PCIAW®ONLINE Brexit Trade Deal Series
On 1st January 2021, the UK officially completed the transition period for the country’s exit from the European Union.
The PCIAW® joins Steve Zalkin, President of North American Association of Uniform Manufacture and Distributors (NAUMD) to discuss the new Brexit trade deal and its insights for America on Brexit and the impact on companies trading with the UK within the professional clothing industry. The NAUMD has been the voice of North American uniform and image apparel industries since 1933, including manufacturers, designers, producers, and retailers of uniforms.
Whilst businesses may welcome the certainty provided by a free trade deal being reached, companies need to adapt to the new rules and processes in order to continue operating.
What was your initial reaction to the finalisation of the Brexit trade deal with the European Union?
My initial reaction to the agreement was indifferent. After more in-depth reading and as a believer in global markets and free trade, I believe the agreement will have a significant positive impact on the UK economy. Approximately 49% of UK trade is done with EU countries – having an ability to purchase and supply goods and services without tariffs and quotes will enhance the UK economy more than nationalist policies. I do believe the Brexit agreement will cause more confusion and paperwork for all parties involved.
Do you think there will be an impact on American businesses trading with the UK, or vice versa, in the professional clothing industry for post-Brexit Britain?
The devil is in the agreement details. The UK is the fifth largest export partner and seventh largest import partner with the US. These are significant numbers for both countries and I believe the value of each country’s currency will impact trade more than Brexit. The question remains how Brexit will impact the UK economy. A strong, stable or weak economy as well as monetary policy impacts currency values which directly impact purchasing power. On a geopolitical view, I want to believe that the US will begin to strengthen its ties with allies via enhanced trade.
The UK currently does not have a trade deal with the US, what advice would you give to businesses seeking to expand into the US market now that the UK has left the European Union?
Probably the number one suggestion I would provide to UK companies is to register a US subsidiary and conduct business as a domestic company. There will still be potential for tariffs and quotas on imported products but the risk of political change toward a foreign entity would be reduced. Within that suggestion is to hire a good US based corporate attorney that is well versed in foreign companies doing business in the US.
PCIAW® members who have any questions should contact us at firstname.lastname@example.org
If the answer is not readily available from the official government website or your supporting customs partner – if we don’t know the answer we’ll find somebody who does.