How Brexit can streamline retail supply chains

How Brexit can streamline retail supply chains

Brexit can place UK retailers at the vanguard of nascent agricultural and manufacturing supply sectors in Africa, but only if the UK Government retains current tariff-free access to products from the continent.

That was the view of trustees and managing directors from some of Africa’s emerging garment markets, who urged the UK to strengthen ties with companies in Africa at the risk of losing a competitive edge to companies in the European Union (EU) and the US.

Speaking at a House of Lords event organised by non-profit trade facilitators Proudly Made in Africa, Baroness Lola Young of Hornsey said: The rapid growth in many African economies offers opportunities for greater sustainability in our value chains and there is a creative industries sector that adds value to African natural resources rather than exporting them raw.

As a trustee of the Aid by Trade Foundation, Young suggested that UK retailers could introduce shorter value-chains that are more transparent and manageable by implementing enabling trade tariffs with Africa.

Currently, garments from Africa benefit from tariff-free access to the UK market due to the EU’s trade policies. This gives products sourced from the continent price advantages ranging from 12% to 32% compared to similar items imported from China.

However, EU companies like Swedish retailer H&M – which has a sourcing office in Addis Ababa – and big name US brands such as Burberry and Calvin Klein have already made moves to enhance relationships with suppliers.

The UK’s impending departure from the EU has created waves of uncertainty throughout many legislative aspects, but through the World Trade Organisation (WTA), UK retailers can still tap into these shorter value chains outside of the EU.

The WTA’s Generalised System of Preferences offers legal routes for developing countries to gain non-reciprocal access to the British market. The system has already been utilised by the US, under the African Growth and Opportunities Act, to great effect.


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