Launch of Developing Country Trading Scheme welcomed by Fairtrade Foundation

The Fairtrade Foundation has welcomed the launch of the Developing Country Trading Scheme (DCTS), announced on Tuesday by the UK Government.

Fairtrade has responded positively to the Government’s decision to lower or remove tariffs on a wider range of products coming from low-income countries, which will support market access for many communities whose livelihood depends on sales to the UK.

However, it has expressed concern about the apparent downgrading of human rights in the Enhanced Preferences tier of the scheme, which now no longer requires countries to uphold international conventions in order to benefit from more enhanced trading preferences.

In launching the DCTS, the Government has taken on board many of the issues raised by Fairtrade, alongside other civil society members, to extend cumulation (the rules by which products from country X will be considered as ‘originating’ from country Y, in order to continue to benefit from preferences) among all DCTS countries and those with Economic Partnership Agreements (EPAs) with the UK. Fairtrade has praised this move, describing it as a step in the right direction for supporting regional integration and value addition in producing countries. It is urging the Government to now review its approach to EPAs to strengthen this approach to regional integration.

Alice Lucas, Advocacy & Policy Manager at the Fairtrade Foundation, said: “Yesterday’s announcement is an important policy initiative for the trade for development agenda. There is much to welcome in the new proposals, including the inclusion of climate and environment in the list of international agreements that must be upheld in order to continue benefitting from the scheme. The removal of human rights conditionality for the Enhanced Preferences scheme is, however, concerning. We look forward to hearing further details of how human rights and environmental commitments will be monitored and enforced.

“In addition, it will be important to continue to monitor the impacts of tariff reductions. The Government has rightly highlighted the risk of preference erosion for low-income countries, and careful monitoring will need to take place to ensure that low-income country products are able to retain preferences.”

The Fairtrade Foundation is also urging the Government to take a leaf out of the DCTS proposals and align its trade policy with human rights, climate and development objectives in future and ongoing Free Trade Agreements (FTAs), and in particular to ensure that any FTA partners are signed up to, and uphold, international human rights and environmental conventions.