Overview 65 developing countries - PowerPoint Presentation

1. Overview65 developing countries£21bn UK-bound trade pa of which over £9bn on preferential terms3.3bn peopleSaves UK businesses £750m+ in duties paMain products: Clothing and foodstuffsBiggest traders: Bangladesh, Pakistan95% of goods duty free or reduced dutyIn early 2023, the UK’s Developing Countries Trading Scheme (DCTS) will replace the UK’s current Generalised Scheme of Preferences (GSP). DCTS is a major milestone in growing free and fair trade with 65 developing nations that are home to more than 3.3 billion people. It is one of the most generous trade preferences schemes in the world and has been designed to boost trade with developing countries, helping them to grow and prosper.DCTS delivers on commitments in the Integrated Review and International Development Strategy to harness the power of trade to support long lasting development. DCTS benefits the UK through over £750 million of reduced import costs, greater choice and improved economic security.

2. DCTS Preferences and CountriesPage 2AfghanistanAngolaBangladeshBeninBhutanBurkina FasoBurundiCambodiaCARChadComorosDRCDjiboutiEritreaEthiopiaGambiaGuineaGuinea-BissauHaitiKiribatiLao PRLesothoLiberiaMadagascarMalawiMaliMauritaniaMozambiqueMyanmarNepalNigerRwandaSao Tome and PrincipeSenegalSierra LeoneSolomon IslandsSomaliaBoliviaCape VerdeKyrgyzstanMongoliaPakistanPhilippinesSri LankaUzbekistanAlgeriaCongoCook IslandsMicronesiaNigeriaNiueSyriaTajikistanIndiaIndonesiaComprehensive Preferences (LDCs)99%* duty freeEnhanced PreferencesAt least 85% duty freeStandard Preferences33% duty free, 51% reduced*Everything but arms/ammunitionCountries in bold moved to Enhanced Preferences under DCTSSubject to goods graduationSouth SudanSudanTimor-LesteTogoTuvaluTanzaniaUgandaVanuatuYemenZambiaMore Generous Rules of Origin

3. Tariff ChangesChangesMore tariff cuts150+ tariffs cut for economically vulnerable low income/lower middle income countriesCuts targeted at goods of strategic importance to these countriesLDC’s continue to get duty free access on everything but armsMore countries get Enhanced Preferences8 additional economically vulnerable low income/lower middle income countries get Enhanced Preferences:Algeria, Congo, Cook Islands, Micronesia, Nigeria, Niue, Syria, TajikistanBy 2030, 7 graduating LDCs will move directly to Enhanced Preferences:Angola, Bangladesh, Bhutan, Lao People’s Democratic Republic, Nepal, São Tomé and Príncipe, VanuatuFewer seasonal and nuisance tariffs4 seasonal tariffs standardised to annual tariffs (Standard Preferences) or removed (Enhanced Preferences) on cucumbers, globe artichokes, wilkings and strawberries33 nuisance tariffs of 2% or below removed (Standard Preferences). No nuisance tariffs for Enhanced Preferences.ImpactAt least 85% of goods in Enhanced Preferences are now zero ratedOverall, DCTS saves businesses and consumers £750m in dutiesUp to £41m in trade benefits from tariff cuts immediatelyOver £2bn in trade will benefit from tariff cuts by 2030Smoother transition from LDC statusLess administration for businesses

4. Rules of OriginSimpler and more generous Product Specific Rules (PSRs) for LDCs: Half of all chapters now allow up to 75% non-originating content for productsAlmost all PSRs now allow for alternative “or” rules. Most chapters (83/96) now have a single set of rules that apply to the whole chapter, meaning fewer exceptions, rules and variations depending on the type of product.Rules of Origin (RoO) determine which exports from a country qualify as “originating” and therefore eligible for preferential tariff treatmentWider, more generous extended cumulation for LDCs: LDCs can now cumulate with all other DCTS countries and countries which have an EPA with the UK for duty-free, quota free products. The list of countries for cumulation has been extended to 95 countries. Existing cumulation benefits will remain in place, to make sure current exporters are not disrupted. ImpactEasier for businesses to apply and meet the rules More eligible products can receive preferential treatmentHigher-non originating threshold facilitates integration into value chains, including high value components. Facilitates regional cumulation, especially in Africa for the first time.Overall, UK is the first to implement RoO changes requested by LDCs. Changes (for LDCs only)

5. Summary of ChangesPage 5Rules of OriginTariffsGoods GraduationConditionsLeast Developed Countries (LDCs) get simplified and more generous rules of origin… … making it easier to trade with the UK and to produce goods using components from other countries without losing duty-free status.LDCs continue to get duty free trade on 99% of goodsAll economically vulnerable low income and lower middle-income countries now get increased duty free trade of up to 85% of goods… …making their goods more competitive and reducing UK import costs by over £750m.Competitive products from India (£750m) and Indonesia (£82m) continue to be excluded from preferential tariffs…… protecting the interests of economically vulnerable producers of these goods.Use of conditions has been simplified for Enhanced Preferences and strengthened for suspension decisions… … demonstrating the UK’s commitment to the principles of international conventions whilst making the scheme simpler and more generous.

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7. TimelinePage 7LaunchPM announcement at Commonwealth Heads of Government on 23 JuneTrade Secretary launch in late August Communication & EngagementMinisterial statements to Parliament, CommitteesPublication of full Government Policy ResponseStakeholder roundtablesDrafting Statutory Instrument and parliamentary proceduresComing into forceStatutory Instrument passed into lawDCTS replaces the UK’s Generalised Scheme of PreferencesJuly – AugAug - DecEarly 2023