Two possible reasons. Companies are not using preferential tariffs (0%) because
1⃣ they can’t cause they don’t meet rules of origin (e.g. re-sale of goods imported from elsewhere; or
2⃣ they don’t know how to
/2
Not much you can do about 1⃣. Supply chains adjust over time. Perhaps some of these companies can gradually switch to different suppliers.
/3
No 2⃣ is important. This is what we should be focusing on to increase utilisation.
Education, guidance, advice. This is very needed.
(That's how I spend most of my time- working with companies to get them to the point where they are comfortable with the TCA).
/4
However, here is the key point:
Proving origin is not something you can do in a vacuum as an exporter. You need to work and communicate with your suppliers.
And this is where companies often struggle.
/5
Suppliers are even less aware of origin issues than exporters, some of the info is commercially sensitive.
Seriously, it's often easier to just tell the importer that you will cover the tariffs.
/6
While for UK exports it's the EU importers that pay tariffs you'd be surprised how often the UK companies decide to reimburse their clients just to keep them.
7/7
If you want to know more about preference utilisation and trade data @nicolaskoehler and I wrote a nice blog on this a few years ago :)
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But I also remember where we were in the Brexit debate around the same time and I think the potential impact, scope and trade-offs related to FTAs might not have been fully understood.
/2
To be fair, I recently had an opportunity to ask a few companies about their interest in and "wish list" for these FTAs (not a representative sample) and the interest and level of engagement was really low.
/3
We talked about overlapping agreements - bilaterals vs the CPTPP. @Liam_Sm_Y_th made a good point - that it's the traders that bring these agreements to life.
So...
/2
Combining these two points - with the overlapping trade agreements it's going to be even more crucial to provide UK companies with a good source of reliable information on market access conditions and requirements under all existing deals.
/3
Excellent point from @DmitryOpines on the need for a greater period of reflection and debate before rushing into trade agreements (on @SkyNews)
Trade policy goals/ objectives on the domestic and international levels need to be consistent and aligned!
/1
Dmitry linked it nicely to the environment, agriculture and sustainability.
You can't expect a trade deal to deliver on certain promises if you're not backing it up with domestic policies that are aligned with these promises/objectives.
/2
The need for more analysis and reflection on what future FTAs are supposed to deliver (in a wider context) was also highlighted by @EmilyThornberry, @DavidHenigUK and most of Trade Twitter.
/3