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Market Focus - Textiles

Until 23 June, the world was quite simple. Yes, there was a depressed used clothing and textiles market, but at least we had some clarity. Now we find our­selves in a country that has chosen a different path and is thwarted by uncer­tainties. I have no crystal ball so it is very difficult to tell what will happen – except that I do not think it will make a chal­lenging situation any easier.

Much of our trade is with EU mem­ber states. Because most used clothing is not classed as ‘waste’ in England and Wales, what our members collect and process can currently be freely traded within the 28 member states. This free trade has helped to support our industry when exporting to countries particularly in eastern Europe, and has provided a vital lifeline when trade to Ukraine (a non-EU country) was adversely affected by the outbreak of civil war.

So we need to wait and see what form of trade agreements the UK can negoti­ate before we leave the EU that will enable us to continue trading with our EU partners. Until such agreements are made then our depressed market will continue to experience even more uncertainty.

There is also the matter of 50 or more EU free trade agreements with coun­tries or blocks of countries outside the union. Currently, the Department for Business Innovation and Skills dele­gates all its trade negotiation responsi­bilities to Brussels. We are now going to have to negotiate our own deals so that we can continue to enjoy favourable access to these same markets.

It will be interesting to see whether the UK, with its population of 65 mil­lion, can attain the same favourable con­ditions for its business sector that the EU has already negotiated, with its cur­rent population of more than 500 mil­lion, and all with a new prime minister at the helm.

Then there is the question of who is going to work for the textile collectors and processors. Our industry is rather like agriculture insofar as our businesses are heavily reliant on migrant workers to undertake the collections, sorting and baling of clothing/textiles. Many of them are currently from EU member states.

The free movement of people between countries has enabled mem­bers of the Textile Recycling Association (TRA) to recruit enough staff. These workers are not suppressing wages: rates of pay for manual workers and working conditions are generally good. But migrant workers are doing the jobs that British workers often do not want.

So what will happen in a post-union UK? Will it adopt an Australian-style points system for migrant workers, and will it make allowances for the huge demand for manual workers, at least at the moment? What additional costs will there be for businesses to take on work­ers from the EU? We can ill-afford to take on additional costs and, if the UK goes into recession, as is being predicted by some, the need to keep costs down are even more acute.

So many questions have arisen as a result of the referendum, which will only serve to exacerbate the difficult market conditions that our industry is facing. Global market prices of all used clothing/textile grades are continuing to remain depressed and there is no sign that this will recover.

The big fly already in the ointment was the decision by ministers of the East African Communities (EAC) bloc to instruct their governments to introduce measures to ban the imports of used clothing by 2019.

The TRA has been lobbying hard with other trade bodies such as the Bureau of International Recycling, the US trade association Smart and the Sustainability Lab at Bangor University. We are not only trying to persuade the EAC governments to keep their markets open because we need them, but also to encourage and facilitate the development of sustainable manu­facturing in the textile fibre recycling industry.

New technologies and techniques are being developed for fibre-to-fibre recy­cling and some could become commer­cially viable within the next two years. We would really like to see investment in these technologies going into EAC member states to enable them to create the manufacturing base they are seek­ing, in a more sustainable manner and in a way that maximises prosperity. We want to create a win-win situation for us and the east Africans.

We have started making headway on lobbying efforts at this end but, for those of us in the UK, that has largely now been scuppered. A new trade agreement between the EU and EAC is about to be signed that would be of significant help to all businesses from EU countries wishing to trade goods in EAC coun­tries. Unfortunately we in the UK are not going to be around long enough to benefit from it.

Alan Wheeler Director, Textiles Recycling Association

 

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