FTA welcomes UK’s tariff-free Brexit pledge

6/27/2017

The Freight Transport Association (FTA) has welcomed this weekend’s commitment from the UK government to maintaining, post-Brexit, the existing duty-free access to UK markets enjoyed by 48 of the world’s least-developed nations under current EU arrangements.

The association, which represents the freight and logistics sector in the UK, said these agreements would ensure that British manufacturers and retailers can continue to trade efficiently and profitably and should ensure that the price of many household items, ranging from textiles to tea, can be maintained at pre-Brexit levels.

Under current EU arrangements, the UK offers duty-free, quota-free access for ‘Least Developed Countries’ on all goods they are exporting to the UK, other than arms and ammunition. For the next tier of developing countries, largely classed as lower middle income, the EU offers a mix of reductions on tariffs. The world’s ‘Least Developed Countries’ are determined and defined by the United Nations using criteria that is based on income criterion, the ‘Human Assets Index’ and the ‘Economic Vulnerability Index’. 

The new UK commitment means that around 48 countries across the globe, from Bangladesh to Sierra Leone, Haiti and Ethiopia will continue to benefit from duty-free exports into the UK on all goods other than arms and ammunition, known as ‘everything but arms’. On leaving the EU, the UK government said it will also explore options to expand on relationships with developing countries such as Jamaica, Pakistan and Ghana – all of which currently benefit from a mixture of reduced or zero tariffs on the goods they export to the UK – as well as maintaining existing trading arrangements and avoiding costly tariffs.

Around £20 billion (US$25 billion) a year of goods are shipped to the UK from these developing countries, accounting for around half of UK clothing, a quarter of coffee and other everyday goods such as cocoa, bananas and roses.

Without these trading arrangements, clothing, for example, from some of the poorest countries could face tariffs of over 10% – which could be passed on to UK consumers through higher prices, the UK government said.

FTA said it had been lobbying the UK government to maintain low tariffs on goods from emerging trading countries since the EU referendum decision and has declared the government’s statement good news for business, and “a victory for the opinions of the freight and logistics sector”.

Alex Veitch, Head of Global Policy at FTA, commented: “Imports of many of our staple household items, which reach our shores in bulk shipments from around the globe, currently benefit from reduced or zero tariff agreements.  These keep prices stable, both for retailers and for manufacturers – a key requirement when other areas of the economy are currently more volatile. 

“FTA lobbying of government has been relentless in the past year on behalf of the members of the British Shippers’ Council, to ensure that their opinions have been considered, and we look forward to working with the Department for International Trade in the coming months to ensure that the nation’s shopping basket continues to be as affordable as possible.”

Since the EU referendum announcement, FTA has met representatives from the Department for International Trade on three occasions to discuss the priorities of the logistics sector.  Veitch said this latest announcement was good news for British retailers, and great for developing countries. 

“Trade policy is set by EU member states, so after Brexit the UK will be free to chart its own course,” he noted. “By committing to a policy of duty-free access to UK markets for these states, the government has stated its intentions to ensure that Britain will keep on trading outside the European Union.”

The UK government also said it was continuing “to deliver improved support to these countries by helping them break down the barriers to trade, supporting critical trade infrastructure like ports and roads, and building trade skills in those countries, so that they can take better advantage of trading opportunities”.

Veitch commented: “The government’s intention to deliver improved support to developing countries by helping them break down the barriers to trade is also great news for the economy, and we look forward to contributing to this work through our global network – the Global Shippers’ Forum, which represents international trade associations around the world.”