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New UK Developing Countries Trading Scheme 2023

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On 15 August 2022, the United Kingdom launched its new Developing Countries Trading Scheme (DCTS). The scheme provides duty-free, quota-free trade to LDCs on everything but arms and duty-free, quota-free trade on 85% of eligible goods to most LICs and LMICs. The DCTS will replace the UK’s Generalised Scheme of Preferences (GSP) in early 2023. It contains product-specific rules of origin for LDCs.

More information:

Press release: New trading scheme cuts tariffs on hundreds of everyday products – GOV.UK (www.gov.uk)

Policy paper: Developing Countries Trading Scheme (DCTS): new policy report – GOV.UK (www.gov.uk)

GMAC – Garment Manufacturers Association in Cambodia

The UK Government released a few more details on the proposed revamp of its GSP schen70a. There is no change in preferences for Cambodia under the revamp — indeed if anything the revamped scheme is a bit more liberal for travel goods (apparel remains the same). I am summarizing some of the changes: The revamp will be rolled out in early 2023 and it will be called the Developing Countries Trading Scheme (DCTS).

The government retained the same tiered structure as the earlier scheme (General Framework / Enhanced Framework / LDC Framework), which, as you well know, is based on the EU’s General / GSP+ / EBA tiers. But as with a change in the name of the program, the three tiers will be called Standard Preferences / Enhanced Preferences / Comprehensive Preferences (for LDCs).
There will still be duty-free, quota-free access for everything but arms for Cambodia (and all LDCs) under the Comprehensive tier. However, a few more products have been made duty-free under the Enhanced tier. That means that around 85 percent of UK tariff lines are now duty-free under the Enhanced tier while around 80 percent have reduced duties under the Standard tier. Travel goods are duty-free under all tiers, but apparel is duty-free only under the Enhanced and Comprehensive tiers.
The criteria for Enhanced is now a simple economic vulnerability criteria as opposed to the human rights criteria in the EU GSP+ scheme. That means almost all non-LDCs are now part of the Enhanced tier (and thus have duty-free access for all apparel and travel goods). Only India and Indonesia remain in the Standard tier.
Rules of origin have been liberalized for LDCs under the Comprehensive Tier: Total non-originating content for travel goods can now go up to maximum of 75 percent of the ex-works price of the good.
Cumulation is allowed with all UK DCTS countries (in all tiers) as well as UK EPA countries (mostly in Africa and the Pacific).


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