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UK CARIFORUM FTA: How to trade with Caribbean countries for zero duty

(S,P) Trade between the Caribbean countries and the UK is facilitated by an EPA. What is that and how do firms benefit?


Why does this agreement matter?

The EPA had secured continuity of a trading relationship worth £2.9 billion in 2020. The agrement covers a wide range of topics such as:

  • tariff liberalisation,

  • trade in goods and services, and

  • Geographical Indications.


Is the agreement fully in force?

The agreement is applied, but not formally legally in force. The CARIFORUM-UK EPA was first signed on 22 March 2019 by nine CARIFORUM States: Barbados, Belize, The Commonwealth of Dominica, Grenada, The Republic of Guyana,

Jamaica, Saint Christopher and Nevis, Saint Lucia and Saint Vincent and the

Grenadines.


The CARIFORUM-UK EPA was signed on 1 April 2019 by The Republic of

Trinidad and Tobago and on 4 April 2019 by The Dominican Republic.


The full ratification of the EPA by all parties is still pending, so the parties agreed to continue to work towards the effective implementation and operation of the Agreement and agreed to hold further meetings of the Joint Institutions on mutually agreed dates.


Which countries are in it? The 14 countries that are covered by the CARIFORUM-UK EPA are:

  1. Antigua and Barbuda

  2. Barbados

  3. Belize

  4. The Commonwealth of the Bahamas

  5. The Commonwealth of Dominica

  6. The Dominican Republic

  7. Grenada

  8. The Republic of Guyana

  9. Jamaica

  10. Saint Christopher and Nevis

  11. Saint Lucia

  12. Saint Vincent and the Grenadines

  13. The Republic of Suriname

  14. The Republic of Trinidad and Tobago


Rules of Origin

In trade agreements, Rules of Origin are used to determine the economic nationality of a good. To qualify for preferential tariff rates, a good must “originate” in the territory of one of the parties to the agreement. Trade agreements may also allow materials originating and/or processing in a country other than the exporting party to count towards meeting the specific origin requirements for preferential treatment, a process known as “cumulation”.


There are two categories relevant to determining whether goods “originate” in the

exporting country for the purposes of a:

a) Wholly obtained – these are goods that are wholly obtained or produced entirely in a

single country. Examples include 1) Mineral products extracted from the soil; 2) live

animals born and raised.

b) Substantial transformation – these are goods that are made from materials which

come from more than one country, and the origin is therefore defined as that of the

country where the goods were last substantially transformed. This can be determined

in three ways:

  1. Value added – this type of rule requires that a proportion of the final value of the product be added in the exporting country.

  2. Change in Tariff Classification (“CTC”) – This type of rule requires that the final product be sufficiently different from the imported materials so that it moves to a different tariff classification altogether.

  3. Specific processing or manufacturing – These rules typically apply where value-added or CTC rules may not adequately determine originating status, and where specific processes are required to meet originating criteria.

To provide maximum continuity for business, it has been agreed in the CARIFORUM-UK EPA that EU content and processing can be recognised (i.e. cumulated) in UK and CARIFORUM States’ exports to one another. The cumulation arrangements are set out in detail in the Title II (Definition of the concept of ‘originating products’) of the Rules of Origin Protocol and subject to satisfying the conditions specified in the CARIFORUM-UK EPA.


The CARIFORUM-UK EPA provides only for trade between the UK and CARIFORUM States and does not provide for either Party’s direct trade with the EU, including, for example, where UK and exporters based in CARIFORUM States use content from each

other in exports to the EU.


Links:

The Agreement


Downloads

Parliamentary Report


CARIFORUM-UK-EPA overview of the agreement 2021
.pdf
Download PDF • 648KB


Practical Customs & Global Trade Guidance


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