The government has failed to protect exporters and manufacturers in the UK by hitting them with tariffs of up to 12% in the event of a no-deal Brexit, the UK Fashion and Textile Association (UKFT) has warned.
The government announced this morning that in the event of a no-deal Brexit, in the short term, 87% of all goods entering the UK would not face any tariffs, while import taxes would remain for 13% of incoming goods. The majority of exports will be subject to tariffs under World Trade Organization rules.
The rates will apply for up to 12 months while a full consultation and review on a permanent approach to tariffs is undertaken.
Out of around 1,000 tariff lines for imports of textiles and fashion, 80 product codes will have a duty rate of up to 12%. These products include men’s blazers, T-shirts, women’s underwear, baby garments, jeans and polo shirts. The rest will not have any tariffs.
Adam Mansell, chief executive at UKFT, has warned of the impact the new tariffs will have on UK manufacturers and exporters: “In the event of a no-deal Brexit, all imports of yarn and fabrics will become duty free, which isn’t the case at the moment.
“However, what hasn’t been highlighted in the schedule is that the situation will then be made extremely difficult for UK manufacturers and exporters because they will face even harder tariffs. For example, an Italian woollen manufacturer will be able to sell into the UK at a 0% tariff. But UK manufacturers would face up to 12% tariffs when exporting into the EU.
“This is the missing piece of this tariff schedule. There is nothing to help manufacturers or exporters.”
The UKFT has said the move is positive for importers of yarns and fabrics, but at the expense of UK manufacturers and exporters.
Mansell also warned that products being imported and exported between the UK and Turkey will be affected: “We are also very concerned that the Government has completely failed to replicate the deal the EU currently has with Turkey. Turkey is a major supplier to the UK fashion industry and under this proposal many imports from Turkey would be 12% more expensive overnight.”
The UKFT was strongly critical of the short notice with which the changes were announced.
Mansell added: “This is a very significant change and if we do leave without a deal, leaves businesses with very little time to prepare. There will be product on the water now that will be affected by these potential changes.”
The UKFT said the government has replicated the EU’s generalised scheme of preferences (GSP), which provides developing countries preferential access to the EU market through reduced tariffs.
Mansell said: “It is a really good thing that this deal has been replicated because very large retailers will be able to carry on duty free from countries, such as Bangladesh.”