Euratex, the European Apparel and Textile Confederation, calls on the European Union and the United Kingdom to effectively cooperate to address, solve and remove the issues in the EU-UK Trade agreement that currently prevent smooth trade flows between the two sides of the Channel.
The request originates from the latest trade data, which showed how the agreement is causing considerable losses for textile companies in the EU and the UK. And the situation is likely to worsen, as the whole customs regime between UK and EU entered into force on 1 January 2022.
All the sectors have already suffered a significant loss in the past year, and textiles have been no exception. Compared to the same period in 2020, the EU recorded a dramatic fall in imports (-44%, corresponding to almost € 2 billion) and exports (-22%, reaching € 1.6 billion) between January and September. The data show that the most impacted EU countries on the export side are Italy, Netherlands, Belgium, and Germany. The most impacted countries are Germany, Ireland, and France on the import side.
Among the T&C sectors, clothing articles face the most severe drop in imports and exports, corresponding to a total trade loss of more than € 3.4 billion over the nine months. Despite these alarming figures, the UK continues to be the most important export market for EU textiles and clothing.
Concerning the impact on the UK textiles sector, in May 2021, the UK Fashion and Textile Association surveyed 138 businesses, including leading UK Fashion brands, UK textile manufacturers, wholesalers, Fashion agencies, garment manufacturers and retailers.
The results of the survey showed that:
- 71% currently rely on imports from the EU;
- 92% are experiencing increased freight costs;
- 83% are experiencing increased costs and bureaucracy for customs clearance;
- 53% are experiencing cancelled orders as a result of how the EU-UK agreement is being implemented;
- double duties had hit 41%.
The vast majority of the surveyed companies declared they would pass the increased costs on to the consumer in the next 6-12 months.
The above situation is expected to get worse. Since 1 January, full customs controls have been implemented. It means that export and import rules have become stricter: products should already have a valid declaration in place and have received customs clearance. Export from Britain to the EU must now have supplier declarations and the commodities codes changed.