UK introduces new trading scheme for developing countries, Mozambique included

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UK introduces new trading scheme for developing countries, Mozambique included

1:10 CAT | 27 Jun 2023

FILE - UK's Minister for International Trade Nigel Huddleston launched the scheme while on a visit to Ethiopia’s largest industrial business park, Bole Lemi. Ethiopia. [File photo: Twitter / @HuddlestonNigel]

The UK will radically simplify trading rules and cut tariffs on products from developing countries, including Mozambique, reducing import costs by over £770m per year, bringing mutual benefits for the UK and the countries under this new scheme.

The UK’s new post-Brexit Developing Countries Trading Scheme (DCTS) scheme – entering into force today – covers 65 countries that are home to over 3.3 billion people, and over half are in Africa. It removes or reduces tariffs and simplifies trading rules so that more products qualify for the scheme, making it more generous than the EU scheme the UK was previously a member of.

It will benefit developing countries looking to diversify and increase exports, driving their prosperity and reducing their need for aid.

The scheme saves UK businesses over £770 million per year by removing or cutting tariffs on over £9 billion of imports – increasing choice for UK consumers and potentially reducing prices on a wide variety of items such as clothes, food and children’s toys, as well as creating opportunities for UK businesses to trade internationally and grow the UK economy. Over time, were developing countries to increase trade with the UK under the scheme, businesses could save millions more on import costs.

Minister for International Trade Nigel Huddleston launched the scheme while on a visit to Ethiopia’s largest industrial business park, Bole Lemi. Ethiopia, which already has a trading relationship with the UK worth £838 million, pays zero tariffs on 100% of goods exported to the UK. Under the new scheme, Ethiopia and 46 other countries will be able produce goods using components from many more countries, growing their opportunities to trade with the UK.

Speaking at the park, Minister Huddleston said:

“This scheme is a brilliant example of the UK taking advantage of its status as an independent trading nation and I am excited to see it implemented today.

“It will create opportunities for businesses around the world, supporting livelihoods, creating jobs and diversifying local and international supply chains. It will also benefit UK businesses and consumers by lowering import costs on a whole range of products.”

The Foreign, Commonwealth and Development Office’s Minister for Development and Africa, Andrew Mitchell, said:

“The UK’s new trading scheme for 65 developing countries, DCTS, shows how we can use trade to deliver development.”

“It will benefit traders around the world, including women-owned businesses, which we are supporting through the UK Trade Partnership programme.”

The British High Commissioner in Mozambique, Helen Lewis, said:

“We aim to double total trade between Mozambique and UK over the next 3 years to £400 million by consolidating economic cooperation, supporting Mozambique import substitution, diversification of exports and an increase of investments that will lead to improvement of the balance of commerce.”

Bilaterally, Mozambique and the UK have been cooperating under the SACUM-UK Economic Partnership Agreement. This new instrument places Mozambique in a preferential category with 0% import tariffs on 99.8% of products into UK markets.

About DCTS

DCTS covers 37 countries in Africa, 26 in Asia/Oceania/Middle East and 2 in the Americas, representing varied and exciting trade opportunities around the world.

The scheme was announced last year, and legislation has since been finalised to bring it into force.

The UK imported an average of £22.8 billion worth of goods from DCTS countries over the last three years.

When combined with the UK’s network of 8 Economic Partnership Agreements, the DCTS means over 90 developing countries now benefit from duty-free or nearly duty-free trade.

Customs processes will remain the same as under current preferential trading arrangements but new tariffs and rules of origin for Least Developed Countries will apply.

More information on the scheme can be found here: Trading with developing nations – GOV.UK (www.gov.uk)

Last week we launched the UK’s🇬🇧 landmark Developing Countries Trading Scheme, met with fantastic women entrepreneurs, business leaders and my counterparts in the Government of Ethiopia🇪🇹

It was a productive trip and I look forward to forging more global trading relationships 🌎 pic.twitter.com/pSwlur1j1o

— Nigel Huddleston MP (@HuddlestonNigel) June 26, 2023

📢 I’m excited to see the UK take a major step forward in easing trade with 65 developing countries today ✅

It’s a huge win for the UK as an independent trading nation and will boost growth, create jobs, and diversify the UK’s supply chains. 🇬🇧🤝🌎https://t.co/DciprT1UcJ pic.twitter.com/APDPhyJtmh

— Nigel Huddleston MP (@HuddlestonNigel) June 19, 2023