Diver with navy enlists Europeans supplying sharkskin (8)
I believe the answer is:
shagreen
'sharkskin' is the definition.
(I've seen this before)
'diver with navy enlists europeans' is the wordplay.
'diver' becomes 'shag' (I've seen this before).
'with' says to put letters next to each other.
'navy' becomes 'RN' (abbreviation for Royal Navy).
'enlists' is an insertion indicator.
'europeans' becomes 'ee' (an abbreviation for European written twice).
'rn' enclosing 'ee' is 'reen'.
'shag'+'reen'='SHAGREEN'
'supplying' acts as a link.
(Other definitions for shagreen that I've seen before include "Sharkskin used as a decorative material" , "rough skin" , "Sharkskin - he ranges (anag)" , "Nags here (anag.)" , "Coarse leather, often dyed green" .)