The term duty suspension is used in relation to free trade and opening up economic opportunities.
It has considerable benefits for consumers and businesses alike, helping to make buying and selling goods more attractive and developing new markets.
What is duty suspension and what does it mean for businesses looking to import or export goods?
What is duty suspension?
Duty suspension is a valuable tool that governments use to promote international trade and economic development.
It refers to a temporary exemption or reduction of import duties and taxes on specific goods. This mechanism is designed to facilitate trade, encourage domestic production, and attract foreign investment.
By implementing duty suspension measures, national governments aim to enhance competitiveness, boost economic growth, and provide businesses with cost-saving opportunities.
Duty suspension can apply to specific products or sectors and is intended to foster economic activity and enhance trade competitiveness. National governments may grant duty suspension for reasons like supporting domestic industries, stimulating innovation, attracting foreign investment, or responding to market demand.
Duty suspension can take different forms, including complete exemption from import duties, reduced rates, or the deferral of duty payments. This temporary relief enables businesses to import goods at a reduced cost or, in some cases, duty free.
By reducing the financial burden associated with imports, duty suspension encourages businesses to engage in international trade, access new markets, and expand their operations.
What are the benefits of duty suspension?
Duty suspension offers businesses the advantage of importing goods at a lower cost or duty free, enhancing their competitiveness in domestic and international markets. This cost-saving opportunity enables businesses to supply more affordable products to consumers. It also provides businesses with access to components and raw materials at reduced prices.
It streamlines the import of goods by eliminating or reducing administrative burdens and costs. This encourages businesses to engage in international commerce, expand their customer base, and explore new market opportunities.
Duty suspension measures can be specifically developed and implemented to support domestic industries by reducing the costs associated with importing essential components or machinery.
This support enables domestic businesses to compete more effectively with overseas competitors, stimulates innovation, and encourages investment in sectors crucial to the national economy.
Through the implementation of duty suspension measures, governments can create an attractive environment for foreign investors. Reduced import duties and taxes decrease the cost of establishing or expanding operations in a country, making it a more favourable destination for foreign direct investment (FDI). This, in turn, can lead to job creation, technology transfer, and the development of strategic partnerships between domestic and overseas companies.
In short, duty suspension reduces some of the barriers to trade that stimulate economic growth and activity. It can be used as a tool by governments to develop trade, foster growth in specific markets and get the economy moving.
In the UK, it is particularly associated with the new generation of freeport sites that are currently being developed.
Duty suspension and Freeport Liverpool
Freeport Liverpool gives businesses access to duty suspension, duty exemption on re-exports and flexibility on how duty is calculated. This means that businesses located within the freeport can gain a real competitive advantage.
Contact us to find out more about Freeport Liverpool and our own role in helping businesses maximise the advantages it can offer