Rising textile raw material prices have prompted Euratex to publish a position paper outlining steps it believes the EU should take in relation to the issue including addressing export restrictions from third countries, supporting research into recycling and development of substitute materials as well as reducing speculator activity.

Euratex recommended that there should be consistent raw materials provisions in multilateral and bilateral trade agreements. Article XI paragraph one of WTO-GATT established a general ban on export prohibitions/restrictions, however, paragraph two allows for temporary measures in case of “critical shortages of foodstuffs or other products essential to the exporting contracting party.” It said the EU should strive for reinforcement of GATT/WTO provision by limiting the exception of paragraph two to foodstuffs or at least quantify “critical shortages” to avoid misuse of this general concept.

Preventing access to the Generalised System of Preferences (GSP) for countries applying restrictive measures regarding raw materials is also desirable, believes Euratex. The EU and member state authorities should also deploy all their resources to convince third countries to withdraw restrictive measures, it added.

As well as dealing with trade restrictions, there is potential to improve productivity levels of raw materials in less developed countries and EU co-operation projects should promote investment in raw materials and related infrastructures as a way to improve EU access and control over supply chains, believes Euratex.

The organisation is also concerned about cotton increasingly being a target for speculators due to the high gain prospects. It recommended the commodity should be closely monitored with the aim of introducing more discipline to the market and limiting speculator intervention.

“Improved information exchange and transparency regarding production, consumption and stocks will allow better connection between physical and derivative markets. Enhanced regulation of both physical and derivative markets including the possibility to limit positions of a given operator should also be considered,” said the paper.