European wearing best oriental hat (5)
I believe the answer is:
topee
'hat' is the definition.
(topee is a kind of hat)
'european wearing best oriental' is the wordplay.
'european' becomes 'e' (abbreviation e.g. EU).
'wearing' indicates putting letters inside.
'best' becomes 'top' (associated in meaning).
'oriental' becomes 'e'.
'top'+'e'='tope'
'e' put inside 'tope' is 'TOPEE'.
(Other definitions for topee that I've seen before include "Tropical sun hat" , "Headgear" .)