Textile production in the UK is declining as a result of Brexit. The trade between the EU and UK has witnessed a major drop in the imports and exports of textiles.
There has been a significant drop in the import and export of clothing articles, which will result in a trade loss of around €3.4 billion during 2022. However, according to statistics from the EU, despite a decline in the textiles & clothing industry, the UK is still an important market for most SMEs around the EU.
The textile industry is one of the most vulnerable industries to Brexit. There are many reasons for this vulnerability, including an overreliance on EU markets, lack of investment, increasing imports from China, and a lack of protection against cheaper imports from countries outside the EU.
Italy, Netherlands, Belgium, and Germany are the most impacted countries on the export side. However, Germany, Ireland, and France will be more significantly impacted on the import side.
Surprisingly according to the UK Fashion and Textile Association's around 71% of all companies currently procure textiles manufactured or imported from the EU market. Since the Brexit, all companies are facing increased freight costs and increased costs and bureaucracy for customs clearance which is not easy to swallow in any P&L. In fact, the importer, wholesalers & retailers looking to pass the increased costs on to consumers in the next 6-12 months.
EURATEX has called 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. It is causing considerable losses for textile companies in the EU and the UK.
Is this an opportunity for the Pakistan apparel market to jump in and fill the gap? An approximated gap of €3.4 billion needs to be compensated and should be addressed by everybody's business development manager how to position his product.