Stakeholders from EU countries and those countries on the southern rim of the Mediterranean met in Milan to discuss ways the neighbours can partner to help businesses become more competitive through closer cooperation.

The importance of the industry for both sides of the Mediterranean is clear. In the EU the textile and clothing industry had a turnover of more than 172 billion euros in 2010 with exports outside the bloc of more than 34 billion euros, according to Euratex, the European Apparel & Textiles Confederation. Almost 150,000 companies in the industry employ about 1.9 million people.

For the Mediterranean countries the importance of textiles and clothing production is more evident, as textiles are the largest export product in Tunisia, Morocco and Jordan while in Egypt and Syria it is second after oil products. In Turkey, Tunisia, Morocco, Egypt, Syria and Jordan the textiles and clothing industry accounts for between 30 and 50 percent of all industrial jobs.

With that as the backdrop, about 75 participants converged on the headquarters of the Milan Chamber of Commerce for an annual conference that allows stakeholders of the textiles and clothing industry to increase

cooperation by exchanging information and best practice examples. This year’s conference, ‘Challenges and Opportunities for the Textiles and Clothing Sector in the Euro-Mediterranean Region,’ was attended by businesses, trade associations, university representatives, national ministries and public agencies as well as European organisations including the European Bank for Reconstruction and Development, the European Training Foundation and the Agence Française de Développement.

While the benefits of an EU-Mediterranean partnership in the textiles and clothing industry is acknowledged for the southern Mediterranean countries – for the past two decades the textile and clothing industry has dominated trade from Mediterranean countries with the EU, accounting for 50 percent of exports of manufactured goods. European businesses, on the other hand, can benefit from the textiles and clothing value chain. Geography is a positive factor for EU businesses, because Mediterranean companies can fill orders faster than their Asian competitors. Moreover, there is a belief that improved economic conditions in the southern Mediterranean will facilitate the birth and consolidation of democracy in those countries.

Textile conference broach challenges for SMEs

Despite the obvious benefits of collaboration challenges remain, especially for small and medium-sized enterprises (SMEs) on both sides of the Mediterranean that compete with Asian producers.

Furthermore, the industry needs to meet the challenges raised by trends such as innovation in order to adapt to the modifications of global consumer demand. To this end, professional and entrepreneurial skills play a key role. The vision of a true co-development to reach a fully integrated market should create a win-win situation for both sides of the Mediterranean.

Many conference attendees from Mediterranean countries called for a common approach including Waleed El Nozahy, Executive President of the Agadir Agreement Technical Unit, who said many business leaders in the four member countries of the agreement – Morocco, Tunisia, Egypt and Jordan – have not developed the mentality to cooperate. One of his biggest challenges, he said, is helping SMEs understand that cooperation will help stave off Asian competition. But, he added, that the Agadir countries, also need significant EU involvement to boost the cooperation process as intra-regional cooperation is not enough.

Francesco Marchi, Director General of Euratex, the voice of the European textiles and clothing industry said, ‘Yes, the Mediterranean countries should be an area of production. We can help but we need to make it reciprocally. All countries need to be getting an advantage out of this.’

After existing business support networks were presented to the delegates, Jean-Francois Aguinaga, Head of Unit, Textiles, Fashion and Forest-based Industries, at the European Commission, noted that, ‘What is important is that the doors are open and there is dialogue. We need to show how to take advantage of these networks or else the SME’s will get lost.’ He went on to underline the significance of being able to review initiatives to see if they have led to job creation or retention and increased turnover.

Funding Opportunities for cooperation

The Milan conference touched many other themes throughout its two-days of sessions on March 12 and 13, 2012. One topic was how to fund development in the textile and clothing industry, something the European Bank for Reconstruction and Development is doing by supporting projects that are often seen as too risky for commercial banks to take on. The bank has a history of helping textiles and clothing companies in Eastern Europe, the area it was initially created to serve and is increasingly doing the same for the Mediterranean, said Charlotte Ruhe, director of the small business support team at the European Bank for Reconstruction and Development. SMEs that have used the bank have increased turnover, productivity and employment, said Ruhe.

The Agence Française de Développement (AFD), the French international development agency, introduced two of the instruments of its "toolbox" for creating value added and quality jobs in the southern Mediterranean countries. On the demand side, the programme for strengthening commercial capacities helps to generate local clusters; while on the supply side ARIZ – a dedicated risk sharing tool facilitating access to bank credit in Africa - guarantees that the risk burden for banks is reduced when lending to SMEs. These instruments can easily be accessed via the local AFD representations.

In addition, the conference highlighted several other opportunities for cooperation in areas ranging from research and innovation to capacities and skills development (see box).