Nearly 70 fashion and textile organisations co-signed an open statement initiated by the Ellen MacArthur Foundation, including Arc’teryx, Decathlon, Etsy, H&M Group, Lacoste, Primark, Reformation, secondhand marketplaces ThredUp, Vinted and Zalando. The coalition calls on governments of the European Union, the United States and Canada to roll out supportive policies for circular fashion.
The statement points out a severe imbalance in the current economic framework: manufacturing brand-new clothing delivers far higher profit margins than garment restoration and secondhand resale. Multi-billion-dollar growth potential of the fashion circular economy is heavily restricted by outdated tax policies. Three core policy demands are put forward:
- Reduce VAT rates on secondhand goods across the EU, and abolish sales tax for pre-owned clothing in North America;
- Cut labour taxes for the garment repair sector within the EU, and launch tax credit schemes for clothing restoration businesses in North America;
- Optimise the Extended Producer Responsibility (EPR) system for textiles, and fund large-scale infrastructure for used garment collection and automated sorting.
Leyla Ertur, Chief Sustainability Officer of H&M Group, commented on the joint appeal:
“Resale extends the service life of apparel while satisfying consumers’ demand for affordable, eco-conscious shopping options. Yet existing tax rules continuously penalise circular business models. If governments truly commit to circularity, they must eliminate double taxation, slash labour overheads and remove other market barriers. Fixing the unfavourable cost economics of resale is one of the fastest, most tangible solutions to scale circular fashion globally.”
