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UK’s Developing Countries Trading Scheme comes into effect for Pakistan

  • Replaces Generalised Scheme of Preferences (GSP)
  • Pakistan retains enhanced preferences status, will continue to benefit from duty-free exports to the UK on 94% of goods exported
Published June 20, 2023

The United Kingdom’s Developing Countries Trading Scheme (DCTS) has now entered into effect, providing tariff reductions and simpler terms of trade to Pakistan and 64 other countries, stated a press release issued on Tuesday.

“The new scheme has replaced the Generalised Scheme of Preferences (GSP) and will help drive business between the UK and developing countries, reducing the need for aid,” the statement added.

“Under the DCTS, Pakistan has retained its enhanced preferences status and will continue to benefit from duty-free exports to the UK on 94% of goods exported. It will also remove tariffs on over 156 additional products, and simplify some seasonal tariffs.

“Some of the specific goods which benefit most from the DCTS in Pakistan include over £250 million ($320 million) of average annual exports to the UK of bedlinen and almost £100 million of jeans which will each receive a 12% reduction in import duty,” it added.

The DCTS covers 37 countries in Africa, 26 in Asia/Oceania/Middle East and 2 in the Americas. The scheme was announced last year, and legislation has since been finalised to bring it into force.

As per the statement, the total volume of trade (goods and services) between the UK and Pakistan each year currently stands at £4.4 billion ($5.63 billion).

“It is expected that £120 million ($153.6 million) in tariffs will be saved on exports to the UK under the scheme,” read the statement.

Moreover, Pakistan and other DCTS countries will be supported to participate in the international trading system through the UK’s Trade Centre of Excellence, which will provide specialist support to fully participate in the global trading system. This may include support for meeting trade standards and participating in multilateral trade forums.

“This is a major development in the trading relations between the UK and Pakistan,” said Sarah Mooney, UK’s Trade Director for Pakistan and British Deputy High Commissioner, Karachi.

“This important new scheme will further strengthen the economic ties between our two great countries, helping Pakistan to bolster its exports to the UK and harness the power of trade for development,’’ Mooney added.

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