21 months ago, I excitedly wrote about the implications of Britain’s Brexit vote to leave the EU. On March 19, the UK and EU agreed a provisional transition deal on their relationship from March 2019.
A deal that’s weirder than any of us imagined in 2016.
Where did that Brexit go?
About a third of Britain’s clothing imports are made – or at least have some value added – in other EU countries. Almost as much again arrives from Asia at continental ports like Rotterdam, passes through customs there and then travels straight to retailers’ warehouses in the UK.
If Britain had announced last week that it was really going to leave the EU next year, the effect on its apparel industry would have been completely disastrous.
The country imports a higher proportion of the clothing it wears than of the wine it drinks or the Mediterranean vegetables it eats – and most would have had to come through British customs posts there aren’t even plans yet the government can fail to be late in delivering.
So what’s going to change next March? More or less nothing.
Even the widely-publicised proposal to change the colour of Britain’s passport seemed to have been forgotten (though it later emerged they would be printed – in France). It’s not clear how long nothing will change – but for the foreseeable future, the most controversial issue seems to be who’s going to set catch limits for fishermen.
The provisional deal
Though the whole agreement is still provisional – and most of it incomprehensible – traders should assume that, as far as our industry is concerned:
- For the foreseeable future, there will still be free movement of people between the UK and the rest of Europe – including designers, shop staff, multilingual help desk operators and potential garment makers.
- Clothing will continue to move across borders between warehouses and customers throughout the current 28 EU member states without going through customs checks.
- Apparel from outside the EU will still be cleared for UK customers at whichever EU frontier post most suits the shipper.
- The UK will continue to act as members of the same free trade deals as the rest of the EU, and offer the same duty concessions to poor countries, with the same rules of origin, as the rest of the EU.
The longer term
It is also clear (to me, at least) that the Brexit negotiation process has thrown a new light on Europe’s attitude to trade with the rest of the world.
- The EU has agreed that the UK can begin looking for partners to sign “UK only” trade deals with. Apart from the US (well, apart from Trump), no-one has shown any interest. Few sane people will start negotiating any kind of new trade deal with the US while Trump is in the White House.
- Whatever separate negotiations the UK might start with countries like Singapore, say, or Chile, any agreed deal is going to be virtually identical to the deals those countries sign with the EU – and with EFTA (the European Free Trade Association), the EU’s mini-me,
- We can expect the UK to more or less mirror the EU’s stances in any trade spats with Russia, India or China. As well as in any trade agreements with countries like Canada or Japan.
- In the long run, the UK, EFTA and EU will turn into one big single market (possibly called the Union of Europe), with one big more-or- less universal trade deal with the TPP11 (probably, once Korea joins, the TPP12); a slightly less ambitious deal with the US; and more-or-less free trade with its immediate neighbours (like Turkey, Morocco or Israel).
- How long is the long run? Possibly long: possibly not.
Ordinary UK citizens, meanwhile, will find the important things stay unchanged: we’ll still be able to stock up on limitless tax-free booze – and take continental cheese and spring cherries home without some official inspecting us. Though anyone with a store like the Charlbury Deli handy would be nuts bothering.
Brexit – which at least half the population voted for so recently – has just vanished.
But who cares?
In the short run, not only is nothing going to change; no-one seems interested. The Daily Mail, for example – once the most feared pro-Brexit British tabloid – didn’t even put Brexit on its front page. Instead, it carried a story about an alcoholic TV star.
The end result will be at best lip service to the idea of leaving the EU. It’s been called Beano (Brexit Existing As a Name Only) – which in the UK refers to a children’s comic, and in the US to a range of things of mind-boggling insignificance. A dietary supplement that prevents flatulence, for example.
And there’s the real importance of this non-story. To most people outside Britain’s media bubble, it’s been obvious for months that nothing was going to happen.
Was the Brexit obsession just a bad dream?
In a way, it has always been.
Six months ago, for example, I spoke at a Brexit conference organised by the Association of Suppliers to the British Clothing Industry – precisely the businesses you’d have thought would be most interested in Brexit.
It was an exceptionally stimulating conference. Apart from the statutory Flanarant and the unreadable charts from the statutory accountancy firm now claiming expertise on everything but accountancy, all the speakers were real practitioners.
All enthusiastic about how they made and sold clothes. And, though they’d been told to talk about Brexit, hardly any could find time to. Nor did the audience want to ask questions about Brexit.
Of course, there were the inevitable students researching the dissertations on Brexit they’d decided on a few months earlier. But even they’ve been getting more concerned lately about non-Brexit issues
Especially why no-one’s buying clothes any more.
Meanwhile, the media remained obsessed with Brexit.
Till seconds before this week’s announcement UK media were still parroting the preposterous myth that “everyone” had been surprised at the result of the Brexit referendum.
But since over half the population had voted to leave, it couldn’t have been much of a surprise to most voters. The media told us the result showed opinion polls were unreliable – though for the week before the vote, the polls had been predicting exactly the result that happened. Though admittedly it needed a bit of familiarity with how opinion polls are conducted to realise that.
Is it possible that it’s not the opinion polls or politicians out of touch with the voters, but the media?
And is it just possible that no-one’s buying clothes anymore because too many of our retailers have become preoccupied with what sounds good to journalists, and lost touch with their customers on the way?
Over the next few weeks, we’re going to be examining here the real problems in the West’s clothing industry.
Because I’m convinced there’s one huge problem that’s rarely discussed – but is central to the reason our industry in the UK and US is in its current mess it’s in. And, to an extent, to the reason why the people who make our clothes – whether in Shanghai or Leicester – probably aren’t receiving a fair share of the value added during our clothes’ manufacture.