How has Brexit affected Home Decoration & Home Textile imports?

The United Kingdom is a leading European market for Home Decoration and Home Textiles (HDHT). Now that the country has left the European Union, how has the British import market for HDHT products from developing countries been affected?

The British HDHT import market

With annual imports of about 18-20 billion euros, the United Kingdom is a vital HDHT market. It is also the only European importer to source most of its HDHT imports straight from developing countries, 57% in 2020. For home textiles specifically, developing countries supplied an impressive 69%. Reasons for this include historical ties with supplying countries and the convenience of direct trade for an island nation like the United Kingdom.

In 2020, British HDHT imports decreased by 13%. This was considerably more than the average European decrease of 7%. From 2016 to 2020, British HDHT imports decreased on average 2.6% per year. Meanwhile, European imports increased on average by 1% each year. The COVID-19 pandemic has clearly influenced international HDHT trade and contributed to a historical decrease in British GDP in 2020. But the difference in imports suggests Brexit may have also played a role.

The new trade deal

The United Kingdom officially left the European Union on 31 January 2020. After a transition period, the new EU-UK Trade and Cooperation Agreement took effect on 1 January 2021. This created a new relationship between the United Kingdom and the European Union. Because of this, British trade with the European Union now has to follow new customs procedures.

The new procedures have caused delays and extra paperwork, and unexpected costs. In January 2021, the value of goods imported into the United Kingdom from the European Union decreased by 35%. Unsurprisingly, 80% of British businesses in the goods sector reported negative impacts in a survey from the Netherlands British Chamber of Commerce in March 2021. Import numbers have now somewhat recovered. Still, they remain lower than imports from non-EU countries. The customs checks introduced in January 2022 could lead to further disruptions.

Opportunities for suppliers from developing countries

As an HDHT supplier from a developing country, you can expect more direct trade with British buyers. Importing directly saves them money, paperwork and the delays of indirect trade via European importers/wholesalers. The decreased value of the British Pound since the Brexit referendum in 2016 also makes direct trade more attractive. The tariffs that apply to this depend on the United Kingdom’s new trade deals. But most of these are the same as the European Union’s agreements.

The latest predictions from the British Office for Budget Responsibility show the British economy returning to its pre-COVID level at the end of 2021. Combined with an increased interest in direct sourcing, this could create opportunities for HDHT exporters from developing countries. To benefit, you should build a direct relationship with British buyers. Also, market your product directly to them. For ideas, see our tips for finding buyers and tips for doing business.

Stay informed

To stay informed on the latest developments in the HDHT sector, subscribe to our newsletter. For more information on European HDHT trade flows, see our study on the demand for HDHT in the European market.

Globally Cool B.V. wrote this news article for CBI in collaboration with GO! GoodOpportunity and Remco Kemper.