Global leather market report by EU

1 November 2005

The steep decline in sales of European Union (EU) finished leather to its number one market, the United States, has been highlighted by a comprehensive report on the global leather (and textile) market written for the European Commission. Faced with developing country competition, the report, written by consultants Market Access Information and Analysis, and the Institut Français de la Mode, says that exports to the USA fell by 40% between 2000 and 2003, tumbling from euro489 million in 2000, to euro334 million in 2002 and euro293 million in 2003. Apart from cheap overseas competition, the report stressed the US market was 'difficult', notably in customs documentation, especially since the September 11 attacks, which have led to 'the implementation of burdensome and time-consuming security measures'. The weak dollar has also damaged EU exports, it said, especially when compared with the relatively strong euro. Across the world, however, there have been falls in EU exports of finished leather to 18 key markets, from euro3.4 billion in 2000 to euro2.9 billion in 2003, with steep falls in sales to Canada, Japan, Malaysia, South Korea, Taiwan, Thailand and Russia. Indeed the report stressed that although Russia is one of the most important current and potential markets for EU leather exports, and supply of leather raw materials, 'it is also viewed as a difficult market'. It continued: 'Certification procedures, which are the main area of concern, hamper EU exports of leather products', for instance an obligation to indicate the registration number of the certification body on labels. The picture is not much better regarding raw materials, where export restrictions affect the EU tanning industry: 'In general, customs clearance is non-transparent, burdensome, costly and time consuming.' Indeed, worldwide, the report noted that for the EU leather sector, export restrictions are the most damaging trade barrier, for instance in India, and the export tax on leather raw materials imposed by Argentina. There are also concerns that a similar export tax could be introduce in Pakistan, claimed the report. Overall, there has been a fall in raw material imports to the EU from Brazil, Australia and Russia.

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