The United Kingdom (UK) on Monday, 19 June 2023, radically simplified trading rules and cut tariffs on products from developing countries, saving businesses and consumers millions of pounds a year.
The UK’s new post-Brexit Developing Countries Trading Scheme (DCTS) scheme – entering into force – covers 65 countries, including Nigeria.
The scheme 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.
The scheme will benefit developing countries looking to diversify and increase exports, driving their prosperity and creating jobs.
Over time, were developing countries to increase trade with the UK under the scheme, businesses could save millions more on import costs.
In Nigeria, over 99% of goods exported from the country will automatically be eligible for duty-free access to the UK. Nigeria will receive enhanced preferential access for almost 3,000 products. E.g. 4.5% removed on cocoa paste, 26.5% removed on fruit juices, & 14% removed on prepared tomatoes.
Minister for International Trade Nigel Huddleston launched the scheme while on a visit to Ethiopia’s largest industrial business park, Bole Lemi.
Speaking at the park, Minister Huddleston said:
“This DCTS 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 scheme benefits businesses all over the world and British companies that trade with these countries in everyday products such as bicycles and camping gear.
Speaking on the launch, UK Deputy British High Commissioner in Lagos, Ben Llewellyn-Jones said:
“Nigeria is one of the UK’s most important partners in Africa and the UK Government is committed to working with Nigerian businesses and exporters to boost trade between our two great nations. The UK’s Developing Countries Trading Scheme harnesses the power of trade to help Nigeria and other emerging economies grow and prosper.
“One major benefit of this new UK trading scheme is that it abolishes tariffs on over 3000 everyday products that Nigeria currently exports including cocoa, cotton, plantain, flowers, fertilizers, tomatoes, frozen shrimps and sesame. The overarching aim of the new scheme is to grow trade with developing countries, boosting the economy and supporting jobs in those countries, as well as in ours.”
EXTRA:
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.
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.
Nigeria
Nigeria is eligible for enhanced trade preferences in the DCTS. This means it benefits from new tariff cuts on over 3000 products and in total benefits from duty free trade on approximately 9200 products. A number of key products have been identified which Nigeria already exports to the world but not the UK.
These include:
Cocoa – Tariffs removed for cocoa butter (2.5%) and paste (4.5%). Cocoa remains duty free. Nigerian global exports of around £40m (butter) and £10m (paste) a year. UK imports of around £250m of cocoa butter annually of which Nigeria currently accounts for less than 2%. UK imports of cocoa paste around £40m annually with none from Nigeria. Identified by Nigerian Export Promotion Council as key opportunity.
Cotton – Tariffs removed for woven cotton (6.4%) and tariffs on cotton clothes and apparel have been removed. Raw cotton remains duty free. Identified by Nigerian Export Promotion Council as key opportunity.
Fertilisers – Tariffs removed for urea (6%). Nigerian global exports of over £650m in 2021 – tenth largest global exporter. UK global imports of over £200m with none from Nigeria.
Fertilisers identified by Nigerian Export Promotion Council as key opportunity.
Flowers – Tariffs removed for fresh cut (4.5%) and prepared (6.5%) flowers. Nigerian global exports of over £10m in 2021. UK global imports of over £600m a year.
Frozen shrimp/prawns – Tariffs lowered for frozen shrimp from 4.2% to 3.6%. Nigerian global exports of over £30m a year. UK global exports of over £300m per year with no imports from Nigeria.
Petrochemicals – Tariffs removed for many products including polyethylene (2.5%) and polypropylene (2.5%). Over £20m of Nigerian global exports. UK global imports in the £billions a year with very low volumes from Nigeria. Petrochemicals identified by Nigerian Export Promotion Council as key opportunity.
Plantain – Tariffs removed for plantain (12.5%). UK global imports of around £25m a year with very low amounts from Nigeria. Identified by Nigerian Export Promotion Council as key opportunity.
Sesame – Tariffs removed on sesame oil (2.5%-4.5% depending on usage) and sesame cake. Nigerian global exports of sesame oil are around £10m a year. UK global imports of around £15m a year with none from Nigeria. Sesame identified by Nigerian Export Promotion Council as key opportunity.
Tomatoes – Tariffs removed for fresh tomatoes (8% between November-May) and prepared tomatoes (14%). UK global imports of around £500m (fresh) and £350m (prepared) a year. Currently low Nigerian exports but identified by Nigerian Export Promotion Council as key opportunity.
Author
Comments 1