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'No deal' Brexit to badly affect T&C industry: EURATEX

Nov '20
Pic: Shutterstock
Pic: Shutterstock
A ‘no deal’ Brexit would have a detrimental impact on the textile and clothing (T&C) industry, with job losses over 100,000 for 27 European Union (EU) nations and over 27,000 for the United Kingdom, a new study commissioned by the European Apparel and Textile Confederation (EURATEX) with the University of Leuven reveals.

Output losses for the UK would be 41.8 per cent of its value added in T&C production, while the EU-27 as a whole would lose about 9.7 per cent, according to an EURATEX press release.

Negotiators are making a final effort, but a ‘no deal’ can still occur if there is no timely ratification of the Withdrawal Agreement, or if the Withdrawal Agreement is ratified but no agreement on the EU-UK future relationship is struck before the end of the transition period.

A soft Brexit scenario would minimise the damage, but it would still disrupt European value chains and lead to heavy job losses. A soft Brexit would still be significant with, for United Kingdom, 4,759 jobs lost and an output loss of 7.3 per cent of its value added; while for the EU27, 17,786 jobs will be lost and there would be output losses of 1.7 per cent of its value added.

Under a no deal Brexit, the output losses for the United Kingdom would be 41.8 per cent of its value added in production, while the EU-27 as a whole would lose about 9.7 per cent of its gross domestic product (GDP). For the UK this corresponds to absolute job losses of 27 141 jobs, while for the EU-27 as a whole the job loss would amount to 101 756 jobs lost.

With no surprise, the largest share of the EU27 job losses take place, in decreasing order, in Italy, Romania, Portugal, Germany, France, Spain and Poland. Under a hard Brexit, about respectively 27 000, 12 000 and 11 000 jobs will be lost in Italy, Romania and Portugal, which corresponds to about 27 per cent, 12 per cent and 10 per cent of the EU-27 total working population in the sector.

However, as a proportion of the sector employment and value added in the country, Ireland, Belgium, the Netherlands, Sweden, France, Denmark and Czechia would be the most affected countries within the EU-27, both in terms of value added as in job losses.

For Ireland and Belgium, a ‘no deal’ Brexit would lead to respectively minus 23 per cent and minus 14 per cent of job losses in the sector and an output loss of minus 40 per cent and minus 25 per cent of their sector value added.

“These figures reflect companies’ legitimate concern with a no-deal Brexit. EU-UK trade relations are an essential component of their competitive business model, on both sides. For the T&C industry, we have offered a win-win solution (integrating the UK in the PEM Convention), which would limit disruptions in the T&C value chain to a minimum,” said EURATEX director general Dirk Vantyghem the study results.

Fibre2Fashion News Desk (DS)

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