The United Kingdom (UK) Government has launched the Developing Countries Trading Scheme (DCTS) in Nigeria.
The scheme offers one of the most generous sets of trading preferences in the world and demonstrates it’s commitment to building long term, mutually beneficial relationships with countries like Nigeria.
A statement on Wednesday revealed that the launch took place at the Eko Hotel in Lagos, and that the DCTS will come into force in the Spring of 2023, replacing the UK’s Generalised Scheme of Preferences.
According to the statement, the DCTS benefits 65 countries, 37 of which are African, and will mean that Nigeria benefits from duty free trade on over 9200 products., noting that this is significantly more generous than both the EU’s GSP scheme and the US’ AGOA scheme and, based on current trade volumes, would mean that 99% of goods exports to the UK are duty free.
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 free and fair trade with developing countries, boosting the economy and supporting jobs in those countries, as well as in ours.”
The statement revealed that this work is part of a wider push by the UK to drive a free trade, pro-growth agenda across the globe, using trade to drive prosperity and help eradicate poverty.
Key aspects of the DCTS, according to the statement include, dramatically cutting tariffs for Nigeria so that 3000 new products are duty free for the first time. The average existing tariff on these goods is 7% meaning these changes make Nigerian exports more competitive in the UK.
“Many tariff reductions are on value added goods such as processed sesame oil, cotton clothing and cocoa butter and paste and complement existing duty free trade on raw products.
“Making it simpler for Nigeria to get and retain these enhanced tariffs by removing the need for Nigeria to ratify and implement certain international conventions. At the same time, the basis for potential suspension from the scheme has been broadened to include environmental as well as human right and labour rights considerations.
“Making rules of origin more generous for Nigeria’s least developed country neighbours to make it easier for them to use components from Nigeria in their duty free exports to the UK
“Ensuring that goods which are genuinely competitive from countries like India and Indonesia do not get preferential tariffs, protecting the preferences of Nigerian businesses in key sectors such as leather goods and textiles.
The statement revealed that a number of key products have been identified which Nigeria already exports to the world but not the UK include cocoa, cotton, fertilizers, flowers, frozen shrimp/prawns, petrochemicals, plantain, sesame and tomatoes, which tariffs have been either reduced or removed.
