Prices will shoot up if UK fails to get EU single market access, retailers warn

Import duties will make food and clothing more expensive if government doesn’t negotiate a deal with Europe, says British Retail Consortium

Import duty on clothing could be as high as 16% from the current zero-rating for all EU imports, BRC says.

Import duty on clothing could be as high as 16% from the current zero-rating for all EU imports, BRC says.
Photograph: Alamy

The retail industry has issued a stark warning that prices of consumer staples such as food and clothes will shoot up if the UK government fails to negotiate a good trading deal with the EU.

Retailers are already facing rising costs that may have to be passed on to consumers because of the pound’s sharp fall since the Brexit vote, which has raised the price of imports. The British Retail Consortium (BRC) says prices will be increased further if the UK fails to negotiate access to Europe’s single market and has to fall back on World Trade Organisation rules.

The BRC says under such rules, the new tariff on imports from the EU would be highest for food and clothing.

“For example, the average duty on meat imports could be as high as 27%, while clothing and footwear would attract tariffs of 11-16% versus the current zero-rating for all EU imports,” the trade group said as it launched its “A Fair Brexit for Consumers” campaign on Monday.

Falling back on to WTO rules would also increase the cost of sourcing from beyond the EU, according to the BRC. The import cost of women’s clothing from Bangladesh would be 12% higher, while Chilean wine would be 14% dearer for importers.

The group has written to secretary of state for international trade, Liam Fox, calling for the government strike a deal with other EU countries that does not squeeze household budgets and to focus on lowering import costs and avoiding any increase in tariffs.

“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,” said BRC chairman Richard Baker.

“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.”

The BRC is the latest business group to call on the government to strike a favourable trade deal after worries grew over the last week that ministers would sacrifice access to the single market in return for stricter controls on immigration – a settlement that has become known as “hard Brexit”. Those concerns have pushed the pound to new 31-year lows against the dollar.

The CBI director general, Carolyn Fairbairn, has said Theresa May’s lurch to a hard Brexit stance risks destroying Britain’s hopes of remaining an open economy.

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