Authors Raoul Ruparel
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Off the back of the thread below, lots of people asked for one on services & financial services. So here it is. The deal is very thin in both areas, though that was expected. I don't think it amounts to making the deal unfair/unbalanced but it is a missed opportunity. 1/
First, we shouldn't look at this through the lens of UK having trade deficit with EU in goods & surplus in services. That is too simplistic. EU accounts for a large proportion of UK's goods trade so zero tariff zero quota is beneficial for UK as well for the EU. 2/
Similarly, having a very thin deal on services & financial services is also bad for EU. Belief in some quarters than business will simply move from UK to EU in these areas. But its not that simple. Will be costs & duplication while some business just won't make sense any more 3/
We also shouldn't forget that while services is the largest part of our economy, it is inherently much more domestically focused. Furthermore, the single market in services is less integrated than that in goods so there are already some non tariff barriers to contend with 4/
It is also important to remember how we got here. Services was ultimately deprioritised under the previous Govt Chequers approach. This was because the Govt was seeking frictionless trade in goods. 5/
As many others I'm still working through the detail of the agreement & all the annexes. But some initial thoughts based on my first read & associated documents. My overriding feeling is that it is pretty much exactly as expected in many parts & largely a balanced deal. 1/
— Raoul Ruparel (@RaoulRuparel) December 27, 2020
First, we shouldn't look at this through the lens of UK having trade deficit with EU in goods & surplus in services. That is too simplistic. EU accounts for a large proportion of UK's goods trade so zero tariff zero quota is beneficial for UK as well for the EU. 2/
Similarly, having a very thin deal on services & financial services is also bad for EU. Belief in some quarters than business will simply move from UK to EU in these areas. But its not that simple. Will be costs & duplication while some business just won't make sense any more 3/
We also shouldn't forget that while services is the largest part of our economy, it is inherently much more domestically focused. Furthermore, the single market in services is less integrated than that in goods so there are already some non tariff barriers to contend with 4/
It is also important to remember how we got here. Services was ultimately deprioritised under the previous Govt Chequers approach. This was because the Govt was seeking frictionless trade in goods. 5/