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Britain launches new trading scheme to benefit Bangladesh

  • Diplomatic Correspondent
  • 16th August, 2022 06:03:38 PM
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Britain launches new trading scheme to benefit Bangladesh

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As part of United Kingdom’s Brexit efforts, Britain has launched a scheme to extend tariff cuts and simpler terms of trade to hundreds of products, such as clothes and food from developing countries, including Bangladesh, to set up systems to replace those run by the European Union.

The UK has termed this effort as one of the world’s most generous trading schemes with 65 developing countries in Asia, Africa, Oceania and the Americas, including some of the poorest in the world.

The new scheme will  come into force in early 2023.

The International Trade Secretary Anne-Marie Trevelyan on Tuesday (Aug 16) launched the new Developing Countries Trading Scheme (DCTS), which will extend tariff cuts to products exported from developing countries, going further than the EU’s Generalised Scheme of Preferences (GSP).

The scheme means that a wide variety of products ranges from clothes and shoes to oil and foods that aren’t widely produced in the UK including olive oil and tomatoes – will benefit from lower or zero tariffs.

The British High Commission in Dhaka has said the DCTS will be one of the most generous sets of trading preferences of any country in the world, helping to grow trade, boost jobs and drive economic growth.

It said this new scheme demonstrates UK commitment to strengthening a longer term and mutually beneficial economic relationship with Bangladesh.

The DCTS will provide a clearer and streamlined trading arrangement for Bangladesh thanks to simplified and more flexible rules of origin, making it easier to produce goods using components from other countries without losing duty-free status.

Under the scheme, Bangladesh will continue to benefit from duty free exports to the UK on everything but arms, added the British High Commission in Dhaka.

“The DCTS will harness the power of trade and the private sector to enable developing countries like Bangladesh to grow and prosper. The UK is one of Bangladesh's biggest export markets, with our annual trade partnership worth over $4bn. Bangladeshi businesses will have easier access to UK markets under the new scheme,” British High Commissioner to Bangladesh Robert Chatterton Dickson said.

“Even after Bangladesh graduates from least developed country status in 2026, it will retain duty-free access to the UK for 98% of its exports, including ready-made garments. We look forward to increasing trade in both directions as an increasingly prosperous Bangladesh buys more high quality UK goods and services”.

The DCTS contributes to developing countries’ integration into the global economy, creating stronger trade and investment partners for the future. It also reflects the UK’s commitments on human rights and labour standards, incorporating powers to alter trade preferences in the event of serious human or labour rights violations.

The DCTS will also support the UK’s obligation on anti-corruption, climate change and environment conventions. 

Secretary of State for International Trade Anne-Marie Trevelyan said as an independent trading nation, the Britain is taking back control of our trade policy and making decisions that back UK businesses, help with the cost of living, and support the economies of developing countries around the world.

“UK businesses can look forward to less red-tape and lower costs, incentivising firms to import goods from developing countries.”

It removes some seasonal tariffs, meaning more options for British supermarkets and shops all year round. For example, cucumbers, which can’t be grown in the UK in the winter, will now be tariff-free during this period for the majority of countries in the scheme.

The scheme also simplifies complex trade rules such as rules of origin – the rules dictating what proportion of a product must be made in its country of origin. This makes it easier for businesses like family-owned textile business DBL Group from Bangladesh to export, encouraging developing countries to play a larger role in the global trade community.