European competition plan overlooks textiles

The European Commission unveiled the Industrial Accelerator Act (IAA) on Wednesday, March 4, 2026. In the presence of leaders from the Committee of the Regions (CoR), executive vice president Stéphane Séjourné presented an initiative designed to fundamentally strengthen the EU's competitive position against major powers such as China.

Strategic sectors

The draft law aims to increase the manufacturing industry's share of the EU's gross domestic product (GDP) from approximately 14 percent to 20 percent by 2035. It focuses on heavy industries such as automotive; batteries; construction; chemicals; steel and transport. Textiles do not appear to be part of the plan at present.

Séjourné emphasised that the implementation of the IAA depends on a “place-based competitive strategy”. Local authorities manage a significant portion of public investment and must leverage their unique regional strengths to position Europe as an innovative hub.

To accelerate this, member states will be required to establish a fully digital licensing system to standardise procedures upon award. Stricter requirements will soon apply to foreign investments exceeding 100 million euros in strategic sectors. Foreign companies with a large market share in an industry will now be required to collaborate with European partners to gain market access. Claiming local government support will become more difficult due to new minimum requirements for components produced in the EU.

No textile measure

The omission of textiles from the debate is noteworthy, as it is an essential pillar of the local economy in several European regions. Portugal and Türkiye are examples of textile hubs with growth prospects.

The sector generates an annual turnover of over 170 billion euros, according to a 2024 summary report by Euratex. It also accounts for 64 billion euros in exports to countries outside the EU. With more than 1.3 million employees (mainly in SMEs), textiles is one of Europe's most labour-intensive industries.

Similar to the automotive sector, China maintains control over the entire textile supply chain. This ranges from producing raw materials like silk and cashmere to manufacturing and acquiring Western fashion brands.

The decision to treat textiles as a secondary concern is consistent with the policy direction of the past year. Key legislation, such as the Corporate Sustainability Reporting Directive (CSRD) and the Corporate Sustainability Due Diligence Directive (CSDDD), was subsequently weakened via the so-called “omnibus regulation”. This eases obligations for fashion companies under the guise of reducing “administrative complexity”.

The IAA still needs to be approved by the European Parliament. Meanwhile, the textile sector is lobbying intensively to be recognised as a “strategic sector”.

This article was translated to English using an AI tool.

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