Trade Policy Update

Department for International Trade written statement – made on 6th September 2022.

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Photo of Anne-Marie Trevelyan Anne-Marie Trevelyan The Secretary of State for International Trade and President of the Board of Trade, The Secretary of State for Transport

Since the House adjourned for summer recess, the Department for International Trade (DIT) has made good progress on a number of areas. This statement provides Parliament with an update on progress with Ukraine reconstruction, the UK’s trade negotiations with India, negotiations towards accession to the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP), and the Developing Countries Trading Scheme.

Ukraine reconstruction

At the end of July, following a competitive procurement process, we appointed Mott MacDonald and Crown Agents on a 12-week programme to act as Ukraine Reconstruction Industry Advisors to the joint UK-Ukraine Infrastructure Taskforce. They will provide technical and logistical assessments, work with our counterparts in country identifying and prioritising current and future reconstruction projects, and provide technical support to the joint Taskforce. At this stage the joint Taskforce will focus on the Ukrainian government’s immediate priorities - rapid replacement of essential housing and bridging infrastructure damaged by the conflict. Successful delivery of these projects is likely to support the Ukrainian economy and unlock new, larger mutually beneficial opportunities for UK businesses and Ukraine in later stages as we continue to support its post-conflict recovery and reconstruction. To ensure we can deliver the most effective reconstruction solutions through the Infrastructure Taskforce, we will work in close partnership with our brilliant UK businesses to unleash their full potential. UKEF remains open for business in Ukraine with £3.5 billion of financial capacity available for UK exporters and Ukrainian buyers, subject to Treasury approvals.

Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTTP)

The first in-person Accession Working Group following the United Kingdom’s application to join the Comprehensive and Progressive Trans-Pacific Partnership (CPTPP) took place in Tokyo, 24 - 28 July 2022.

The UK team negotiated market access with CPTPP Parties in the following areas: goods, services and investment, government procurement, financial services and temporary entry.

Negotiations will continue over the course of the autumn with planning currently underway for the next round of talks. The Government will ensure that membership of CPTPP is achieved on terms that work for UK businesses and consumers.

Joining CPTPP offers numerous benefits to the UK. It will provide greater market access for British goods and services to one of the world’s largest free trading areas, with a combined GDP of £9 trillion in 2021. Reductions in tariffs and investment barriers will give UK firms increased opportunities to a growing market.

Beyond the immediate economic opportunities there is a significant geostrategic case for joining CPTPP. Membership will demonstrate that the UK is a global leader in free and rules-based trade. It will further establish the UK’s commitment to deeper engagement within the Indo-Pacific region in support in increased security and prosperity.

CPTPP will help the whole of the UK capture the benefits of global trade opportunities – by supporting jobs, wage growth and the levelling up agenda. The Department’s preliminary analysis from the CPTPP scoping assessment suggests that every nation and region of the UK could be set to benefit from CPTPP membership.

The Government will keep Parliament updated as these negotiations progress.

UK- India Trade Negotiations

The fifth round of UK-India Free Trade Agreement negotiations took place between 18 - 29 July 2022. The negotiations, at official level, were conducted in a hybrid fashion, with some negotiators in a dedicated Indian negotiations facility, and others attending virtually.

Technical discussions were held across 15 policy areas over 85 separate sessions, with detailed draft treaty text discussions.

In addition, intense negotiations have continued throughout the summer, again in a hybrid fashion, with India hosting UK negotiators and the UK also hosting Indian officials.

We are continuing to work towards the target, as set out by both Governments on 22 April 2022, to conclude the majority of talks by end of October.

The Government will keep Parliament updated as these negotiations progress.

Developing Countries Trading Scheme (DCTS)

On 16 August 2022 we launched the Developing Countries Trading Scheme.

The Developing Countries Trading Scheme is a major milestone in growing free and fair trade with 65 developing nations that are home to more than 3.3 billion people. It is one of the most generous trade preferences schemes in the world and has been designed to boost trade with developing countries, helping them to grow and prosper. It delivers on commitments in the Integrated Review and International Development Strategy to harness the power of trade to support long lasting development and it benefits the UK through reduced import costs, greater choice and improved economic security.

The Developing Countries Trading Scheme demonstrates that, as an independent trading nation, the UK can go beyond what we were able to do as a member of the EU. It introduces more generous, less bureaucratic trading rules that reduce tariffs, simplify rules of origin and simplify the requirements to access better tariff rates. It has been designed to boost jobs, drive growth and make supply chains more resilient.

Developing countries in the scheme collectively export over £20 billion of goods to the UK each year, such as t-shirts from Bangladesh, flowers from Ethiopia and bicycles from Cambodia. The Developing Countries Trading Scheme reduces import tariffs on these products and thousands more, saving businesses and consumers in the UK over £750 million per year and helping to tackle the cost of living.

The Developing Countries Trading Scheme proposals have been shaped by a public consultation held between July – September 2021. Responses were received from a broad range of stakeholders, including businesses and non-governmental organisations and overall supported a simpler, more generous Developing Countries Trading Scheme. A summary of consultation responses has also been published:

https://www.gov.uk/government/consultations/designing-the-uk-trade-preferences-scheme-for-developing-nations

Key aspects of the Developing Countries Trading Scheme include:

  • Least Developed Countries continue to get tariff free trade on everything but arms and ammunition and now benefit from more generous and simplified rules of origin, making it easier for them to participate in regional and global supply chains serving the UK.
  • Low income and lower-middle income countries benefit from more tariff reductions and removals. Nuisance tariffs and some seasonal tariffs have been removed.
  • Goods from India and Indonesia that are competitive in the UK domestic market are excluded from the scheme.
  • Eight countries immediately benefit from more generous tariffs as access to these tariffs is now based purely on economic vulnerability and not on the ratification of international conventions.
  • Powers to suspend countries from the scheme have been expanded. For the first time, climate change and environment related obligations are included in the grounds for suspension as well as those relating to human rights and labour rights.

For more detail on the new scheme and how it differs from the UK Generalised Scheme of Preferences which it replaces, please see the comprehensive government policy response:

www.gov.uk/government/publications/developing-countries-trading-scheme-dcts-new-policy-report

The Developing Countries Trading Scheme will come into force in early 2023, giving businesses time to prepare for greater UK market access.