The government's strategy must focus on finding opportunities for lowering import costs as well as avoiding any increase in tariffs, the BRC said in a letter to secretary of state for International Trade Liam Fox. The BRC pledged a positive and constructive approach to achieving the best possible outcome from the negotiations that are to begin in March 2017.
“We will be supporting the government through this complex and difficult process, helping them analyse how increased cost pressures on retailers could mean higher shop prices and identifying any opportunities for new trade deals that could benefit individuals and families,” BRC chairman Richard Baker said, launching the BRC's Brexit campaign.
“The retail industry is the UK's biggest importer, and has huge experience of importing from every corner of the world. We will be engaged in a constructive dialogue with government that will bring our experience to bear on the Brexit talks to the benefit of everyone in the UK,” he added.
In case of a failure to strike a good Brexit deal, the UK would have to fall back on the World Trade Organisation rules. This would mean that the new tariff rates that the UK would apply to imports from the EU would be highest for consumer staples like food and clothing. For example, clothing and footwear would attract tariffs of 11-16 per cent versus the current zero-rating for all EU imports.
Falling back on to WTO rules would also increase the cost of sourcing from beyond the EU. The import cost of women's clothing from Bangladesh would be 12 per cent higher. This contrasts with duty rates that would apply to raw materials and semi-finished products, many of which would be zero-rated or attract rates of duty of below 10 per cent, BRC said.
Stating that free trade agreements typically take five or six years to negotiate, BRC said the UK can adopt its own scheme of trade preferences (like GSP) for developing countries as soon as it leaves the EU. Such a scheme would not only be good for UK consumers, but also provide a great boost to economic development in countries like Bangladesh, Kenya and Sri Lanka. (RKS)
Fibre2Fashion News Desk – India
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