Production and trade processes in the textile industry have been undergoing tremendous changes in structure due to both changes in technology (i.e. increased mechanization and automation processes) and in the institutional environment (i.e. the assignment of the WTO treaty in 1994). This paper studies the restructuring process in the textile industry from the perspective of two major textile producing countries in the EU15, i.e. Italy and Portugal between the two years 1995 and 2009. As a starting point, a detailed descriptive analysis of the global distribution of the textile industry and changes therein is provided. By means of two international textile trade networks (ITTNs), showing (1) trade in value added and (2) trade in labour, we next discuss spatial trade patterns and changes therein. Focusing on the ITTNs, we then figure out how these countries’ textile industries were affected in terms of specialisation patterns, movements along the global value chain and vertical specialisation. Combining the merits of a multiregional I/O-framework with network analysis both qualitative and quantitative aspects of the experienced restructuring process are figured out. This paper contributes to a better understanding of changes in national economic structures resulting from changes in the institutional and technological change without masking the international context. 1 Marlies Schütz, Graz Schumpeter Centre, Universitätsstraße 15/FE, 8010 Graz, Austria. Tel: +43-(0)316-380 3597, e-mail: firstname.lastname@example.org Nicole Palan, Graz Schumpeter Centre, Universitätsstraße 15/FE, 8010 Graz, Austria. Tel: +43-(0)316-380 3596, e-mail: email@example.com. 2 This article was funded by the Fonds zur Förderung der wissenschaftlichen Forschung (FWF) under grant P24915-G11:“Diffusion Processes in economic systems” and supported by funds of the Oesterreichische Nationalbank, Anniversary Fund, project number 15482. The authors like to thank the FWF for financial support. Furthermore, we are grateful to Jacques Thisse and Heinz D. Kurz for fruitful discussions on earlier drafts of this paper as well as Nadia Simoes and Nuno Crespo for helpful comments. Finally, our thanks go also to Benjamin Marussig and Stefan Palan for supporting us in this work.