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Published
Mar 22, 2017
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Fashion to suffer if UK fails to win good Brexit deal says report

Published
Mar 22, 2017

Fashion will be among the major industries to suffer if the UK fails to negotiate a favourable deal in time for it leaving the EU, a report published Wednesday claims.


House of Holland - Fall-Winter2017 - Womenswear - Londres - © PixelFormula



The report from the EU Internal Market Committee, made up of members of the House of Lords, said a wide range of industries could be damaged if there is no free trade deal in place in two years’ time. It said that with attention focused on protecting Britain's trade in financial services, non-financial exports worth double the value of financial services are at risk.

Such industries make up around on-third of total UK exports at £162bn and currently run a trade surplus, another major reason for them to be protected, the committee said.

The British Fashion Council warned the committee that not only would exports be hit but EU copyright protection for designers could be at risk and that could mean "effectively closing down London Fashion Week as a platform to promote British businesses".
 
The report said that industries like fashion may do better than aviation or broadcasting in the absence of a free trade deal. Fashion can fall back on World Trade Organisation rules, something the other two sectors could not do. But with WTO rules likely to mean UK fashion costing more due to import tariffs, the risks are clear.

UK exports of apparel and textiles were worth £9.1bn last year, rising from £8.5bn in 2015, according to the UK Fashion & Textile Association. And the EU was Britain’s biggest market for textiles and apparel, accounting for 74% of those exports. The export figure to the EU rose from £4.9bn in 2012 to £6.7bn in 2016, a 36% rise over the five-year period.

The UKFTA said the rise was boosted by an increased interest in heritage UK manufacturing and the creativity of British fashion designers.

But it also said the importance of the UK as a key apparel trading hub was a factor. The UK is currently seen as a gateway to the EU and losing this status if it has no fee trade deal could jeopardise one of the key contributors to the sector’s growth.

The House of Lords committee also said that the services sector, including retail, relies on the free movement of workers and sees this as "necessary to support growth”.

With services being responsible for the biggest chunk of UK economic output, the committee urged the government to seek a transitional deal to protect the sector and to buy time to reach a robust free trade deal.

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