More than four years after the UK voted to leave the EU, the UK and the EU finally reached a historic trade agreement on Christmas Eve 2020. This agreement will exempt bilateral regional trade between the UK and the EU from tariffs.
December 31, 2020 is the day when the Brexit transition period is originally scheduled to end. If the UK and the EU fail to reach a trade agreement before then, the two sides will conduct trade under World Trade Organization (WTO) rules, which will cause huge economic losses to both parties.
Specifically, under the tariff requirements under WTO rules, British clothing exported to the EU will be levied a 12% tariff, while shoes will be levied an 8% tariff. . Therefore, the “rush hour” trade agreement between the UK and the EU exempts all import and export industries from tariff requirements under WTO rules, including the clothing and footwear industries.
The U.K. Fashion and Textiles Association (UKFT) welcomed the trade agreement. On December 24, the association stated in a public statement, “The EU is the largest market for the British fashion and textile industry, and we can breathe a sigh of relief with the conclusion of this agreement. This agreement can provide British exports to Europe and the United States every year. Saving £7.4 billion on fashion and textile goods will also help save thousands of jobs and save hundreds of businesses.”
Walpole, the British Luxury Industry Association, is also concerned about This new trade agreement expresses support. Helen Brocklebank, chief executive of Walpole, said in a public statement, “The agreement signed today between the UK and the EU will be a huge relief for British luxury brands. Based on this, and the government’s commitment to provide a new coronavirus vaccine, everyone will be optimistic about the future of 2021.” The outlook is more optimistic.” Many luxury retailers, including the Harrods, the famous British luxury department store, are industry members of Walpole.
In fact, the reason why negotiations between the UK and the EU on a post-Brexit trade agreement have taken more than four years is largely due to the slow progress of marine fisheries negotiations between the UK and the EU. relation. Although the influence of the two countries’ fisheries is self-evident, the contribution of the British fashion and luxury goods industry to British GDP is obvious to all.
The British “Financial Times” commented that “the British fishing industry does not contribute as much to the British economy as Harrods.” According to the British Fashion Council (British Fashion Council) in September 2019 According to data provided in March, the fashion industry alone contributes 32 billion pounds to the UK’s economic GDP every year, with 890,000 employees in the industry, which is approximately the same size as the UK financial industry.
Therefore, the tariff-free agreement finally reached between the UK and the EU is a great benefit to the British clothing, textile and luxury goods industry. However, these industry associations also admitted in their statements that these agreements were not a perfect agreement, and they urged the British government to do more.
The British Fashion and Textile Association said, “Clothing and textile companies still have a lot of work to do, because the trading environment with the EU will develop greatly as a result of the agreement. UKFT urges the government to actively help the industry cope with short-term challenges and invest in the long-term future of the industry.”
Brocklebank, which represents the British luxury goods industry, also added that British luxury brands ” “Committed to succeeding after Brexit, we know we are one of the UK’s most valuable and attractive assets. And a big part of that success depends on the Government striking strong free trade agreements with the US and other countries.”
Brocklebank said that the British luxury goods industry hopes to see the government implement a robust post-epidemic recovery plan after Brexit, especially to propose specific action plans for retail and hotel industry assistance. , and at the same time, come up with marketing tools to attract foreign tourists to return to the UK quickly.
In fact, the pressure on tax policy changes encountered by the British clothing and luxury goods industry not only comes from whether a free trade agreement with the EU is reached or not. Jiemian Fashion previously reported that the British government announced in September 2020 that it planned to withdraw the “VAT retail export scheme” for non-EU international travelers on December 31, 2020.
This means that starting from 2021, goods purchased in the UK by non-EU international travelers will not be able to obtain VAT refunds at the UK exit port. This policy mainly targets fashion, accessories and beauty products, which will undoubtedly have a great impact on the British fashion industry, which is famous overseas.
The VAT refund policy is an important factor in attracting international tourists to the UK for tourism and shopping. Once revoked, it will undoubtedly weaken the UK’s competitiveness in the international tourism industry. Michael Ward, managing director of Harrods, previously said in an interview with the Financial Times, “Major luxury brands have told us that they will stop investing in London if the VAT plan is withdrawn.” </p
