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Brexit talks fuel uncertainty in industry

Fashion and footwear retailers have voiced concerns after the government warned it would pull out of trade talks with the European Union if a “broad outline” of a deal was not reached by June.

Last week, cabinet office minister Michael Gove told MPs he wanted to strike a “comprehensive free trade agreement” in 10 months and said that unless there was a “broad outline” of a deal by June, the UK would walk away from trade talks.

He added that the UK needs a free trade deal that protects standards without obliging the UK to follow EU rules. Negotiations between the EU and UK began this week. 

One head of sales at a high street supplier said the government was being “arrogant” in its approach: “We’re back to this situation of uncertainty. We’re a relatively insignificant island now, and I don’t see what our bargaining chips are. I think it [the government] has misjudged this and we should be working hard to find a deal. 

“Going to World Trade Organization rules is going to bring in an 8% duty rate on leather footwear, for example. And the reality is, if that happens, products are going to get more expensive because factories aren’t going to absorb the duty, and the importers and wholesalers aren’t going to cover the duty, and neither is the retailer.”

The managing director of another high street supplier agreed: “The British government is being incredibly optimistic if they believe they can do a trade deal with the EU before June. I think they won’t agree anything and they’ll kick the can down the road. We might have more transition time.”

He added: “It’s incredibly frustrating. In two weeks’ time we have to start costing spring 21. How are we costing it? What duty rate are we assuming we’re going to be paying?”

Andrew Opie, director of food and sustainability at the British Retail Consortium, emphasised the importance of securing a good deal: “A deal with the EU is necessary to reduce the checks, red tape and tariffs that would otherwise create higher costs and reduced availability of goods for UK consumers.”

“The government has an opportunity to agree a comprehensive trade deal with the EU, and it is vital they do not squander it. A no-deal scenario would harm consumers and retailers for no clear gain.”

Adam Mansell, CEO of UK Fashion and Textile Association, added: “The EU is our most significant market. While we look forward to the opportunities that new free-trade agreements will bring, securing a tariff free, quota-free deal with the EU is our absolute priority.”

However, the CEO of a high street brand was more optimistic about the government’s negotiating: “I respect and support the government’s position, focus and stance – this requires a medium-to-long-term approach and vision for the greater good of the UK, and in fact, Europe.

“The previous negotiation gave away the whole show so I see the current priority as getting the negotiation back on a fair and even keel – they need to claw back so much lost ground and that requires bold and confident steps fast. Europe needs to know the UK will revert to WTO if required.”

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