomed the new rules on origin, which will be introduced across the Pan-Euro-Mediterranean (PEM) region, covering 27 EU member states and 24 partner countries in the region.

Euratex explained it is a landmark achievement that will accelerate the integration of textile and clothing supply chains and boost textile and clothing production and trade within the region, both in the East and Southern borders of the EU.

The PEM region includes European Free Trade Association (EFTA) States, Türkiye, countries which signed the Barcelona Declaration, the Western Balkans, the Faroe Islands, the Republic of Moldova, Georgia and Ukraine.

Euratex pointed out the area is a “top priority” for the EU textile and clothing sector, as the region accounts for 35% of its exports and 21% of imports. Plus, trade from these countries has accounted for €677bn ($729.69bn) in 2023.

Euratex added: “In a moment when companies are looking at moving their production from Asia to nearby, like-minded and more reliable countries , it is very timely to have the PEM Convention implemented.”

The PEM Convention on preferential rules of origin establishes common rules of origin and cumulation among PEM contracting parties and the EU, to facilitate trade and integrate supply chains within the region.

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By GlobalData

In 2013, the European Commission adopted a package of proposals aimed at increasing trade between the EU and the rest of the PEM region, including modernised rules of origin, lifting the restrictions on duty drawback and introducing the principle of ‘full cumulation’.

After ten years of negotiations, the European Commission has now reached a final agreement with all PEM partners.

Euratex has welcomed the changes and says they will accelerate the integration of textile and clothing supply chains and boost production and trade within the PEM region. It says the agreement is particularly welcome at a time when many companies are considering moving production away from Asia and into closer countries.

Alberto Paccanelli, president at Euratex, said in a statement: “This is a strategic trade deal that can help European companies recover from the multiple crisis which we have faced since 2020. We call on the European Union to not stop here but to keep up the efforts to secure trade deals that are good for European companies and their competitive position in the world. The next objective should be the adoption of the EU-Mercosur Agreement and a conclusive settlement of all trade disputes with the United States.”

Euratex’s director general Dirk Vantyghem added: “Today’s unanimous vote in favour of the modernised PEM rules is good news for our industry. We should now engage with these partner countries to fully exploit the potential of these new rules. Euratex is ready to engage in an industrial dialogue with the companies from the PEM Countries to facilitate their transition to the new framework.”

The news comes after Euratex urged the EU President to develop a new competitiveness strategy for the manufacturing industry to keep it competitive. It added that including the textile and clothing industry in the Net-Zero Industry Act would be a positive first step

In its spring report, Euratex warned about the growing trade deficit in the EU textiles and apparel industry as the sector becomes more exposed to global pressures.