European restructuring and import policies for a textile industry in crisis

In the last ten years, employment in the textile and clothing industry in the European Community has decreased by roughly one million workers. In the face of falling employment, profits, and investment, and of surplus capacity, business and labor have increasingly pressured state and European authorities for adjustment assistance and import protection. Although most industrialized countries face similar pressures, policy making in the member states of the European Economic Community is made difficult by the uneven development of the EEC, which regulates trade policy and state aids to industry and restricts business practices but which is not able to construct interventionist or structural policies. Further complicating the situation is the split between two groups of states that differ profoundly on whether the EEC should adopt a liberal trading, noninterventionist position or a protectionist trade policy combined with state aids to mitigate the economic and social effects of restructuring. Tracing these developments over the last ten years, I argue that contradictions in the European political economy in textiles have led to a protectionist bias in Community policies, notwithstanding important developments in outward processing as a means of restructuring.