Today, Theresa May is expected to outline what the UK government wants the final Brexit deal to look like. A deal can only be done if it works for both the UK and the EU. This speech will be an important signal that progress is being made towards delivering certainty and stability for businesses.
In 2016 the UK had a trade deficit in goods with the EU of £96.5bn, partly offset by a services trade surplus of £14.3bn. Given this and the fact that services account for around 75% of the economy in both the UK and the EU27, it is clear that any mutually acceptable Brexit deal must cover trade in services as well as goods.
Ahead of the Prime Minister’s speech, Miles Celic, Chief Executive Officer, TheCityUK, said,
“The government has already proposed mutual regulatory recognition as the best approach to frictionless trade with the EU. It is an idea Michel Barnier previously endorsed in 2014 during TTIP negotiations with the US. We agree. Mutual regulatory recognition would allow the UK to keep its rules and regulations close to those of the EU. But it would also permit managed divergence in the future on either side of the channel.
“We hope the Prime Minister will set out a bold and compelling vision for a job and growth Brexit - covering both goods and services. Services are the driving force of the British economy and our trade with Europe. To leave services out of a final Brexit deal would be like leaving your best player on the bench in a big match – unlikely to pay off.”