The UK’s £225 billion professional services industry is in danger of losing EU business after transition ends on 31 December, reports the FT.
A parliamentary committee report published today warns that the UK service sector could lose out even if a ‘Canada-style’ trade deal is struck by the end of the year.
The EU services subcommittee concludes that contracts and jobs remain at risk unless a bespoke deal for exporting services is hammered out.
Sector overlooked
Committee chair, Baroness Donaghy said there was concern that the sector, which accounts for four and a half million jobs, had been overlooked. “This sector, and the people who depend on it for their livelihoods, will suffer it its needs are not reflected in the UK’s negotiations with the EU,” she said.
The committee noted that even under a Canada-style deal, cited by Prime Minister Boris Johnson, professional services companies would be hampered in their ability to export to the EU. The report says EU countries could use “national reservations” to protect their own services sectors from competition from the UK.
Protectionism
Carve-outs could include demands for foreign nationals to reside in the country, to adopt certain corporate structures, or show that talent is not available locally. There are also concerns that the recognition of qualifications and regulations from the UK could be used as a protection barrier.
The report reflects the concerns raised by Terry Scuoler, chairman of the Institute of Export & International Trade, in an interview with the Daily Update bulletin this summer.
He said that with the EU accounting for 40% of UK services exports in 2018, securing a meaningful trade deal before the end of the year was essential.
“The EU single market for services is far from perfect. Nonetheless the EU accounts for £300bn annually of our exports of goods and services and the absence of a trade agreement would make the process, both of exporting and importing, more complex,” he said.