Thursday, 29 Jul 2021

‘Huge opportunity’: Liz Truss hails new trade scheme as UK breaks free of EU shackles

Brexit: Liz Truss claims trade with the EU is 'bouncing back'

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The Government will on Monday unveil a consultation over new rules which it claims will offer counties a way out of poverty – as well as offering a boost to British business and consumers as part of a strategy enabled by the removal of EU rules and regulations. The Developing Countries Trading Scheme (DCTS) would apply to 70 qualifying countries currently and include improvements such as lower tariffs and simpler rules of origin requirements for countries looking to export goods to Britain.

The scheme will permit countries to diversify their exports and grow their economies, while British households and businesses will benefit from lower prices and wider choice.

Ms Truss said: “Trade fundamentally empowers people and has done more than any single policy in history to lift millions of people around the world out of poverty.

“Now the UK is an independent trading nation we have a huge opportunity do things differently, taking a more liberal, pro-trade approach that leads to growth and opportunity.”

She explained: “Countries like Bangladesh and Vietnam have proven it’s possible to trade your way to better living standards, and our new Developing Countries Trading Scheme will help others do the same.”

The UK currently operates a similar scheme rolled over from the EU.

However, as an independent trading nation, it will now be able to take a more generous, pro-growth approach to trade with developing countries.

The proposed new UK scheme will mean more opportunity and less bureaucracy for developing countries, as well as cutting costs for UK businesses, by reducing tariffs on imports from low income and lower middle-income countries.

For instance, that could lower tariffs on products including rice from Pakistan and trainers from Nigeria.

Foreign Secretary Dominic Raab explained: “Cutting tariffs for poorer countries enables them to trade their way to genuine independence – and I’m proud we lead the world in offering that opportunity.”

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Bangladesh and Vietnam have already shown that increasing trade through similar schemes has helped them grow their economy, improve living standards, and drive down poverty.

Vietnam’s exports to the UK more than tripled between 2009 and 2019.

During this period, the country achieved an average growth rate of more than six percent, while poverty rates fell from more than 20 percent in 2010 to an estimated 5.9 percent in 2020.

Total UK imports from Bangladesh more than doubled between 2009 and 2019, during which time the country achieved an average growth rate of 6.6 percent.

Extreme poverty rates more than halved from 1991 to 2016/17.

The Government has studied schemes in Canada, the US, Japan and the EU before constructing an approach that it believes takes some of the strongest elements of each and builds on them.

The consultation runs for eight weeks and is soliciting the view of all sectors of society, ranging from businesses, members of the public, civil society groups, consumers, associations, partner governments and any other interested stakeholders.

Views will also be sought from businesses and stakeholders with an interest across the globe.

The UK Developing Countries Trading Scheme will apply to 47 countries in the Least Developed Country Framework (LDCF) and 23 additional countries classified by the World Bank as low-income and lower-middle-income countries.

Other low-income and lower-middle-income countries are not included in the scheme because they benefit from preferential terms offered by free trade agreements with the UK.

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