With Asian textile and clothing producers preparing a mass assault on US and European markets, Europe's manufacturers say only a flight to quality - to luxury and design niche markets - can save them.
"We don't have the slightest chance in competing on prices with Asia," said Fatima Lopes, a top Portuguese fashion designer, referring to Portugal's threatened textile and clothing sector.
"Our only salvation is to do exactly the opposite, to bet on brands and design, and quality, of course."
The World Trade Organisation (WTO) will scrap import quotas for clothes and textiles next January 1, forcing producers such as Portugal and Italy to think up new strategies for competing in the $400 billion global market.
The big winner is expected to be WTO newcomer China, a low-cost producer and already the world's biggest clothing exporter. European companies say they will respond by developing ever-more sophisticated textiles.
Italy's Ratti, which produces delicate wools, silks and printed cottons for luxury labels such as Escada and Valentino, hopes to lure customers to the high end of the market with soya oil or corn fibre fabrics and digital prints.
"Research, product and quality, that's what most important, that's what made Italy a big success in the world," CEO Donatella Ratti told Reuters - but she added that these days the price had to be right, too.
In order to lower costs, Ratti has shifted a tenth of its production to Romania and plans to transfer more there. In the long run, Ratti expects only a slice of its business will stay in Italy, as a breeding ground for new ideas.
"If you want something basic, you can buy it from (retail chain) Zara," Ratti said, pointing at her cream trousers.
"But if you want something really interesting" - she tugged at her soft pink fur-trimmed cardigan - "then maybe you go to Dolce e Gabbana. People will spend 1,000 euros ($1,247) if they feel they are buying 1,000 euros' worth."
Italy's Marzotto, an industry heavyweight that owns Valentino and Hugo Boss, this year quit the tough textiles business altogether to focus on its more profitable fashion arm.
INVESTORS CHEERED THE MOVE: "Marzotto are the best at what they do, for example wool yarn production, but textiles - well, it just distracts from a much more exciting area of business," said analyst Alex Boyle at Jefferies International.
Portugal, on the other hand, has few brands that match Italy's calibre. According to a Spanish government survey, international buyers put Portugal last among nine countries ranked for their fashion value.
Textiles and clothing are Portugal's second-biggest export, and up to now the sector was anchored by its relatively low wages. But salaries of 400 to 440 euros a month are far above those in Eastern Europe and put costs at 10 times those in China.
Portugal, despite billions of euros in investment, remains one of the European countries most threatened by the changes. Half of its 10,000 clothing and textile firms have fewer than nine workers.
"We're pretty worried, as you can imagine. The disappearance of the quotas is going to be catastrophic," said Carlos Branco, chief executive of garment maker Textil Nortenha.
Portugal does have strengths, such as modern factories and a network of experienced suppliers and companies centred in northern hills and river valleys.
A key asset is the ability to make small batches of clothing quickly for retailers attuned to every fashion trend, like Sweden's Hennes & Mauritz.
"Sometimes it's only three weeks from the yarn to the finished item in the stores, and that is impossible to do in China," said Silvia Jungbauer, head of the international trade department at the Confederation of the German Textile and Fashion Industry.
Although China can make millions of garments more cheaply, Europe's traditional cloth makers can provide just a few hundred garments on demand.
Prato, a sleepy Tuscan town that explodes into sprawling industrial estates outside the old city walls, has been one of Italy's textile centres since the 13th century.
Its more than 9,000 workshops produce fabrics for Italy's top designers as well as export markets.
Sergio Bigagli's company Lineaquattro employs only 12 people but has a turnover of 6 million euros a year. He said he commissioned small workshops for everything from the dyeing to finishing of fabric.
"We try to raise the quality, create novelty by using a particular design, a particular finish," he said, sitting in an office stuffed with piles of cloth and rack after rack of colourful samples.
"But we are very scared of China."