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Made in Britain
How do I know if a product is made in Britain?
Estimated reading time: 6 minutes
If you had the pleasure of reading the last blog on how to know if a product is made in France and found French law and certificates complex, you’re in for a treat with the British side of things which, using the international trading system, is far worse. So much so, in fact, that it feels almost intentional.
Unlike France, for which the different 'Made in France' certifications are a strong selling point, Britain has not (yet) used customs or independent certification to monetize any Made in Britain certifications. It therefore relies on the internationally recognized system of free trade policies determined by trade deal negotiations between member countries. Free trade agreement details between member countries depending on product can be found on the International Trade Center's wonderful Rules of Origin Facilitator.
If this is your cup of tea, the World Trade Organisation goes into more detail.
Broadly speaking, depending on the product classification and the countries involved, different trade agreements dictate whether or not a product can be considered as Made in Britain.
What are the Rules of Origin?
The Rules of Origin establish the country of origin of a product and cover preferential and non-prefential origins.
Preferential origin
Preferential origin concerns 'wholly obtained' or 'sufficiently worked or processed' goods. They give members of the agreement preferential trade tariffs. Each product is categorised according to the Harmonised System; which, in turn has a specific agreement and rule of origin.
We’ll start with the easiest path - ‘wholly obtained’, which means goods are manufactured using raw materials from Britain in Britain. Think vegetables, livestock, wooden furniture.
What is substantial transformation?
The rule of 'substantial transformation' is generally recognized worldwide and Britain is no exception. It states that goods which are manufactured in Britain using materials from foreign countries have to be ‘sufficiently worked or processed’ in Britain to be considered as ‘made in Britain’.
The tricky part comes next; each product has its own agreement which details the rules it must comply with to be considered ‘sufficiently worked or processed’. In addition, there are different rules for products destined for import, export, or both. This information can be found in the trade agreements between the countries or the Generalised Scheme of Preferences.
And it gets worse - the ‘sufficiently worked or processed’ rule does not apply when cumulation is allowed by the agreements between partner countries. Cumulation means that work done in a partner country is considered as being done on British soil, up to a point. It can be bilateral, diagonal, regional, or full.
What is the value added rule?
The value added rule applies to both imports and exports. It sets out the maximum value materials from a foreign country can have in a finished product. The product can be considered as originating from Britain if the percentage of the manufacturing costs are not more than the ‘ex-works’ value (total price of the product upon leaving the factory) according to the relevant trade agreement between the countries and the classification of the product.
The British government give the following example on their website:
Say the trade agreement states that the value of the materials originating in another country must not exceed 60% of the product’s ex-work price.
Ex-work price = £1, 000
Costs to make the finished product = £550.
The percentage = 550/1 000 = 0.55
0.55 x 100 = 55.
As 55% is less than 60%, the product can be considered as made in Britain.
Non-preferential origin
Non-preferential origin concerns goods coming from countries without agreed preferential trade agreements.
What are the rules of origin when exporting goods?
1. The product must have a different commodity code in the Harmonised System than that of the goods imported from different countries to manufacture it.
2. Specific processing of certain materials must have taken place in the UK at a specific point.
3. Only insufficient production involving minimal, simple operations are performed on the product in a different country. The operations are qualified as ‘simple’, if they do not require special skills or machinery.
What are the rules when importing goods from a country which is not in the trade agreement?
1. The total added value acquired by the product by the work done in the country must not exceed the set percentage of the ex-works price.
2. The total value of the materials from the country outside of the trade agreement summed with the total added value of materials from a country within the trade agreement must not exceed the value given in the annex of list rules.
3. The exporter must provide all the documents related to the total value acquired in the country outside of the trade agreement.
What other things should we know about the rules of origin?
- Accessories and spare parts are considered part of the product if they are included in the price as standard, or are classified with the product in the import tariff.
- Things used in production which do not form part of the finished product are not taken into account (energy, machines, equipment etc)
What are the downsides of the Rules of Origin?
If you’ve managed to stay awake during that, you’ll see that ‘Made in Britain’, although a worthy cause, does not always, in fact, mean Made in Britain. Half of the product could have been manufactured in another country, with materials sourced from elsewhere and still be labelled as ‘Made in Britain’ if the country trade agreements allow.
What’s more, the loophole represented by cumulation means that, unless we look at the cumulation rules for each product between the given countries, we actually have almost no idea of where the product was made and who by.
Of course, the issue is complex and production chains can be long. It is unreasonable to suggest that all products can be evaluated using the same criteria. Some raw materials are not available in the UK, some processes are better done elsewhere.
While consumers try their best to support local industry and tradespeople, the Rules of Origin complicate the issue and don’t take some key issues into account:
- The availability of raw materials and processes on British soil. Some things can be done here, but they are not. Others cannot be done here. All products are not equal and profit margins are more important to some than others.
- The proximity of production and transport costs. A product made in Edinburgh and sold in Bristol is made in Britain, but it has more transport pollution linked to it than the same product made in Bristol.
- The support of small independent artisans who don’t have the resources, or prefer not, to outsource and take advantage of specific Rules of Origin or cumulation.
What can be done to overcome the problems?
A more flexible system in which the customer can contact the artisan or creator themselves and decide whether their goods match their requirements in terms of proximity, sourcing and ethics.
How can we support local, independent artisans, creators and artists?
You’ve guessed it, to find local artists you can use natifcreatif, or visit local markets and start talking to the creators behind the products.
