European clothing and textiles federation Euratex has examined the latest trade data from January to September 2021 and found a “dramatic fall” in textile imports and exports between the EU and the UK, with exports falling by 44 per cent to almost €2 billion and exports fell by 22 percent to 1.6 billion euros. This means significant losses for companies on both sides.
“The situation is likely to get worse as the full UK-EU customs regime came into force on 1 January 2022,” the association warns. Therefore, Euratex is calling on the European Union and the UK to work together effectively to address the issues in the EU-UK trade deal that are preventing a smooth flow of trade.
Germany records losses on the import and export side
According to the data, the most affected EU countries on the export side are Italy, the Netherlands, Belgium and Germany, while on the import side Germany, Ireland and France are the most affected countries.
Among the textile and clothing sectors, garments are facing the sharpest decline in both imports and exports, totaling a total trade loss of more than 3.4 billion euros over the nine-month period. “Despite these alarming figures, the UK remains the most important export market for textiles and clothing from the EU,” confirms Euratex.
Things are no better on the UK side, according to a May 2021 UK Fashion and Textile Association (UKFT) survey of 138 businesses – including leading UK fashion brands, UK textile & clothing manufacturers and wholesalers, fashion agencies, and Retail companies – most of them have been negatively impacted by the new Brexit trading conditions.
Increased trading costs are ultimately passed on to consumers
The results of the survey showed that 71 percent of the participating companies are currently dependent on imports from the EU and almost all (92 percent) are faced with increased freight costs and increased costs and bureaucracy in customs clearance (83 percent).
In addition, more than half (53%) of the 138 companies surveyed are struggling with order cancellations attributed to the implementation of the EU-UK deal and 41% are affected by double tariffs.
Ultimately, consumers will have to foot the bill, as the vast majority of companies surveyed said they intend to pass on the increased costs to them over the next six to 12 months.