The UK’s Generalised Scheme of Preferences (GSP) will take effect from 1 January 2021 following the end of the Brexit transition period, covering the same countries currently eligible for trade preferences under the EU’s GSP.
It will cover any eligible countries that do not have their existing trade agreements transitioned into a new agreement with the UK.
The UK imported approximately GBP8bn (US$10.6bn) worth of textiles and apparel products from eligible countries last year – accounting for around 30% of all textile and apparel imports into the UK.
The Government said it is planning on improving the scheme to better support developing countries, with more details expected to be announced in 2021.
The UK GSP will have three frameworks that replicate the market access provided by the EU’s GSP: Least Developed Countries Framework, General Framework, and Enhanced Framework.
The Least Developed Framework is for countries classified as Least Developed Countries (LDCs), including Bangladesh, Ethiopia, Haiti and Myanmar. Imports from these countries have quota-free access and nil rates of import duty on all goods other than arms and ammunition.
The General Framework is for countries classified as low-income and lower-middle income countries, including India and Indonesia. Imports from these countries have reduced rates of import duty on certain goods.
The Enhanced Framework, meanwhile, is for countries classified as low-income and lower-middle income countries, including Pakistan, the Philippines and Sri Lanka. They must implement 27 conventions relating to human and labour rights, the environment, and good governance. Imports from these countries have a nil rate of import duty on certain goods.
GSP rates can be suspended for countries once they implement a new trade agreement with the UK, which provides them with equivalent or better preferential market access than the GSP.
To date, trade agreements have been signed with countries including Central America, Chile, Jordan, Morocco, the Pacific States, South Korea and Tunisia. Trading blocs are expected to take effect when existing EU trade agreements no longer apply to the UK, from 1 January 2021.