ISTANBUL (Reuters) – Turkish clothing manufacturers, major suppliers to Europe, face higher production costs and risk falling behind their Asian competitors after Ankara raised taxes on imports of textiles, sector leaders are alarmed.
Last week, Ankara increased tariffs on hundreds of textile products from 30% to 100% in a bid to support local yarn and fabric manufacturers who have appealed for help amid a wave of cheaper imports.
According to representatives of the clothing sector, the new taxes weigh on the industry, the largest employer in Turkey and which supplies European brands such as H&M, Mango, Adidas, Puma and Inditex.
Job cuts could occur as import costs rise and Turkish producers lose market share to Bangladesh or Vietnam, they warn.
Exporters can technically apply to be exempt from this tax, but sources say the exemption regime is expensive, time-consuming, and does not work for many businesses.
According to Seref Fayat, president of the Turkish Clothing Industry Assembly, which depends on the national grouping of chambers of commerce TOBB, the price of a T-shirt made in Turkey is today 40% higher for a European buyer than that of a T-shirt made in Bangladesh.
COMPETITIVE ADVANTAGE
Last year, Turkish export volume amounted to $10.4 billion (9.54 billion euros) for textiles and $21.2 billion for clothing, ranking fifth and sixth in the world .
According to data from the European Clothing and Textiles Confederation, Turkey is the second largest textile supplier and the third largest clothing supplier in the European Union.
However, its share of the European market fell to 12.7% last year, compared to 13.8% in 2021.
Textile and clothing exports fell more than 8% through October this year, while remaining stable globally, according to industry data.
“I almost stopped production and eliminated most of the jobs at my yarn factory – and I am not the only one in this situation,” said Fatih Bilici, who runs a yarn factory based in Osmaniye and supplies the local and foreign markets.
“My production costs me $3.20 per kilo, while my Uzbek competitor sells it for $2.70. How can I be competitive?”
According to Seref Fayat, Turkey’s textile and clothing sector has shed 170,000 jobs since the start of the year and this number could reach 200,000 by the end of 2023.
(Reporting Ceyda Caglayan; with contributions from Corina Rodriguez in Madrid and Helen Reid in London; Augustin Turpin, edited by Blandine Hénault)
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