In the second part of a series of in-depth reviews of critical skills for a successful career in trade, we’re considering the importance of understanding how your goods are made.
In ‘Seven Skills for Success in Global Trade’, a report published by the Chartered Institute of Export & International Trade, experts highlighted the importance of knowing how goods are made for multiple customs processes and decisions.
How your goods are made
The report notes that “understanding the materials, manufacturing processes and ultimate purpose of a product” is not only necessary to ensure compliance with regulatory requirements, but can also help you to reduce costs, when accurately claiming preferential rates.
The UK currently has over 40 active free trade deals with over 100 countries. Within these deals, there are provisions enabling firms to claim lower duties if it can be proven that enough of the economic value of the product was derived from participating countries.
This means that it’s highly beneficial to have a good grasp of the full length of your product’s supply chain, including the manufacturing processes and where it takes place.
Sustainability
Chartered Institute trade and customs specialist Andy Bridges explains that understanding a product’s production process is especially important in light of pushes by some nations towards sustainability.
Noting the EU’s new Carbon Border Adjust Mechanism (CBAM) – a cross border levy applied to goods with carbon-intensive production processes – Bridges said:
“Understanding the supply chain can help trade professionals identify ethical or environmental issues, allowing them to make informed decisions about sourcing.
“This awareness can enhance your brand's reputation, support sustainability efforts and ensure your firm remains competitive in a market that increasingly values transparency and responsibility.”
Learn more
If you want to upskill and learn more about the customs implications of how your goods are made, you can take the Chartered Institute’s Rules of Origin day-long training course.
There’s also a more interactive practical workshop, which offers learners the opportunity to tackle scenario-based customs challenges about rules of origin in a group setting.