Europe's textile industry backs strategic ASEAN FTAs

These agreements are viewed as critical tools by EURATEX for reinforcing the competitiveness, resilience and long-term sustainability of Europe’s textile and apparel industry.

As a highly globalised sector, the European textile and apparel industry exports over $70.2 billion worth of goods annually, with small and medium-sized enterprises (SMEs) accounting for more than half of that value. With intensifying global competition—particularly from China—and increasing geopolitical volatility, the EU must secure more diversified and strategic trade relationships.

The fast-growing ASEAN region offers a timely opportunity to deepen economic ties and reduce reliance on a limited set of trading partners, EURATEX believes.

Strategic advantages of EU-ASEAN FTAs

Well-structured FTAs with Southeast Asian nations can deliver considerable advantages for European textile companies. By lowering tariffs and removing non-tariff barriers such as complex customs procedures and divergent technical standards, these agreements would ease the flow of European goods into ASEAN markets, enabling businesses to expand their customer base and increase exports.

FTAs also support the diversification of sourcing. Access to a broader pool of suppliers for raw materials and intermediate goods can reduce costs and increase supply chain flexibility—an increasingly critical factor amid recent global disruptions.

Furthermore, improved regulatory alignment across borders enhances Europe’s competitiveness in global markets, particularly in the face of aggressive pricing from producers in China and other low-cost manufacturing hubs.

The legal certainty and stable trading environment fostered by FTAs are also expected to attract more foreign direct investment (FDI) into Europe’s textile sector. This could unlock investment in infrastructure, technology and innovation, spurring advancements in sustainable materials, production efficiency, and design innovation.

Unlocking ASEAN potential

Each of the four ASEAN countries being negotiated with offers unique advantages for European businesses. Indonesia, the region’s largest economy, promises improved EU market access and a more favourable investment climate. Thailand’s well-developed trade infrastructure offers opportunities for building resilient supply chains and streamlining customs operations.

The Philippines, an emerging consumer market, is increasingly harmonising its standards with EU norms, while Malaysia—already a member of both the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) and Regional Comprehensive Economic Partnership (RCEP)—could serve as a strategic entry point into wider Asian manufacturing and trade networks.

EURATEX also recommends the inclusion of cumulation provisions—such as incorporating Türkiye into the Malaysia agreement—to strengthen regional supply chains and bolster EU-Asia connectivity.

Addressing challenges

While the benefits of EU-ASEAN FTAs are clear, certain challenges must be addressed to ensure they serve the European textile industry equitably, EURATEX emphasises. Lower-cost competition from ASEAN manufacturers could intensify pressure on EU-based producers, especially SMEs.

Ensuring fair rules of origin is therefore essential. EURATEX is advocating for a ‘double transformation’ rule, which would require both yarn and fabric to be produced in the EU or FTA partner country for products to qualify for tariff concessions.

Non-tariff barriers (NTBs) also remain an issue. Even with FTAs, technical regulations, licensing complexities and administrative burdens can continue to hinder trade. Future agreements must work to eliminate existing NTBs while preventing new ones from emerging.

Another critical concern is the alignment of FTAs with the EU’s broader sustainability goals. With the Strategy for Sustainable and Circular Textiles at the heart of the EU’s industrial roadmap, it is imperative that ASEAN trade partners commit to comparable standards on traceability, circularity, and decarbonisation. Failure to do so could not only undercut Europe’s environmental ambitions but also create unfair competitive advantages for less regulated imports.

Robust enforcement will ultimately determine the success of these agreements. Effective mechanisms must be in place to ensure compliance with trade provisions—particularly around intellectual property rights, subsidy transparency, and labour and environmental protections.

If crafted thoughtfully, FTAs between the EU and ASEAN countries have the potential to reshape the future of Europe’s textile industry—unlocking new markets, enabling sustainable innovation, and strengthening global resilience.

However, EURATEX concludes that these benefits will only materialise if the agreements are grounded in enforceable rules, uphold international standards and reflect Europe’s long-term industrial and environmental priorities.

ALCHEMPro News Desk (CG)