For UK importers and exporters, understanding how FTAs work isn’t just practical; it can give you a real commercial advantage (and save you from paying more duty than you need to).

What is a Free Trade Agreement? 

An FTA can be referred to by different names, but the theme remains the same: two or more countries agree to lower trade barriers. This usually means cutting or removing Customs duties (those pesky taxes on imports), agreeing on clear product standards, and smoothing out Customs procedures so you’re not bogged down in red tape. In short, FTAs are trade’s way of saying: “let’s make life a bit easier” and bring down the costs.

If you’re buying from a country the UK has an FTA with, chances are you’ll pay lower import duties, sometimes zero. That means more money stays in your business (or your pocket). FTAs also widen your supplier options. You’re not just stuck shopping from the same old markets; you get a bigger catalogue of potential suppliers, often with better prices.

And let’s not forget the Developing Countries Trading Scheme (DCTS), which is akin to the UK providing a helping hand to suppliers in less-developed countries. It’s not just good for your margins; it’s also good for global development. Win-win.

If you’re selling UK goods abroad, an FTA can significantly enhance the appeal of your product. Why? Because your overseas customers don’t have to pay hefty tariffs to import them. That could be the edge that gets you into new markets. Some FTAs also streamline the paperwork. Fewer forms, fewer arguments at the border, and fewer grey hairs for you (too late for me!)

Of course, nothing’s ever entirely free – what’s the catch? Specific Product Rules of Origin apply. To claim the benefits of an FTA, you need to prove your goods meet the Rules of Origin in that agreement. This doesn’t mean you don’t just have to know where you shipped from — it means where the product was made. And this might not be as easy as it sounds. 

You need to understand other areas of Customs regulations to assess whether goods qualify under the terms of an FTA, that is, whether they qualify for lower duty rates or simplified procedures. You’ll need to check your product’s commodity code (also known as the Harmonised System code, HS Code, or Tariff number) and understand the specific Origin rule applicable to those under that code. And then you will need to keep records (because HMRC loves records). The records need to include the correct Proof of Origin—but under UK FTAs, that is often just a simple declaration on your invoice.

It is worth learning about FTAs because they can save you money, boost your competitiveness, and give you access to markets you might not have considered. But it’s a big but, only if you understand and use them correctly.

FTAs might sound like something only trade lawyers or policy experts care about, but for small businesses, they can be the difference between “just surviving” and “seriously thriving.” Think of them like a gym membership: having one doesn’t magically get you fit — you have got to know how to use it. But once you do, the benefits can be huge. And if the jargon still makes your head spin, you don’t have to figure it out alone.

Strong & Herd’s training is like a friendly personal trainer for your Customs paperwork — breaking it down into steps, showing you the correct technique, and keeping you from injuring yourself (financially, in this case). So don’t leave money on the table. Learn how to flex those FTAs and turn “trade barriers” into “trade opportunities.”