New trade system for developing countries

The Department for International Trade launched a new preferential trading scheme on the 15th August 2022. The Developing Countries Trading Scheme (DCTS) is intended to grow free and fair trade with 65 developing nations, with a combined market of more than 3.3 billion.

The DCTS extends tariff cuts to hundreds of products, including clothes and food, from 65 specified developing countries, as part of the UK government’s efforts to replace similar EU schemes.

DCTS will effectively replace the Generalised System of Preferences, which applies import duties at reduced, preferential rates, to nominated countries.

UK Trade minister Anne-Marie Trevelyan said the Developing Countries Trading scheme (DCTS) would extend tariff cuts to hundreds more products exported from developing countries and goes further than the GSP.

The DCTS offers developing countries a simpler and more generous set of trading preferences and simplifies rules such as rules of origin, which dictate what proportion of a product must be made in its country of origin and removes some seasonal tariffs, in a bid to reduce red tape and lower costs, as an incentive to firms to import more goods from developing countries.

Key changes include:

• Simplified rules of origin, by making product specific and cumulation rules more generous and easier to follow
• Removal of tariffs on 156 products of strategic interest to developing countries
• Simplification of tariff schedule by getting rid of nuisance tariffs and some seasonal tariffs
• Access granted on economic vulnerability and not on international convention
• Ensuring that goods which are genuinely competitive in the UK market from India and Indonesia do not get preferential tariffs
• Powers to suspend a country for human rights, labour rights and other violations broadened

Our CuDoS customs brokerage platform is optimised continuously, in line with HMRC regime changes, automating and submitting customs declarations, for simple and compliant preference processing. 

To discuss your trading strategy, access to preferential tariffs and documentary requirements please contact our customs expert, Andy Fitchett, who can talk you through your opportunities and options.