On Monday the British government launched a consultation process for its proposed new rules for trade between the UK and some 70 low-income and lower-middle-income developing countries. The new rules are called the Developing Countries Trading Scheme (DCTS) and are intended to help developing countries use trade as a means to achieve development and reduce poverty, while also benefitting British consumers and businesses.

Hitherto, the UK has continued to use a scheme for trade with developing countries that it inherited from the European Union (EU). But London now wants to replace this with an approach that is more generous, simpler and pro-growth. The proposed DCTS would have, for example, simplified rules of origin for the least developed countries. It would also lower tariffs on developing country exports to the UK and allow them to diversify their exports to Britain, thereby growing their economies. British consumers and businesses would benefit from greater choice and cheaper prices.

“Trade fundamentally empowers people and has done more than any single policy in history to lift millions of people around the world out of poverty,” highlighted UK International Trade Secretary (equivalent to Minister in South Africa) Liz Truss. “Now the UK is an independent trading nation we have a huge opportunity [to] do things differently, taking a more liberal, pro-trade approach that leads to growth and opportunity.”

Although the DCTS will not be unique, the UK government is seeking to make it the best such scheme in the world. To this end, it has studied equivalent programmes run by Canada, the EU, Japan and the US, and taken some of the best parts of them, and then built on them. The consultation process will run for eight weeks and is open to associations, businesses, civil society groups, consumers, the general public, partner governments and any other interested parties.

“Cutting tariffs for poorer countries enables them to trade their way to genuine independence – and I’m proud we lead the world in offering that opportunity,” affirmed UK Foreign Secretary Dominic Raab. “Countries like Bangladesh and Vietnam have proven it’s possible to trade your way to better living standards, and our new Developing Countries Trading Scheme will help others do the same,” added Truss.

Using existing trading schemes, Bangladesh more than doubled its exports to the UK between 2009 and 2019. Its export successes drove an average annual growth rate of 6.6% during that time. From 1991 to 2016/17, the country cut its extreme poverty rate by 50%. Also over the period 2009 to 2019, Vietnam more than tripled its exports to the UK and achieved an average annual growth rate of more than 6%. Over the period 2010 to 2020, the country cut its poverty rate from more than 20% to about 5.9%.