How do free trade agreements affect import duty?
A free trade agreement lets goods that genuinely originate in one party enter the other at a reduced rate, often zero. It is a conditional entitlement rather than an automatic discount, and the condition is origin.
Origin is not where the goods were shipped from. It is where they were produced or last substantially transformed, tested against rules written into the agreement itself, product by product.
What the rules of origin ask
Most agreements offer more than one way to qualify. A product can originate because it was wholly obtained in the territory, because its non-originating inputs changed tariff classification during processing, or because enough value was added locally.
Which test applies depends on the product, and the thresholds differ between agreements for the same goods. An item that qualifies under one agreement can fail under another with a stricter value-added rule.
Proving it
The claim has to be supported by evidence in the form the agreement specifies: a certificate, a declaration on the invoice, or a statement made by the exporter and backed by records they can produce years later.
The records are the part that catches people. A preference claimed today can be audited long after the goods are sold, and if the origin evidence has evaporated the duty becomes payable with interest.
Why it is often not worth claiming
On a product with a low baseline rate, the saving can be smaller than the administrative cost of proving origin, especially for a one-off consignment. Working out whether the claim pays is a calculation, not a principle.
On apparel, footwear and other high-tariff categories the arithmetic goes the other way decisively, and the origin work is the single highest-value thing an importer in those categories can get right.
Reading a tariff page correctly
Preferential rates sit beside the baseline on an official commodity page and look exactly as authoritative, because they are. Quoting one without holding the origin evidence is how an importer ends up budgeting a rate they are not entitled to.
This site publishes the baseline deliberately. It is the rate that applies if the origin claim fails, which makes it the safe number to plan against and the right number to compare destinations with.
The agreements you are most likely to meet
| USMCA | Zero duty on most goods between the United States, Canada and Mexico. |
| EU and Canada, CETA | Zero duty on the large majority of tariff lines. |
| EU and Japan, EPA | Zero duty on most tariff lines, phased in over several years. |
| EU and United Kingdom, TCA | Zero duty for goods that meet the origin rules, which is the whole of the work. |
| United Kingdom and Australia | Zero duty on most goods. |
| ASEAN, AFTA | Zero or very low duties between the member states. |
| CPTPP | Australia, Brunei, Canada, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore, Vietnam and, since 15 December 2024, the United Kingdom. UK accession takes effect with Canada on 1 September 2026. |
| India and United Kingdom, CETA | In force 15 July 2026, with the United Kingdom removing duty on almost all Indian tariff lines from day one. |
A worked example
Footwear into the United Kingdom at the baseline rate, a category where a successful origin claim is worth a great deal.
| Goods value on the invoice | 8,000.00 |
| International freight | 300.00 |
| Cargo insurance | 80.00 |
| Value the duty is charged on (CIF basis) | 8,380.00 |
| Duty at 16% | 1,340.80 |
| United Kingdom tax at 20%, charged on the value plus the duty | 1,944.16 |
| Total, before commercial charges | 11,664.96 |
| Estimate uses the CIF customs valuation method, so international freight and insurance are part of the dutiable value. HMRC UK Trade Tariff: the customs value is the price paid plus transport and insurance to the UK border. Rate last verified 2026-08-31. | |
That duty line is the prize an origin claim is competing for, and it is why footwear importers keep their supplier records carefully.
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