Trading with the EU under a no-deal Brexit will be pricey for UK fashion, GlobalData has warned, adding that the country’s textile and fashion firms should therefore be weighing up other markets to potentially trade with.
It comes amid a back-and-forth between the UK and EU over a long-awaited trade deal, with some fine details hindering the chances of a deal being reached before the deadline.
“Brexit talks have reached a critical point and the UK fashion industry is clinging onto the hope a deal will be clinched at the last minute,” Hannah Abdulla, apparel correspondent at GlobalData, said in a statement.
“With many businesses just about surviving the Covid-19 pandemic, having to contend with a no-deal Brexit may well be the straw that breaks the camel’s back.”
According to calculations by the UK Fashion & Textile Association, tariffs associated with trading under World Trade Organisation (WTO) rules could add almost a billion pounds to the cost of trading with the EU in the event of a no-deal Brexit.
Almost 75 percent of UK fashion and textile exports currently go to the EU.
Abdulla continued: “UK textile suppliers need to start looking beyond EU shores to other countries the UK has trade deals with. Currently, 29 of 70 existing deals the UK was automatically part of with the EU have been rolled over for 2021, including major garment manufacturing hubs such as Vietnam, Tunisia, Egypt and Morocco, and just this week, Mexico. Talks with the US, Australia and New Zealand are ongoing.
“It’s important that businesses are proactive in seeking alternative trading opportunities in order to minimise disruption.”
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