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Study: Brexit damages clothing and shoe exports in the EU

Study: Brexit damages clothing and shoe exports in the EU

At the last minute, Great Britain and the EU agreed on a free trade agreement. However, things have not really been going smoothly since then.

According to a study, bureaucracy and new regulations have seriously damaged the export of clothing and shoes from Great Britain to the EU since Brexit.

Exports fell from 7.4 billion pounds (8.7 billion euros) in 2019, i.e. before the EU exit, to 2.7 billion pounds in 2023, the Guardian newspaper quoted a study by the consulting firm Retail Economics and the online platform Tradebyte as saying. This contributed to a slump in the export of so-called non-food goods to countries in the EU internal market by almost a fifth (18 percent).

Great Britain left the EU at the end of January 2020 and, after a transition phase, has not been a member of the EU’s internal market or customs union since 2021. Despite a free trade agreement agreed at the last minute, new tariffs have been imposed in some areas since then, and bureaucratic regulations are also making business more difficult. Bilateral trade has fallen significantly. Opposition leader Keir Starmer, whose social democratic Labour Party is expected to win the parliamentary election on July 4, according to polls, has announced that he will align British rules on food and agricultural products with those of the EU. However, he rules out a return to the internal market or the reintroduction of EU freedom of movement.

However, some areas are also increasing

Because of the decline, sales of British brands and retailers to the EU have collapsed since Brexit, even though the European e-commerce market is flourishing, the report continued. Small and medium-sized companies are particularly affected, as it is more difficult for them to comply with the new bureaucratic regulations. Not all non-food goods were affected. Export sales increased in the health and beauty, DIY and gardening sectors. This partially offset the declines in the clothing and footwear sectors.

The decline can be explained in part by the fact that British companies opened an office in the EU because of Brexit in order to circumvent the new regulations, said study co-author Richard Lim of Retail Economics. However, many British clothing manufacturers have also relocated their production to an EU country due to bureaucratic hurdles – at the expense of skilled workers and jobs in Great Britain.

Services are increasing

According to a study by the think tank UK in a Changing Europe published on Tuesday, British exports of goods to the EU have declined since Brexit. However, exports of services have increased by almost 30 percent compared to February 2020. “This sector, which also includes legal services and consultancy, has now overtaken manufacturing and transport equipment (including cars) to become Britain’s largest export sector,” it said.

Source: Stern

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