EU's Digital Passport Closes Market Door to Garments Without Data

Turkey's ready-to-wear sector, facing a challenging period with net profit margins falling below 1%, is undergoing a strategic transformation in the global market. The European Union's introduction of digital product passports and stringent regulations is blocking products that cannot provide transparent and verifiable data from entering the EU market. This situation is forcing Turkish exporters to restructure their production processes and supply chains. According to industry representatives, the EU's new regulations require that all stages of products, from raw materials to the final consumer, be digitally traceable. In this context, data such as carbon footprint, water consumption, and labor rights must be presented in a verifiable manner. While companies lacking data lose their competitive advantage in the EU market, compliant firms are transitioning to a new export model focused on sustainability. Companies that hold a significant share of Turkey's ready-to-wear exports have accelerated their digital infrastructure investments to comply with these regulations. Large-scale producers, in particular, are working to enhance product transparency through blockchain-based tracking systems and third-party audit reports. However, small and medium-sized enterprises are struggling with the transformation due to high costs. Experts note that while the EU's digital passport application may increase costs in the short term, it will enhance the global competitiveness of the Turkish textile sector in the long run. It is emphasized that government support and sectoral collaborations are critical for the industry to turn this transformation into an opportunity. Otherwise, firms unable to ensure data transparency may see their share of the EU market shrink. This is not investment advice.