How Might Brexit Affect the Global Fashion Apparel Industry: Discussion Questions from FASH455

brexit

#1 Why should or should not globalization be responsible for Brexit? Does Brexit suggest that globalization is in retreat? What is your view?

#2 What could be the worst scenario of “Brexit”, particularly for the fashion apparel industry?

#3 Why should or should not UK maintain the trade preference programs established between EU and developing countries (such as GSP) after Brexit?

#4 How might Brexit affect the fashion apparel supply chain in EU and rest of the world? Who might be the winners and losers?

#5 What could garment factories in Romania do to mitigate the potential negative impacts of Brexit?

#6 Overall, from the case of Brexit, how do you understand that textile and apparel is a global sector?

[For FASH455: 1) Please mention the question number in your comments; 2) Please address at least two questions in your comments]

Author: Sheng Lu

Professor @ University of Delaware

62 thoughts on “How Might Brexit Affect the Global Fashion Apparel Industry: Discussion Questions from FASH455”

  1. 2. In my opinion the worst possibility that could result from BREXIT would be that lower income nations lose out on trade possibilities with other nations. They might no longer be able to afford the cost of trade from BREXIT leaving them further in the dust for their economy

    1. I think this is definitely a big result that will come from Brexit despite the fact that the UK has offered duty free access for good to around 48 developing countries once it leaves the EU, but even this won’t necessarily help the UK because then they are dealing with mainly developing countries and I am not sure how long they could ultimately sustain relying on just those countries without eventually having to sever that duty free access offered. So it could be a two way street between them

  2. 2.) The worst scenario for Brexit would be that WTO’s MFN rates would take place and businesses could greatly struggle with the additional supply and labor costs that may increase.
    6.) Overall, from the case of Brexit, I understand that textile and apparel is a global sector because not only does the exit of Britain from the EU affect all EU countries and Britain, it affects all countries because of the trade development programs that have been established and how Brexit could greatly affect the trade programs between Britain and other countries.

  3. #2: Increased labor costs because of work permits require for EU workers in the UK.
    #3: The UK should maintain trade policies with the EU so that the EU remains keen on creating individual trade deals

  4. 2. The worst scenario of Brexit for the fashion industry would be that fashion companies in the UK would not be able to survive due tariffs and rising costs. Also, other countries may not want to do business with fashion companies in the UK due to the value of the pound.

    1. I completely agree, the beauty of the EU was to make trading easier between the participating countries, but with the UK leaving, how will this effect the remaining countries still involved in the EU?

      1. The other countries involved in the EU will no longer be able to follow the same policies in regards to the UK, especially in terms of tariffs.

  5. #2. Pertaining to the fashion industry, the worst scenario of Brexit would be the increase of tariffs on clothing, affecting many of the shoppers. Supply and labor costs will also increase which will affect the decision of how fashion businesses will deal with the additional costs.

    1. I agree with this completely , leaving the EU is going to come with extra costs to the UK , which will effect their economy and its people.

    2. I agree. When tariffs increase it leads to a domino effect. The prices of many other things are increased as well such as labor costs and price of goods sold to consumers. This could potentially lead to an overall decrease in the success of the fashion industry.

  6. 3) I think the UK should maintain trade preference programs established between UN and developing countries even after Brexit in order to avoid conflict and prevent having tariffs.
    6) Brexit proves that the the t&a industry is a global sector because just by the UK leaving the UN so many other countries were effected, even outside the UN.

  7. Leaving the EU causes various issues throughout the economy and within the fashion industry .The worst scenario for the fashion industry would be the increased cost of doing business and creating various trade deals with different countries/businesses.

  8. 3. The UK should maintain the trade programs between the EU and other developing countries because of the implications that would come as a result to cutting ties. Not only would the UK affected, but the rest of the world. Being that London is one of the top fashion cities in the world, the fashion industry’s imports and exports from there will not be filled with tariffs and increased prices.

    1. 5. As we discussed in class, Romania has a few options to mitigate the negative impacts to Brexit. Because of the cheap labor promised by Eastern Europe, Romanian factories were left scrambling to increase production to make up for the lost earning. I feel as though Romania needs to look else where for work other than the UK. China, the US, and clients elsewhere in Europe are also in the manufacturing business or looking for manufacturers. Expanding their search beyond the UK will increase earnings and production needs.

    2. I completely agree that the UK should maintain trade programs already established between the EU and other developing countries. Completely abandoning the positive trade programs already established would cause too many implications to arise on both sides.

    3. I completely agree that the rest of the world would be affected, especially in regards to London being one of the top fashion cities in the world. This is not a county that has little to do with the fashion industry, it is a huge player.

  9. 5. Romania could try and improve its trade by creating new contracts with nations to stay in the trade with the rest of the world. They need it badly for their economy. They could try to introduce new contracts with brands, factories, producers or suppliers as well.

  10. #4 it could result in the slowing down of the supply chain by cutting off manufacturers and other member of the supply chain that are linked to fashion businesses in the UK that may not longer be able to afford to work with those UK fashion businesses because of the resulting possible increases in tariffs

    #5 they could work on merging businesses to become big enough to be certified or can try to establish business in neighboring countries that can become a middleman to the UK

  11. #5: Romania must look to source for other countries besides the UK. They must find a stable, economically strong country that they can depend on to consistently source for.
    #6: Textile and apparel is a global sector due to the fact that when one country changes policy, it impacts many more countries besides just their own. In the case of Brexit, Romania and Bangladesh will suffer.

  12. 2) One of the worst scenario’s that could come of Brexit, is that EU charges extreme tariffs on the UK when it comes to trading. This could potentially negatively effect the UK’s economy because they still are a major exporter of apparel.

    5) Romania to avoid the negative impacts of Brexit is to make a deal with the UK as far as trade goes, to avoid the possible tariffs and charges that could come from the UK leaving the EU. This would help benefit the UK and Romania helping out both of their economies.

  13. #3 – The UK should not maintain the trade preference programs established between the EU and developing countries because in the article it discusses how there are no benefits for British businesses.

    #5 – In order to mitigate the potential negative impacts of Brexit Romania can look into other countries for business. Romania can also try to negotiate with the UK to create a better work environment such as receiving higher wages for the factory workers and in return the Romanian factories will stick with working with them if they exit the EU.

    1. I agree that there does not seem to be any benefits for British businesses which brings me to wonder if the UK is being selfish and focusing on the country as a whole without considering the components that make it so successful such as these businesses

  14. #5. Garment factories in Romania can try to mitigate potential negative impacts of Brexit by trying to remain competitive with other factories as well as being open to doing business with other countries in order to grow what they are producing in order to afford paying workers and bills necessary to keep the factories running

    #6. Apparel and textile industries are a global sector because we do source different things such as fibers, accessories, clothes, etc. from different countries. Some countries have better ability to produce certain things than others so it is more economically feasible to work together to get a finished product to present to consumers at prices they will pay.

    1. I agree with your comment to question #5. Romania will need to find new customers, and quickly, to make sure they do not decline too quickly from a loss of business from the UK. They will need to remain strong and competitive to keep the factories open and their citizens employed.

    2. I agreed with you about question #6! The apparel and textile industries are definitely a global sector. We each have our own specialty, so we would exchange what we have for something that we don’t have, and this is what make this world so unique!

  15. Number 2: The worst scenario of the Brexit would be that the taxes are increased and then clothing prices are then increased and then the price of clothing in the UK would be much more than it was before. The UK might also not be able to afford these increase in taxes and might not be able to get certain goods imported anymore.

    Number 3: The UK should maintain trade preferences between the EU because if it is changed prices for many imports could increase which would then increase what the UK would have to charge for these products. It would not be a good scenario for anyone.

  16. 1. I don’t believe that Brexit suggests that globalization is in retreat, however I do think it challenges it and will certainly affect how the EU interacts within itself, with Britain, and with the rest of the world. It could be argued that globalization is to blame, as the T&A industry, in particular, becomes more and more global, it challenges relationships between countries that source from one another, both in a product sense as well as in service. It is interesting to wonder whether or not the world is becoming too global, and that Brexit is an attempt to separate themselves from extreme globalization.
    2. I believe that the worst case scenario for the fashion industry with Brexit would be that anything labeled “Made in the U.K.” or sourced from the UK, would become tariffed within the EU, which may eventually lead to a trade war within the EU and with the EU and other countries. This could ultimately cause a spike in prices of garments that have any part of them sourced from the UK, which is something that the T&A does not need in conjunction with the proposed tariffs from the Trump administration.

    1. I agree with what you said for #1 that globalization isn’t in retreat, but it definitely might cause some challenges down the road. It will be interesting to see what happens.

  17. #1 Why should or should not globalization be responsible for Brexit? Does Brexit suggest that globalization is in retreat? What is your view?

    I feel like Brexit is a sign that shows the UK is trying to keep away from globalization itself. Maybe the UK think the globalization is not actually benefiting their country and they want to stop the spread of the globalization impacts.

    #5 What could garment factories in Romania do to mitigate the potential negative impacts of Brexit?

    Brexit will definitely hurt Romania’s business’ benefit. To overcome it, like what the article said, I think they should increase production to cover lost earnings and searching for clients elsewhere.

  18. #2 – The worst scenario of Brexit would be that taxes are raised for everyone, not just the UK. If they were to go through with Brexit the entire fashion industry would have to adjust changing where clothing comes from, how it is manufactured, and the prices of products. This would create a negative effect on the fashion industry because people do not want to pay more and it would complicate the trading process between countries.

    #6- After learning about Brexit it became very clear to me how much the fashion industry relies on global trade. The fashion industry is connected between every country, in every part of the world; so when one country wants to exit out of the agreement, it not only effects that country but the entire world. We rely on one another to keep the industry running and profitable. It is successful in unison with each other and any disruption to that would be terrible for the industry.

    1. I completely agree with your point about raising taxes. And if we think about this in terms of the United States, it might cause a lot of clothing companies to raise prices or be forced to go out of business in the long term. The fashion industry definitely does rely a ton on global trade and it’s very interesting to see how one thing can cause a ripple effect of changes in many different countries. Great points!

  19. #4. The fashion apparel supply chain in EU and the rest of the world will be affected by Brexit when it comes to the goods traded between the EU and UK, and also the UK and other non-EU countries. These goods will be subject to increased tariffs which will be a negative effect on the trade. Businesses will lose out on this because they are prone to the increased custom rates. Brexit will seek victory because they are putting the strain on the businesses.

  20. #5 What could garment factories in Romania do to mitigate the potential negative impacts of Brexit?
    – As stated in the article, one textile factory owner chose to pull out completely after the end of their contract and begin a factory in the Swedish Furniture industry in order to mitigate the negative impacts that Brexit would have had on his textile factory and production. Therefore some garment factories in Romania may choose not to renew their contracts just as he did, causing the garment industry to take a huge hit.

    #6 Overall, from the case of Brexit, how do you understand that textile and apparel is a global sector?
    – After reading about the case of Brexit, I now can see how something such as the British Exit from the European Union can affect so many other countries and industries around the world down to something as small-scale as wages in a factory in China, all from a change in the value of the British pound. A change such as this affects many other countries in ways that are not always clear at first.

    1. I agree with Taylor on how so many countries get affected by the move another country makes and it can either make or break another country in the process!

  21. Question 1: What could garment factories in Romania do to mitigate the potential negative impacts of Brexit?

    Because the factories in Romania are so small they have very little power to help them selves with the costs of Brexit. Most of them are too small to afford certification and are also too small to persuade or interact in new trade deals. I think the best option for them to avoid losing business and closing down would be to merge factories/companies so that they can be bigger and more powerful and will be able to afford certification.

    Question 2: Why should or should not UK maintain the trade preference programs established between EU and developing countries (such as GSP) after Brexit?

    The UK should maintain the trade preference program because with out they are at risk of losing many trade deals and interactions between certain countries, and they will also be at risk of losing businesses in their own country if they are not able to trade successfully where they have consistently been trading. They face the risk of having to pay new custom tariffs when not being supported by the EU any longer.

  22. 6. Brexit shows that the textile and apparel company is a global sector because so many big fashion companies such as Burberry are based out of the UK so any negative impacts to them would affect the entire fashion industry. Also, Brexit would affect other countries doing trade with the UK in terms of the fashion industry through tariffs. Also, when one company changes their policies, especially when they were part of something much bigger like the EU, this will undoubtedly impact many other countries that do business with them.

  23. #2 I think the worst case scenario for the UK is if they cannot formulate a trade agreement on their own with the EU and other countries by March of 2019. If their exports fall, it will not be good for their economy because that is one of their strongest parts of their economy. The labor costs will increase, causing clothes and other products to increase.

    #5 Romania will have to start to find other countries to export their products to. They will have to make up for the lost sales from the UK.

  24. #2. One of the worst scenarios resulting from BREXIT would be that lower income nations could struggle greatly with additional supply costs and lose out on trade with other nations.
    #4 Brexit would affect the fashion supply chain in EU because UK fashion businesses rely on workers from the EU. Restrictions on these workers could lead to shortages of labor which later effects profit margins and operating budgets of businesses

  25. #2 The worst scenario for Brexit would be to have it completely back fire on the UK and rather than creating a strong economy, it will harm it by driving prices up for apparel and its consumers. If prices are forced to go up due to changes in sourcing and manufacturing, then that will affect what consumers are willing to pay and possibly drive them away from British retailers/fashion.

    #5 Romanian factories, should begin to look outside of the UK for support when it comes to production. The textile factory owner Alin Benta in Romania did just this when he began producing upholstery for IKEA, a Swedish business/brand, and was able to keep his factor running. If other factories begin to take the same approach then maybe they will be able to keep their factories running until they are in the clear. It may be hard at first and not look like it is worth it but at least they would continue to stay in the loop and keep their employees employed for as long as possible.

    1. I agree with your answer to question #2. I think that if they do not form strong trade agreements, it will cause the prices to raise and potentially make consumers stop shopping at UK retailers.

  26. 2. The worst case scenario of Brexit would be for import tariffs to rise significantly higher as well as labor costs would increase. It would be hard for the apparel industry to cope with these extra costs.
    4. Brexit would have a long lasting affect in the EU because costs would be higher, trade negotiations would have to be redone and labor and supply would increase. Also, the issue with priority in immigration being given to students and highly skilled workers would leave many without jobs and money to support themselves and their families. The losers are businesses that have to cope with higher tariffs but also the workers who are trying to find jobs even though the labor costs are higher.

  27. #1-
    Globalization should be responsible for Brexit because of economic dissatisfaction, unease with globalization and immigration. Brexit is a major issue that remains a top concern.
    #6-
    Textile and apparel is a global sector because it takes any different countries to produce textiles and garments. A large portion of UK exports are for the EU. For the UK to continue trade with EU members, the products will have to meet EU qualifications.

  28. 2. If the Brexit were to happen, it would result in an increase in costs for labor, materials, shipping, and products. The UK would need to start over and make new relations with other countries as well as come up with new trade agreements. This could also be beneficial for the UK. New relations could mean new products and exclusive agreements.
    6. If the UK and EU were to separate, not only would they be affected but also other countries involved in acquiring those goods. Over 60% of the UK’s exports were a result of their trade agreement with the EU. If they separate, the UK loses those exports (forced to move elsewhere) and the EU will need to find somewhere new to import the goods from.

  29. 4.) To answer question number 4 Brexit will affect the fashion supply chain in the EU and the rest of the world because they are also breaking off relationships with other countries that relied on them to work and provide them with goods. For example in the article it talks about how Romania is getting hit pretty hard due to Brexit and having to deal with hundreds of thousands of workers losing their jobs and struggling to find work else where when they have been so dependent on other countries. The article only touches upon Romania but they are not the only ones being effected by this many other countries with trade agreements with the UK are also feeling the repercussions of Brexit.
    5.) To answer question number 5 I believe Romania is going to have to put themselves out there to other countries and make more relationships to keep their factories open. It says they partnered with IKEA in Sweden but they will need to keep contacting other companies in other countries to show that they can be a contender as well in getting companies the goods they need. But to keep their factories open they will need to make these relationships fast which could be hard to do when so many companies have their set country that they go to for a certain product. But this can only be a good challenge for them to put their name out there and open new doors to other countries and get people in Romania their jobs back.

    1. I totally agree with you about Romania should build up relationships with other countries. I think France has big potential for Romania because as we all know France is the world largest fashion industry, which France also in the EU membership. Thus, if Romania and France have the business relationships that may bring great profit and high technology to Romania’s factories.

  30. #2) I think the worst scenario of “Brexit” in the fashion apparel industry is not only Britain’s economy will suffer but it puts a strain on other countries as well. Countries won’t be able to trade as easily with Britain which will in return make globalization suffer and economies of the countries suffer. If trade is hard people will not be able to get resources that they need to produce products so they won’t be able to provide them to customers.

    #4) Brexit will affect the apparel supply chain in the EU and the rest of the world like a domino effect. For starters, many of the apparel industry workers are foreign and with Brexit being in place immigration restrictions will be put into affect. This will make the supply chain harder because they will lose a lot of their workers to produce their products. As for the winners and losers in this situation, I think the winner for this case would mainly be Britain to an extent. After breaking away from the EU they will be able to set their own laws and regulations but that doesn’t mean it won’t come without struggle. I think the losers in the situation are countries that work for Britain’s apparel industry (such as Romania). They will be affected because their jobs will be cut, wages will be low for the amount they work, and this will cause many difficulties for their economy.

  31. #3 The UK should maintain trade agreements with the EU and other countries after Brexit because the UK will need to keep their economy strong by exporting products. They will need to start off as a strong economy once Brexit occurs next March.

  32. #2The worst scenario of “Brexit” for the fashion industry is that prices for consumers to rise. Causing consumers to not spend their money on retail.
    #4 Brexit may cause factories to shut down, make it hard for people to get jobs & make trade difficult causing prices to rise for both producers and consumers. Brexit will be the winner and consumers will be the losers.

  33. Question 6: Overall, the textile and apparel is a global sector because it will always impact the world around us. Not only in this article did globalization affect EU and Britain, but in reality, trading with countries will affect the world when it comes down to sourcing and apparel products. Textile and apparel sectors are a huge part of the world and greatly affect companies and those trading to make their products.
    Question 2: Brexit could affect trade and sourcing of apparel products and put goods at high risks which then be facing tariffs, duties and barriers to trade. If Brexit were to leave, they would definitely have an impact on the apparel industry as said in the article when the UK decided to leave the EU it in fact impacted Bangladesh’s garment exports which could lead to other country’s getting impacted as well. So exiting could be the worst scenario for the apparel industry.

  34. #2 The worst scenario for “Brexit” would be they would no long be under the shelter of the EU. For instance, the child will not be protected by the mother. They would most likely need to pay for many different things like the importation tax within the EU. This is something that they didn’t need to when they are importing goods within the EU.

    #Garment factories in Romania should look out in the world and try to find more than 1 stable big boss (UK) for their business. They should definitely seek out and find other countries in Europe or Asia for business. This way even if they lose UK, they will still have other countries to work with, and continue to expand and develop their country.

  35. “#3 Is the UK fashion industry a winner or loser of Brexit? What is your evaluation?”

    I would say that there is not a 100% winner or loser of Brexit. Since Brexit caused a lot of issues to deal with, the result will be different when discuss in different perspectives. UK now have to sort many ways out in order to maintain their economy status no matter through trade preferences or relationship between nations, in my opinion, if UK fail to maintain good relationship between nations, I would say UK is the loser of fashion industry of Brexit. From another perspective, if Brexit could stimulate UK’s economy or even trade activities between nations, then, UK will likely to be the winner of Brexit.

  36. #6 Overall, from the case of Brexit, how do you understand that textile and apparel is a global sector?
    It’s interesting to see how one country leaving the EU not only affects all the other EU members, but also countries outside the EU such as Bangladesh. This shows how global the apparel and textiles industry is. The U.K. leaving the EU could have serious effects on the economies of those countries who rely on trade with England.

    #3 Why should or should not UK maintain the trade preference programs established between EU and developing countries (such as GSP) after Brexit?
    It’s hard to say whether it would be more beneficial to keep trade agreements with these developing countries, or to adjust them to make them more balanced. These LDC’s fear that tariffs, barriers and duties will be imposed, which will hurt their economies significantly because of their economic vulnerability and their trade dependence on Britain. Although this can hurt LDC’s and their economies, the U.K. looks to establish favorable trade with other countries by leaving the EU, and may need to change trade preference programs with LDC’s in order to see the benefits of Brexit.

  37. 5. Romania factories have to increase production to cover lost earning and searching for the clients elsewhere in Europe. Nowadays, the garment factory in Romania changes their market to Europe by 30 percent.
    4. Brexit has influences on workers salaries, factories’ working conditions, and volume of productions in the developed counties. Workers have to produce more items when paying the same salaries as before. More and more small and medium-sized factories cannot survive in such severe competition, which led them to close down.

  38. #1 Why should or should not globalization be responsible for Brexit? Does Brexit suggest that globalization is in retreat? What is your view?

    I do not think that globalization is responsible for Brexit, I think that GB wants the freedom to make their own financial and trade related decisions and not have to go along with what is best for the EU. Also GB is is a financial position where they do not need the support of the EU like countries such as Italy or Greece, they are wealthy enough on their own and could even be currently held back the EU. This situation is just specific to GB and does not suggest that globalization is in retreat.

    #6 Overall, from the case of Brexit, how do you understand that textile and apparel is a global sector?
    The textile and apparel industry is in the global sector because the lifecycle of a garment passes through several different countries before making its final destination. People from all over the work on one garment from the growth of the fiber to the construction of the garment to the design of it. Fashion is a global industry also because consumers can purchase from any company regardless of progin bc of global shipping capabilities.

  39. #2 Though not likely to get to this point, I believe the worse case scenario for Brexit would be that the UK could end up in trade wars with countries they once did great business with such as Romania. For the apparel industry, this could mean high tariffs and ultimately, higher retail prices for consumers.

    #6 From the case of Brexit, I understand that textile and apparel is a global sector because the production of a single garment can require the involvement of multiple countries in order to obtain all materials required.

  40. #2 In the UK, the worst scenario maybe the inflation because of the higher tariffs for trading clothing import to the UK which the UK companies may lose money hand over first or they may increase the selling price to offset their loss. And finally, the economy may go down as not many consumers willing to buy the high price products and many companies may closed. At the same time, EU countries may lose one of their economic supporter – UK, and they may also have some impact on the economy.
    #3 UK should maintain the trade preference programs established between EU and developing countries after Brexit because this can minimize the negative impacts from the Brexit. So the UK can maintain as much as possible of their original economic status.

  41. Question #3: The UK should maintain trade preference programs established between EU and developing countries after Brexit. They should maintain these trade programs because the UK already knows that they can rely on these countries for trade. After Brexit, if they were worth to leave all these trade preference programs that are already established they would have to create new trade programs and most likely pay higher tariffs for goods from other countries because they wouldn’t have the relationship that the UK already has with these other countries.
    Question #5: Garment factories in Romania could start creating relationships with other countries other than the UK because once Brexit is passed the UK will be importing less into their country then they were before and there may be increased tariffs on goods.

  42. #2 There is a possibility that Brexit may completely destroy the apparel and textiles industry. A “worst case scenario” would be the consistent closing of factories due to workers’ poor conditions and low wages, and an increase in prices in store. Consumers will not pay for apparel that has ignored the drop in value of the pound, which would allow a price increase. This will cause multiple businesses to halt operations which stops the ability to maintain stores. Will they even be able to obtain the yarns/fabrics/apparel from other countries who specialize in things they do not?

    #4 The EU and less developed countries will not receive resources from major allies such as Bangladesh since their strong ties with the UK will be weakened. It will be immensely expensive to export to the UK, so industries on both sides will suffer. Bangladesh needs the UK to keep a stable economy, as do poorer countries. EU will be the winners and most countries should see a drop in sales harmed relationships with the more powerful countries.

    #5 Benta did the right thing by reevaluating their sales and allocating their resources to a new market. Their target market were British clients, but since the pound’s value fell, finding other prospects and forming new relationships that have growth potential was the best idea. Romanian factories should look elsewhere for business and form relationships with thriving companies and other sectors. They should probably even reevaluate what they create specialize in. Factory workers have already started to find work elsewhere, like in France, and should search for ethical business practices while receiving a decent salary.

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Google+ photo

You are commenting using your Google+ account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s