EU Textile and Apparel Industry and Trade Patterns: Discussion Questions from FASH455

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#1: How do the ‘double transformation‘ rules of origin in most EU free trade agreements benefit or hurt the EU textile and apparel industry? What are the economic, geographic and policy factors behind the growing intra-region textile and apparel trade in the EU?

#2: The EU region is a leading producer of textiles and apparel. What effect do you think the proposed EU-US trade agreement will have on big-name EU fashion brands such as Hugo Boss?  What effect do you think the agreement will have on textile and apparel production in the EU as a whole?

#3: Why or why not do you think the EU textile and apparel industry is immune to the ongoing US-China tariff war?

#4: Comparing VF Corporation with Hugo Boss, what are the similarities and differences of their sourcing strategies? How might their respective sourcing strategy involve in the next 3-5 years and why?

#5: With such an emphasis on the merging of technology, data analytics, and differentiation in the textile and apparel industry worldwide, do you think it is possible for a small European apparel brand to compete with larger companies in the region? If so, how?

Additional reading; The EU-28 Textile and Clothing Industry in the year 2018

(Welcome to our online discussion. For students in FASH455, please address at least two questions and mention the question # in your reply)

Author: Sheng Lu

Professor @ University of Delaware

17 thoughts on “EU Textile and Apparel Industry and Trade Patterns: Discussion Questions from FASH455”

  1. #1: “double Transformation” – textile industry promotes and loves the rule since it forces their EU-customers (willing to particiapate in FTAs) to buy their products – Apparel industry hates it because it is THE barrier to participate in FTAs. I am very surprised that so many companies are still being able to manage FTAs – hopefully in a compliant way – chapeau !
    The growing intra-EU-trade is caused by near-shoring production and E-Commerce I assume.
    #2: as long as the existing rules-of-origin in the EU- and US-FTAs exists the chance to benefit from an FTA is getting smaller and smaller. It is not understable that the oldest industry at all and the most-globalized industry has the most-restrictive rules – established in the 70-ties of the last century and ignoring the trade developments of the last 30 years (that I can remember).
    #3: It is immune as long it is not exporting to the US. But those who export (most of them sourcing in China as well) are in the same situation as the US importers.
    #5: Invests are actually so high in digitalisation (for product development, for sales incl. E-Commerce’) that it has become very difficult for smaller brands to compete and grow.

  2. #1 The ‘double transformation’ rules of origin in most EU free trade agreements benefit the EU textile and apparel industry because it allows for the importing of specialty goods that might not be found in the EU but also stimulates its own industry by keeping fabric forward production in the EU. Because the EU consists of many countries that are close in proximity, the double transformation takes advantage of the geographic benefits and can account for shorter lead times and more flexibility. The intra-region textile and apparel trade happening within the EU allows for the EU to be self-sufficient and creates a greater independence of the EU, allowing them not to rely on other regions.
    #3 In regards to the EU Textile and Apparel Industry, I think that the EU is immune to the ongoing US-China tariff war because the EU is self-sufficient the textile and apparel industry. The EU does not feel the repercussions of the U.S.-China tariff war because the EU has very advanced technology for textile manufacturing, as well as, advanced technology for apparel making. That being said, the EU does not have to rely on China for mass production compared the U.S., who has driven the apparel production sector almost completely out of its country.

  3. #3 I believe that the EU textile and apparel industry is immune to the ongoing US-China tariff war because this industry is able to function properly by interacting with nations within its own region; there is simply no need for apparel producers in the EU to source from other regions like China. Because the EU is so self sufficient and has the capabilities to produce both textiles AND apparel within their region, they are able to avoid the burdens associated with the US-China tariff war.

    #4 VF Corporation and Hugo Boss share many similarities in their sourcing methods. VF Corporation produces a small portion of its products in its own factories while a large majority of its products are produced overseas. Similarly, 17% of Hugo Boss’s total sourcing volume was produced within its own facilities while the remaining portion of its products were sourced from external suppliers. Similarly to VF, Hugo Boss takes pride in its careful selection of suppliers as well as its high-quality standards that are practiced in their own factories. In the next 3-5 years, I would expect Hugo Boss to source more of its products from external suppliers due to the expansion of free trade agreements between the EU and other regions like the US. The proposed EU-US trade agreement may cause Hugo Boss to source more of its textiles from the US, yet I still believe that many of its products will still be produced in its own factories or sourced from nations with its region.

  4. #3. I think the EU textile and apparel industry is immune to the US-China tariff war because they have a complete supply chain. The EU can make textiles and apparel so they don’t have to rely on the U.S. or China for any step of production. Low end apparel can be made in Eastern Europe and higher end and luxury apparel can be produced in Western Europe. The EU likely still relies on China for some specialty items or fabrics such as silk, but the U.S.-China trade war has not increased tariffs for the EU.

    #5. I think it would be very difficult for a small European apparel brand to compete with larger companies in the region, but not impossible. Because technology is so important in the region these days and has greatly cut costs these smaller brands would have a vast disadvantage. They could not produce products as cheaply or quickly as other EU brands. However, if the marketing was right they could still make a profit. If they made a product that was more sustainable and socially responsible they could have a consumer base willing to pay more. EU brands mostly pay workers well but if small brands outsource to developing nations and pay a wage equal to other EU brands this could be seen as a greater social good to consumers. Smart marketing and an ethical focus is how smaller EU brands like Lucy and Yak have been able to gain a share of the market.

  5. #3: Why or why not do you think the EU textile and apparel industry is immune to the ongoing US-China tariff war?
    The EU textile apparel industry is no way immune to the ongoing US-China tariff war. Uncertainty is bad for business. EU Textile and apparel industry will be affected by any product they buy from the U.S. the tariff war will impact U.S. prices and then trickle to impacting EUs pricing.

    #5: With such an emphasis on the merging of technology, data analytics, and differentiation in the textile and apparel industry worldwide, do you think it is possible for a small European apparel brand to compete with larger companies in the region? If so, how?
    Small European brands have personalization and a connection with their customers that will keep their businesses alive. Europeans highly value a connection with where they buy products, traditions, as well as the people they do business with. Businesses in the U.S. are viewed differently than in Europe. A customer in Europe is not quick to adapt to change, they will, however, take a chance on a business’s new endeavor that they have followed for a long time.

  6. #3. Overall the EU is somewhat immune to the U.S.- China trade dispute due to the fact that the EU textile and apparel industry pretty self-sufficient. They have the ability to take care of their own needs.

    #5. In today’s technologically advanced society, big companies tend to take over smaller businesses. However, smaller companies are not completely out of luck when it comes to competing with big competition. Due to the amount of publicity different businesses can receive from the various forms of social media, the chances of bringing in business increases. A lot of consumers prefer to shop at smaller companies as well. Customers prefer this because there is a relationship between the producer and the consumer.

  7. #3: I do not believe that the EU is immune to the US China trade war. As the industry has become so globally dependent, the effects of the trade war are likely to be seen even in the EU. Although the EU is somewhat more independent, they still trade with the US and therefore will feel the effects of rising prices of products as globalization is so predominant.

    #5: Although larger retailers are increasing throughout the world, there is still a market for a smaller retailer in the EU to compete in the market. For a small retailer to stand their ground on their own, they must find a way to stand out among larger more predominant retailers such as an emphasis on customer service or higher quality products. If smaller retailers in the EU remain specialized and differentiate their products from larger competitors, they will find their niche market and continue to be successful.

  8. #3: The EU textile and apparel industry is not immune to the ongoing US-China tariff war because the textile and apparel industries are globally connected, changes in one country will have effect on other countries, especially when it comes to industry leading countries such as China and the U.S. Though EU might experience very little influence from the tariff war, they are not immune from it.

    #5: I believe there will be market available for small European apparel brands. Though big industry player seem to be taking a lot of market share, there is niche market available for small apparel retailers because there are customers who want their products to be unique and different from everyone else’s. Small retailers could focus on their speciality and uniqueness to attract customers.

  9. #3
    I do not believe that the EU textile and apparel industry is immune to the tariff war between China and the US. The textile and apparel industry is truly a global industry, which means that there affects that reach more than just the country that a decision was made in. In the case of the tariff war, there are affects in countries outside of the US and China, predominantly in Asia as US companies have begun to bring their business to the shores of other countries, or at least send out feelers. The EU textile and apparel industry has not seen affects like this, as the US has not made moves to attempt to bring their business there, however they are not immune to the dispute. For example, US companies that have locations in the EU will feel the affects and price changes move across the sea, which in turn could lead to other decisions having to be made within the EU. Because of the true globalization of the industry, countries all over the globe are affected by the decisions made by one another, and the EU is no exception especially in the case of the rather large dispute between the US and China.

  10. #3. The EU textile and apparel industry is immune to the ongoing U.S.-China tariff war mainly because the EU is self sufficient, meaning the country does not rely on the cheap mass production that U.S. fashion retailers rely so heavily on. The EU is the second largest economy behind the U.S. and is fully capable of producing textiles and apparel domestically. This pertains to both inexpensive mass produced garments as well as high end, luxury goods that are produced in countries such as Italy. This enables the EU to be scot-free throughout this U.S.-China tariff war, meaning the implications of this tariff war will not affect the EU directly.
    #5. It is possible for small European apparel brands to compete with larger companies in the region, as smaller businesses are able to make lasting relationships in order to ensure regular customers. Although merging technology gives larger companies an advantage, as it allows them to produce their products quickly and efficiently, smaller apparel brands are able to be more personable and respond to problems instantly. In order to give smaller apparel brands an edge, it would be important to factor in sustainability practices as well as high quality products.

  11. #3. In my opinion, as developed from the many readings and class discussions deliberated in FASH455, I do not believe that the EU is immune to the Us/China Trade War. I think it is almost naïve to hope that the relations between to majorly influential and powerful; nations could not/have not affected the economic relations with others. There is still a significant amount of production, manufacturing, retailing, and trade occurring between both the US and Europe as well as China and Europe, and unfortunately the complications and consequences that arrive between the US and China may infiltrate their relations with other respective countries. Globalization is sweeping across the world, especially in the textile and apparel industry, and this demise of a relationship will boil over into the nations that may get caught in the crossfires.

    #5. I do not believe that a small European apparel brand will be able to necessarily ‘compete’ with larger companies, however, I do believe they will be able to maintain steady revenues as a result of customer loyalty. I have researched that (oftentimes) consumers in the US are looking for the cheapest bargain when shopping, whereas in Europe most consumers are looking for quality over price. Therefore, I think that in the nature of European retailing, a small brand will survive and maintain business due to the trust, reliability, and consistency it offers to its consumers.

  12. #3: Why or why not do you think the EU textile and apparel industry is immune to the ongoing US-China tariff war?

    I do not believe that the EU textile and apparel industry is immune to the ongoing US-China trade war, however they probably will not be heavily affected by this. The EU has a pretty self sufficient T&A industry that requires little assistance form other countries. That being said, American retailers do have stores in the EU and those will be effected by the trade wars.

    #5: With such an emphasis on the merging of technology, data analytics, and differentiation in the textile and apparel industry worldwide, do you think it is possible for a small European apparel brand to compete with larger companies in the region? If so, how?

    I believe that the emphasis placed on quality and heritage in European countries will be enough to keep the smaller brands alive. Unlike in America, the European shopper does not mind spending a little more money on apparel that they believe is worth the cost.

  13. #3: Why or why not do you think the EU textile and apparel industry is immune to the ongoing US-China tariff war?
    EU textile and apparel industry is immune to the US-China tariff war because there are seldom trade between EU and those countries. In that case, it will not get involved in the tariff issues or trade war at all. What is more, the inter-regional business model of EU already fulfilled its own supply and demand so that it no longer or seldom needs trade with other countries. EU has a fully supply chain especially on luxury goods market.

    1. #3: Why or why not do you think the EU textile and apparel industry is immune to the ongoing US-China tariff war?
      I think the EU textile and apparel industry would be immune to the ongoing US-China tariff war, in other words, EU would not be directly affected, because the tariff war is between the US and China. But that does not mean there will be no side effects to the tariff wars with other countries that surround China and US. There is a possibility that due to the tariff war the US or China will change their policies with everyone as a result of being in that situation.

      #5: With such an emphasis on the merging of technology, data analytics, and differentiation in the textile and apparel industry worldwide, do you think it is possible for a small European apparel brand to compete with larger companies in the region? If so, how?
      I do think European apparel brand could compete with larger companies in the region because it’s all about quality, not quantity. If European brands figure out a way to give the customer directly want they want, competing with other companies would be easy. Plus we have to keep in mind every brand starts from the bottom, so if there is a will there is a way. It might take some time and investments in the right area but it is possible to do so.

  14. #2. The EU region is a leading producer of textiles and apparel. Hence, the effect I think the proposed EU-US trade agreement will have on big-name EU fashion brands such as Hugo Boss is an increase in consumer base because the US is no longer a major producer of apparel. Hence, the agreement will generate additional trade opportunities for companies lie Hugo Boss. Consequently, the effect the agreement will have on textile and apparel production in the EU as a whole is the creation of export opportunities, mostly in the technical textile area. EU companies will have the chance to differentiate their products and establish operations in the US market.
    #3. I think the EU textile and apparel industry is immune to the ongoing US-China tariff war because it self-sufficient and benefits immensely from intra-regional trade. Also, the region does not export exclusively to the US so it is not likely to be affected. The EU does not rely on another region for its mass production thus it cannot be affected by the China-US tariff war.

  15. 3) I think that the EU textile and apparel industry is pretty immune to the ongoing US-China tariff war because the EU is very inter-connected and is able to source/ produce within the region without looking to those outside. The visual tells us that the EU Textile & Clothing Industry employs 1.7 million workers in 171,000 companies. These are quite large numbers. EU never had a strong reliance on things Made in China so this tariff war is pretty irrelevant.

    5) With an emphasis on the merging of technology, data analytics, and differentiation in the textile and apparel industry worldwide I think it is hard for a small European apparel brand to compete with larger companies in the region but not impossible. I remember a video we watched in class talking about the tight-knit nature of the European community and I do not think that they would want an emerging or small brand to fail simply because they are smaller. Unlike the US, I believe the EU has a bit more value placed on products made within the region and they are going to support smaller businesses rather than take the easy way out and get something from China/ any Asian country that may be cheaper.

  16. #3: Why or why not do you think the EU textile and apparel industry is immune to the ongoing US-China tariff war?
    On one hand, I think EU is somewhat immune to the US-China tariff war because they have a relatively complete supply chain and so not source/rely on either China or the U.S. The EU is pretty self sufficient when it comes to textile and apparel. On the other hand, I do not think EU is completely immune to the US-China tariff war due to the fact that the textile and apparel industry as a whole, is a global operation in the sense that changes in the way one country produces / sources their textiles and apparels, effects other countries in one way or another. While this dispute between China and the US doesn’t seem to directly influence the textile and apparel industry in the EU, the US is faced with a struggle in a key sourcing destination (China), while China is facing the same with one of the countries they manufacture for (US). Considering US heavily depends on china for production, both the US and China will be looking to make up for the loss elsewhere, which will effect proceeding countries.

    #5: With such an emphasis on the merging of technology, data analytics, and differentiation in the textile and apparel industry worldwide, do you think it is possible for a small European apparel brand to compete with larger companies in the region? If so, how?
    Although larger brands typically dominate the industry, I think it is still possible for a small European apparel brand to compete with larger companies in the industry. To start, smaller companies have more room to interact and connect with their consumers on a more personal level than larger companies can, which is attractive to consumers. In addition, since larger companies for the most part mass produce and are so concerned with keeping up with the fast pace of the market, their products are more likely to be mainstream and conform to the social norms and trends of society. Smaller apparel brands have an advantage in this sense for they have more room to create more unique products, in which is appealing to consumers as well. Last but not least, with the emphasis on the merging technology, data analytics, and differentiation in the T&A industry, if smaller brands take advantage of this through the use of social media and technology, they can promote and advertise themselves on various social media platforms in order to gain recognition.

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