How to Use UK Trade Agreements to Pay Less Import Duty

Why Trade Agreements Matter for Importers

Trade agreements reduce or eliminate import duties — and they exist in every major importing country, not just the UK. The US has agreements like USMCA, Australia has AUSFTA, and the EU has dozens of bilateral deals. When you import goods into the UK, customs duty is calculated based on the product's commodity code and, critically, the country of origin of the goods. The UK's standard (Most Favoured Nation) duty rates apply to all countries by default — but if the goods originate from a country that has a free trade agreement (FTA) with the UK, you may be entitled to a reduced or zero rate of duty.

These savings are not automatic. You need to know which agreements are in place, whether your goods qualify, and what documentation to provide. Many importers pay thousands of pounds more than necessary simply because they do not claim preferential rates they are entitled to.

The UK's Major Free Trade Agreements

Since leaving the EU, the UK has established an extensive network of trade agreements. Here are the most significant ones for importers:

EU-UK Trade and Cooperation Agreement (TCA)

The TCA provides for zero tariffs and zero quotas on goods traded between the UK and EU member states — provided the goods meet the relevant rules of origin.

This is the most impactful agreement for UK importers, given that the EU remains the UK's largest trading partner. However, it is also where the most mistakes are made, because the rules of origin requirements can be complex and goods that merely transit through the EU (but originate elsewhere) do not qualify.

Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP)

The UK acceded to CPTPP in 2023, joining Australia, Brunei, Canada, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore, and Vietnam. This agreement provides preferential access to a significant bloc of economies in the Asia-Pacific region.

Key benefits include reduced or zero tariffs on many manufactured goods, agricultural products, and raw materials. The rules of origin under CPTPP allow for cumulation — meaning materials sourced from any CPTPP member can count toward the origin requirements.

UK-Japan Comprehensive Economic Partnership Agreement (CEPA)

Building on the EU-Japan agreement, this provides preferential rates on a wide range of Japanese goods entering the UK. Particularly beneficial for importers of vehicles, electronics, and machinery.

UK-Australia Free Trade Agreement

This agreement eliminates tariffs on the vast majority of goods traded between the UK and Australia, with some agricultural products subject to transitional tariff rate quotas. Most industrial and manufactured goods qualify for zero duty immediately.

UK-New Zealand Free Trade Agreement

Similar in scope to the Australia agreement, this provides preferential access for New Zealand goods. Particularly relevant for agricultural products, wine, and certain manufactured goods.

UK-Turkey Customs Arrangement

Turkey and the UK have a trade agreement that covers most goods falling within the EU-Turkey Customs Union scope. Industrial goods generally benefit from zero or reduced tariffs, though agricultural products are covered separately.

Developing Countries Trading Scheme (DCTS)

The UK's DCTS replaced the old EU GSP (Generalised Scheme of Preferences) and provides preferential tariff rates for imports from developing countries. It has three tiers:

• Comprehensive Preferences — duty-free, quota-free access for Least Developed Countries (LDCs) such as Bangladesh, Cambodia, and Ethiopia
• Enhanced Preferences — reduced tariffs for countries meeting certain economic and sustainability criteria, including many South Asian and African nations
• Standard Preferences — modest tariff reductions for other eligible developing countries

The DCTS is particularly important for importers of textiles, garments, footwear, and agricultural products from South and Southeast Asia.

Other Notable Agreements

The UK also has trade agreements with:

• Canada (UK-Canada continuity agreement)
• South Korea (UK-Korea FTA)
• Switzerland and Norway (via EFTA-related agreements)
• Singapore (UK-Singapore FTA)
• Kenya and other East African Community members
• Israel (UK-Israel Trade and Partnership Agreement)

You can check the full list of UK trade agreements on GOV.UK or use the HS Code Lookup to see the applicable duty rate for your product from a specific origin country.

How Preferential Tariff Rates Work

Under standard MFN rates, you might pay 12% duty on a product. Under a relevant FTA, the rate could drop to 0%. But the preferential rate only applies if:

1. The goods genuinely originate in the FTA partner country — they meet the agreement's rules of origin
2. You hold valid proof of origin — the correct documentation is in place at the time of import
3. You claim the preference on your customs declaration — it does not apply automatically

Rules of Origin Explained

Rules of origin are the criteria used to determine where a product was made. They exist to prevent goods from non-FTA countries being routed through an FTA partner to avoid duty (trade deflection).

Common rules of origin criteria include:

• Wholly obtained — the product is entirely grown, mined, or produced in the FTA country (e.g., raw agricultural products, minerals)
• Sufficient processing/manufacturing — the product has undergone enough transformation in the FTA country. This is usually defined by one or more of:
  • Change in tariff classification — the finished product falls under a different HS heading than the imported materials
  • Value-added threshold — a minimum percentage of the product's value must have been added in the FTA country (commonly 40-55%)
  • Specific manufacturing process — certain products must undergo defined production steps

Each FTA has its own product-specific rules of origin, set out in the agreement's annexes. You need to check the specific rule for your product's commodity code under the relevant agreement.

Proof of Origin Documents

To claim preferential rates, you need one of the following documents, depending on the FTA:

Origin Declaration (Self-Certification)

Many modern FTAs (including the EU-UK TCA and CPTPP) use origin declarations — a statement made by the exporter on the commercial invoice or other commercial document. The exporter certifies that the goods meet the rules of origin.

For the EU-UK TCA, the declaration text is prescribed and must include the exporter's reference number (REX number for EU exporters, or EORI for UK exporters).

EUR1 Movement Certificate

Used under some older FTA frameworks, the EUR1 is a formal certificate stamped by customs authorities in the exporting country. It certifies that the goods originate in that country under the relevant agreement.

Form A (Certificate of Origin)

Used under the DCTS/GSP framework for developing country preferences. The Form A is issued by an authorised body in the exporting country.

Statement on Origin

Under CPTPP and some newer agreements, a statement on origin can be provided by either the exporter or the importer (depending on the agreement's provisions).

Important: You must hold the proof of origin at the time of import. If you do not have it when the goods arrive, you can still pay the full MFN duty and claim a refund later — but this ties up cash and requires a repayment claim to HMRC.

Real Savings Examples

Here are practical examples showing the impact of claiming preferential rates:

Example 1: Cotton T-Shirts from Bangladesh

• Commodity code: 6109 10 00 10
• MFN duty rate: 12%
• DCTS (Comprehensive Preferences) rate: 0%
• Shipment value (CIF): $62,500
• Duty saving: $7,500

Example 2: Industrial Machinery from Japan

• Commodity code: 8479 89 97 00
• MFN duty rate: 1.7%
• UK-Japan CEPA rate: 0%
• Shipment value (CIF): $250,000
• Duty saving: $4,250

Example 3: Wine from Australia

• Commodity code: 2204 21 06 00
• MFN duty rate: $1.60 per litre (specific duty)
• UK-Australia FTA rate: $0 per litre (post-transition)
• Shipment volume: 10,000 litres
• Duty saving: $16,000

These savings compound over multiple shipments throughout the year. An importer regularly sourcing from FTA partner countries can save tens of thousands of dollars annually.

Common Mistakes When Claiming Preferences

1. Not Claiming at All

The most expensive mistake. Many importers — especially those new to the process — simply pay the standard duty rate without checking whether a preferential rate is available. Always check the Duty & Tax calculator for your product and origin country combination.

2. Assuming Transit Equals Origin

Goods shipped from an FTA partner country do not automatically originate there. A product manufactured in China and shipped via a distribution centre in the EU does not qualify for EU-UK TCA preferences. The origin is determined by where the goods were produced, not where they were dispatched from.

3. Invalid or Missing Proof of Origin

The origin declaration must meet the precise requirements of the relevant FTA. Common errors include:

• Missing exporter reference numbers
• Incorrect wording on self-declarations
• Expired certificates (some have validity periods)
• Proof of origin not matching the goods actually imported

4. Not Checking Product-Specific Rules

A product may be manufactured in an FTA partner country but still fail to meet the rules of origin if it uses too many non-originating materials. Always verify against the product-specific rules in the agreement.

5. Relying on the Supplier Without Verification

Your supplier may tell you the goods qualify for preferential rates, but it is your responsibility as the importer to ensure the documentation is correct. HMRC can audit your claims and demand back-payment of duty plus penalties if the preference was incorrectly claimed.

How to Start Claiming Preferential Rates

1. Identify your product's commodity code using the HS Code Lookup — see our guide on how to find the correct HS code if you need help
2. Check if a preferential rate exists for your product from the country of origin
3. Request proof of origin from your supplier before the goods ship
4. Verify the documentation meets the FTA requirements
5. Instruct your broker to claim the preferential rate on the customs declaration (or enter the correct preference code if self-declaring)

The effort required is minimal compared to the savings available. Make checking for trade agreement preferences a standard part of your import process.

Start Saving on Import Duty Today

Use the Import Calculator to see how preferential duty rates reduce your landed cost, and check the Duty & Tax calculator to compare MFN and preferential rates for your product.

Related reading: For a full overview of customs duty rates UK 2026 by product category, see UK Import Duty Rates 2026. If you are just getting started, our First-Time Importer UK guide covers everything from EORI registration to clearing goods through customs.