THE UK Developing Countries Trading Scheme (DCTS) is expected to help Philippine exporters save around 21 million pounds a year in tariffs.
The projected savings will be the result of access to duty-free, quota-free trade on 92% of eligible goods under DCTS, which covers 99% of Philippine exports to the UK.
“The DCTS lowers or removes tariffs on more than 150 products. The coverage extends to our agricultural products, such as tomatoes, milk and cream, cheese, grains, tropical fruits, and animal and vegetable oils,” Trade and Industry Secretary Alfredo E. Pascual said at the DCTS launch event on Wednesday.
The DCTS takes effect in the Philippines on June 19, UK Ambassador to the Philippines Laure Beaufils said.
“DCTS is about supporting Filipino exports to the UK, so making them easier and cheaper, basically. It’s a trading scheme which is about additional product lines for which there will be reduced or zero tariffs,” Ms. Beaufils said on the sidelines of the launch.
“It’s about simplifying rules of origin and other trade requirements. And it is also about removing conditionality for trading. So, it’s about really boosting Filipino exports to the UK by making them cheaper,” she added.
Four categories of goods are expected to benefit the most from UK’s new unilateral trading scheme — tuna, shirts, maize starch and durum wheat flour.
“The Philippine products that will benefit much are tuna and shirts and T-shirts. For instance, our annual exports of tuna, worth 40 million pounds so far, will enjoy a 20-percentage-point reduction in import duty,” Mr. Pascual said.
On average, shirt and T-shirt exports to the UK account for 8 million pounds. The import duty on both will fall by 20% and 12%, respectively.
Although the DCTS has similarities with the European Union’s Generalized Scheme of Preferences Plus (GSP+), Ms. Beaufils said the two schemes differ in terms of “new product lines, the simplification of some of the requirements, and no conditionality… We don’t expect to have to see any international agreements that are signed in order for this to be in effect.”
DCTS will have three tiers: comprehensive preferences which allow for duty-free and quota-free access for least developed countries; enhanced preferences which will remove import duties on product lines for low and lower-middle income countries; and standard preferences which will reduce import duties on certain product lines that are subject to goods graduation.
In 2022, trade between the Philippines and the UK was at a record 2.4 billion pounds.
“I think we’re already going to see that the DCTS will make a real difference to further boost our trade. Our trade is already higher than it’s ever been… this is already a really exciting tool as it is,” Ms. Beaufils said.
“As the scheme strengthens the UK and the Philippines’ economic ties, the UK can also look forward to the Philippines’ continued development — focused on trade and investments. UK businesses will find immense potential in the Philippines as a destination for their investments,” Mr. Pascual said. — Justine Irish D. Tabile
