Recently, the United Kingdom released more details of the proposed restructured GSP (Generalised Scheme of Preferences). It will roll out in early 2023. As per the report, in future, it would be more beneficial to Cambodian garment and textile commodities, particularly travel goods. However, the GMAC (Garment Manufacturers Association in Cambodia) countered the claim.
These new details of the UK’s DCTS have been applauded by Cambodia’s Travel Goods and Leather Association (CTLA). The GMAC stated that the UK’s Developing Countries Trading Scheme (DCTS) won’t make any significant modifications in preferences for Cambodia. Although, the GMAC accepted that the scheme would be “a bit more liberal for travel goods.”
As per the previous scheme, the government of the United Kingdom would retain the same three-tiered system. However, it will feature an enhanced framework, least developed country (LDC) and general frameworks. According to GMAC, these are based on the EU’s Everything But Arms (EBA), GSP+, and General tiers.
Additionally, within the DCTS, the tiers of preferences will get new names like comprehensive preferences, standard preferences, and enhanced preferences. However, specifically, the first one is focused on LDC.
GMC stated, “The scheme provides duty-free, quota-free trade to LDCs on everything but arms and duty-free, quota-free trade on 85% of eligible goods to most LICs and LMICs”.
Simultaneously, a few more products have been exempted from duty taxes under the improved tier. This will make roughly 85% of UK tariff lines will be exempt from duty while less duty will be levied on nearly 80% under the standard tier. According to the trade body, travel goods are duty-free under all tiers while clothing is only exempted from duty under comprehensive and enhanced tiers.
The alteration to the criteria for [the enhanced tier] now only involves a simple economic vulnerability criterion. This comes opposite to the EU GSP+ scheme’s human rights criteria. Based on this, almost all non-LDCs now fall under the enhanced tier. Thus, they have duty-free access for all travel and apparel goods,” the GMAC letter clarified.
Travel goods comprise items such as suitcases, backpacks, handbags, wallets and similar items.