The study presented here is aimed at analysing the current state of clothing trade in the Balkan states. The dynamics of change over a 15‐year period following economic reforms are revealed. The clothing industries play a significant role and continue to contribute to the economic prosperity of countries with an inexpensive labour force. For most Balkan States clothing’s export plays an important role in promoting economic growth and development – for example, exports of garments Albania was in 2015, 16.81% of its exports, Republic of Macedonia 11.75% of its exports, in Turkey10.51% etc. The main factors which influence the level of competitiveness of clothing products from the Balkans are the gross value added per employee and wages. When the producers of the Balkan countries will create products with higher added value in garment industry the competitiveness of these countries will decrease. Also rising wages in this industry, as a result of trade union pressure or government policy, will lead to decreasing competitiveness of these products on the EU market and implicitly to the decrease of exports of garments from these countries. The main challenges that must face the Balkan States are related to restructuring of economic system, changing trade markets and patterns, declining of domestic demand of most merchandise, reduction of competitive ability, narrow export base, and lower economies of scale. The main opportunities that most of these countries can exploit are related to their geographical position, membership of the EU market, infrastructure in garment sector, and highly skilled workforce.