ISLAMABAD-In an effort to strengthen economic ties with Pakistan, the United Kingdom has unveiled a new initiative called the Developing Countries Trading Scheme (DCTS).
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. 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.
UK Minister for International Trade Nigel Huddleston launched the scheme during a visit to Ethiopia’s largest industrial business park, Bole Lemi. Under the DCTS, Pakistan has retained its enhanced preferences status and will continue to benefit from duty-free exports to the UK on 94 percent of goods exported. It will also remove tariffs on over 156 additional products, and simplify some seasonal tariffs. Total trade (goods and services) between the UK and Pakistan each year currently stands at £4.4 billion. It is expected that £120 million in tariffs will be saved on exports to the UK under the scheme. 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 on meeting trade standards, and participating in multilateral trade forums. 
UK’s Trade Director for Pakistan and British Deputy High Commissioner, Karachi, Sarah Mooney, said: “This is a major development in the trading relations between the UK and Pakistan. 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.’’
Meanwhile, Federal Commerce Minister Syed Naveed Qamar praised the DCTS, which aims to provide Pakistan and 64 other countries with improved trade opportunities through tariff reductions and simplified terms of trade. While announcing the launch of the DCTS, Syed Naveed Qamar said: “Pakistan will enjoy one of the most generous sets of trading preferences offered by any nation in the world.” The scheme officially replaced the UK’s Generalised Scheme of Preference (GSP) on June 19, 2023.
The current bilateral trade between Pakistan and the UK stands at a substantial $4.4 billion, and with the implementation of the DCTS, both nations anticipate a significant boost in trade volume and economic cooperation, highlighted by Minister Qamar. It is projected that Pakistan will save approximately $120 million in export tariffs under the DCTS, which will facilitate greater competitiveness for Pakistani exporters in the UK market. 
This development is seen as a positive step towards strengthening the economic partnership between the two countries. Syed Naveed Qamar said: “Under the DCTS, an impressive 94 percent of goods exported from Pakistan will be eligible for duty-free access to the UK.” This measure is expected to encourage the expansion of various sectors within the Pakistani economy, including textiles, agriculture, and manufacturing, Minister Qamar’s remarked. Furthermore, Minister Qamar acknowledged that Pakistan’s “Enhanced Preferences” status has been retained, providing the country with added advantages in terms of trade incentives and market access. 
This recognition reinforces the commitment of the UK to foster trade relationships with developing countries like Pakistan. Minister Qamar emphasised that the DCTS signifies the UK’s dedication to creating a more inclusive and mutually beneficial trading environment, which will stimulate economic growth in both nations. He expressed confidence that the tariff reductions and simplified trade terms introduced by the initiative will encourage increased bilateral trade, leading to enhanced prosperity and development for Pakistan. With the DCTS coming into effect, Pakistani exporters and business communities are eagerly anticipating the opportunities it will unlock. This initiative is expected to deepen the historic ties between the UK and Pakistan, and pave the way for a more prosperous future characterised by robust trade relations and shared economic growth, said Syed Naveed Qamar.
As the DCTS comes into effect, the Ministry of Commerce will work closely with relevant stakeholders to ensure that Pakistani exporters are aware of the scheme’s benefits and can capitalise on the new opportunities it presents. Pakistan, as one of the countries benefiting from the DCTS, is well-positioned to leverage this opportunity for its economic growth. With increased access to the UK market, Pakistani businesses can expand their exports, tap into new consumer bases, and diversify their product offerings. The ministry will provide guidance and support to facilitate the seamless integration of Pakistani businesses into the UK market, further enhancing bilateral trade relations.