Regulation EU 2025/1459 – Strategic Opportunity for Tunisia’s Textile Industry | Luca Pacioli

On 24 July 2025, the European Commission adopted Regulation (EU) 2025/1459 concerning derogations from the rules of origin applicable to textile products manufactured in Tunisia, within the framework of the EU–Tunisia Association Agreement.
This measure, retroactive to 22 January 2025 and valid for five years, introduces unprecedented flexibility in the origin criteria for certain textile articles (chapters 61–62 of the Customs Tariff), thereby reinforcing Tunisia’s competitive position on the European market.

At a time when the textile and apparel sector remains a pillar of the Tunisian economy, this reform represents a major strategic opportunity. However, it does not erase structural challenges.
This article provides an economic, legal, and industrial analysis — in the spirit of a specialized policy review — explaining why this measure stands as a “magnificent solution” to position Tunisia as a top investment destination for the textile industry.

Economic and Industrial Context

1.1 Weight of the textile sector in the Tunisian economy

The textile and clothing sector is one of Tunisia’s main export, employment, and industrial pillars.
According to recent data, “by the end of May 2025, around 87% of Tunisia’s textile and clothing exports were destined for the European market.”
This strong orientation toward the EU represents both a dependency and an opportunity: dependency on the conditions of access to the European market, and opportunity through preferential tariffs.

1.2 The global competitive environment

Tunisia faces intense competition from low-cost countries (South Asia, Bangladesh, Vietnam).
To remain competitive, it must strengthen not only price efficiency but also quality, sustainability, and innovation.
Enhanced EU market access through duty-free exemptions is therefore a crucial but not sufficient lever.

1.3 Origin rules and cost of raw materials

Traditionally, to qualify as “originating” and obtain preferential access, products had to meet strict origin criteria — mainly concerning where the fabrics and manufacturing took place.
With rising transport costs and volatile material prices, allowing non-originating raw materials while maintaining Tunisian origin status represents a major competitive advantage.
This relaxation removes a long-standing logistical and tariff barrier for Tunisian manufacturers.

Legal Analysis of Regulation (EU) 2025/1459

2.1 Legal Framework

Regulation (EU) 2025/1459 forms part of the EU–Tunisia Association Agreement by amending Protocol 4, which defines the concept of “originating products.”
Article 6 of the Protocol provides for derogations from origin rules, within annual quotas for a five-year period.

The Regulation notably sets out:

• The opening of annual quotas for eligible textile products;

• The requirement of an EUR.1 certificate bearing the annotation in box 7: “Derogation – Appendix B of Protocol 4”;

• The “first come, first served” management method for quota allocation.

2.2 Nature of the Derogation

The core innovation lies in reversing the origin criterion:
for certain textile products under chapters 61 and 62, a simple cut-and-make operation in Tunisia performed on non-originating fabric is now sufficient to confer Tunisian origin.

This “minimal transformation” is the key breakthrough — it allows Tunisian exporters to source globally competitive materials (outside the EU or Tunisia), perform assembly locally, and export duty-free to the EU.

2.3 Quotas and Duration

The scheme applies for five years (from 22 January 2025 to 21 January 2030, unless extended), with specific quotas by product category.

Example:
For women’s swimwear in synthetic fibres (HS 6112 41 90), the quota is 768,400 units/year for the first three years and 595,900 units/year for the last two.

Additional provisions include:

• If less than 85% of a quota is used, up to 15% may be carried over to the following year;

• If the quota is fully used, the following year’s volume is increased by 10%.

2.4 Compliance and Risk Considerations

To benefit from the preferential origin status, Tunisian exporters must ensure that:

• The EUR.1 certificate is correctly issued and endorsed (with the specific box 7 annotation);

• The EU customs declaration includes the proper preferential code (e.g. 320) and reference to the derogation;

• Traceability and documentation of batches and suppliers are maintained.

Non-compliance with origin rules, quotas, or timing can result in loss of preferential treatment or customs reassessment.

Why This Measure Is a Strategic Opportunity for Tunisia

3.1 Strengthening attractiveness as a near-shore destination

By easing origin constraints, Tunisia positions itself as a competitive textile production platform for Europe.
Its advantages include:

• Geographic proximity (short freight times);

• European time zone and cultural proximity;

• Existing logistics and industrial infrastructure.

This legal change removes a key obstacle — the obligation to use originating materials — enabling foreign investors and supply chains to relocate part of their production to Tunisia while maintaining duty-free EU access.

3.2 Supply Chain Optimization and Added Value

For Tunisian manufacturers, this scheme allows:

• Importation of competitive non-originating fabrics,

• Simple local transformation (cut and sew),

• Export to the EU with preferential tariffs.

This leads to lower total production costs, improved margins, and greater competitiveness, while boosting local production volumes and industrial utilization rates.

3.3 Employment and Industrial Impact

The textile sector is a major employer, especially in interior and peripheral regions.
The regulation could stimulate capacity expansion, investments in production lines, workforce training, and industrial modernization.
Amid rising energy costs, this represents a resilience lever for Tunisia’s manufacturing base.

3.4 Signal to Foreign Investors

A stable and preferential legal framework is a strong attractor for investment.
Foreign groups seeking “near-Europe” production sites can now justify locating in Tunisia due to a tangible customs advantage.
This is likely to trigger investment in equipment, digitalization, and sustainability in Tunisia’s textile industry.

Economic and Quantitative Implications

4.1 Quotas as Indicators of Potential

Regulation (EU) 2025/1459 provides quantitative benchmarks:

These figures offer a measurable growth potential and can serve as planning guides for Tunisian manufacturers and investors.

4.2 Expected Multiplier Effect

Given that textile exports to the EU already generate significant turnover, even modest improvements in profit margins can lead to:

• Higher capacity utilization,

• Increased investment in modernization,

• And improved export performance.

4.3 Impact on Trade Balance and GDP

As the textile sector accounts for a large share of Tunisia’s exports, an increase of 5–10% in duty-free exports could yield substantial competitive gains, translating into higher domestic value added, employment, and investment returns.

Structural Challenges and Risk Factors

5.1 Quota Management and Monitoring

The flexibility remains limited — quotas are annual and first-come, first-served.
Any logistical or administrative delay could result in loss of access to the advantage.

5.2 Compliance with EU Standards (Quality, CSR, Environment)

To sustain competitiveness, Tunisian manufacturers must align not only with tariff conditions but also with EU sustainability, traceability, and social responsibility standards.

5.3 Regional and Global Competition

Even with tariff advantages, Tunisia competes with very low-cost producers.
Improving productivity, moving upmarket, and reducing defect and lead times remain essential.

5.4 Temporary Nature of the Measure

The derogation lasts five years. Stakeholders must maximize benefits within this period and build long-term competitiveness to remain viable post-2030.

Strategic Recommendations for the Tunisian Textile Sector

• Develop an “Export Quota Plan”: Plan production according to annual quotas to optimize “first come, first served” management.

• Optimize the supply chain: Source cost-effective non-EU materials while managing logistics and labor costs efficiently.

• Invest in modernization and value creation: Use the preferential regime to upgrade automation, quality management, and branding.

• Reinforce customs and documentary compliance: Ensure every shipment has the required EUR.1 certificate and origin documentation.

• Promote a “Made in Tunisia – Duty-Free Access to Europe” label: Market Tunisia as a near-shore and competitive sourcing hub.

• Plan for the post-2030 period: Anticipate negotiations for extension or permanent inclusion beyond the temporary derogation.

Strategic Opportunity for Tunisia

6.1. Strengthened Comparative Advantage

• Geographic proximity: delivery to Europe in less than 72 hours.

• Skilled workforce with a strong record of social compliance.

• Labor costs 4 to 5 times lower than in Southern Europe.

• Existing free trade agreements with the EU, Africa, and Arab countries.

6.2. Tunisia: Euro-Mediterranean Textile Hub

Tunisia is emerging as a paneuropean production platform, combining the logistical flexibility of near-shoring with the tariff advantages of a preferential partner country.

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Documentary Checklist for Exporting under Regulation (EU) 2025/1459

Regional Action Plan in Tunisia to Maximize Economic Impact

Attractiveness Model for Foreign Investors (2025–2029)

Why choose Tunisia :

Result: Tunisia now offers the best competitiveness-to-market-access ratio among all Mediterranean textile producers.

Regulation (EU) 2025/1459 is far more than a technical adjustment — it is a strategic industrial recovery tool, a regulatory bridge between Africa and Europe, and a signal for global investors.

By allowing Tunisia to export duty-free after simple local transformation, Europe officially endorses the Tunisian model of agile, sustainable, and competitive textile manufacturing.

The next step: building “Tunisian Textile 4.0” — digitalized, traceable, socially responsible, and fiscally smart.

“The future of European textiles will also be written on the southern shores of the Mediterranean.”

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