Brexit Impact: Clothing and Footwear Exports to EU Plummet, Prompting Calls for Trade Review
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- Published: Saturday, 08 June 2024 13:57
In the wake of Brexit, the export landscape for British clothing and footwear has undergone a seismic shift, with exports to the European Union experiencing a significant decline. A recent study conducted by Retail Economics and online marketplace Tradebyte has shed light on the multifaceted challenges faced by businesses, ranging from intricate regulations to border red tape, ultimately culminating in a staggering drop in exports.
According to the report, exports of clothing and footwear to EU nations plummeted from £7.4 billion in 2019 to a mere £2.7 billion in 2023. This sharp decline has reverberated across the non-food goods sector, resulting in an 18% overall decrease in exports to EU single market countries.
The repercussions of this downturn have been keenly felt by British brands and retailers, particularly smaller and medium-sized enterprises, which have borne the brunt of increased bureaucracy compared to their larger counterparts. Richard Lim, Head of Retail Economics and co-author of the report, highlights the structural changes in trade routes, with some UK firms opting to establish offices within the single market to navigate complex border regulations.
The ramifications extend beyond mere numbers, with many UK-based apparel manufacturers opting to relocate production to EU nations, triggering concerns about job losses and skill depletion domestically. For instance, a longstanding sock manufacturer in Leicester made the poignant decision to shift production to Italy, marking the end of over a century of operations in the East Midlands.
Furthermore, the UK has missed out on capitalizing on the surge in online goods sales within the EU since 2019. Despite the exponential growth of the European e-commerce market, Brexit-related trade complexities have impeded UK brands and retailers from seizing this lucrative opportunity, according to the report. Richard Lim emphasizes this as a significant missed opportunity for UK businesses.
Amidst the gloomy export scenario, there is a glimmer of hope in the realm of services exports. A separate report by the think tank ‘UK in a Changing Europe’ reveals a surge of nearly 30% in services exports since February 2020, driven primarily by a boom in business services. Remarkably, this growth has propelled services to become the UK's largest export sector, surpassing manufacturing and transport equipment. However, the report underscores a puzzling lack of clarity regarding the reasons behind the resilience and growth of UK services exports, which remained largely unaffected by Brexit rule changes.
Looking ahead, Rain Newton-Smith, Head of the Confederation of British Industry (CBI), advocates for a comprehensive review of the UK’s trading relationship with the EU. With the general election looming on July 4, Newton-Smith urges for a ‘bold pitch’ to international investors, proposing the 2026 review of the UK-EU trade deal as an opportune moment to address trading frictions affecting businesses.
In conclusion, the precipitous decline in clothing and footwear exports to the EU underscores the urgent need for policymakers to reassess and recalibrate the UK’s trading dynamics. As businesses grapple with the fallout of Brexit-induced disruptions, concerted efforts towards fostering a more conducive trade environment are imperative to safeguarding the economic interests of the nation.