An agreement to renew the Services Mobility Agreement (SMA) between the UK and Switzerland for a further three years is a great win for financial and related professional services.
The UK is the world’s ideas factory: its strengths are in services sectors which make up 80% of GDP and contribute consistently strong trade surpluses - £127 billion in 2021 alone.
The global success of British services businesses allows them to create jobs throughout the country. Professional and business services sectors provide 4.9 million jobs and financial services businesses provide 1.1 million jobs – two thirds outside of London.
Across the country, British workers are using their creative skills to develop high-value services for export. Examples of how UK services are making people’s lives better include:
British businesses could achieve so much more internationally if the UK government focuses its trade policy objectives on removing services trade barriers that are holding them back, such as:
Equally, UK trade promotion efforts should prioritise UK services: the government should provide services businesses, especially SMEs, with timely advice about market dynamics in key international countries and hold trade shows that highlight UK services just as much as UK goods.
It’s time for the UK to get serious about services trade. Trade agreements, export drives, and trade promotion efforts will only deliver value for the UK if they reduce services trade barriers.
1. Remove barriers to cross-border services trade, especially in activities like insurance, financial and investment advisory services, and e-payment services.
2. Remove restrictions that hold UK businesses back from opening international offices and businesses like foreign investor equity caps, joint venture requirements, economic needs tests, nationality and residency requirements.
3. Help UK entrepreneurs, professionals and employees develop face-to-face relationships with global clients by securing faster business visa turnaround times and ensuring that UK workers can work abroad for longer periods. Equally, the UK should help UK businesses bring in highly skilled international workers from overseas offices for short term projects by removing the need for UK businesses to apply for intra-company transfer visas and widening business visitor rules.
4. Provide for the mutual recognition of professional qualifications so that UK professionals can practise in regulated professions overseas.
5. Guarantee digital trade and the data flows vital to all services businesses, by enabling cross-border data flows, preventing unjustified data localisation rules, recognising the validity of e-signatures and e- contracts, and protecting digital intellectual property.
6. Safeguard UK innovation by ensuring that all trade agreements contain robust intellectual property protections and prevent the theft of trade secrets, including by cyber theft.
7. Establish regular regulatory dialogues between UK and partner country regulators that cover financial services and other highly regulated services. These dialogues, with industry participation, should explore how regulators can better align existing regulations, collaborate on emerging regulations, and recognise the validity of each other’s regulatory approaches to boost cross-border services trade, and influence global regulatory best practice.
8. Ensure fair treatment of UK businesses in other jurisdictions, by requiring the trade partner’s regulators to allow them reasonable time to comment on proposed regulatory measures that affect them, and by operating fair, transparent rules on awarding licences and qualifications.
9. Protect UK savers and pensioners by safeguarding overseas investments through effective investor dispute resolution mechanisms offering adequate, effective, and prompt compensation, and protect UK consumers by ensuring that trade agreements require services to be provided with reasonable skill and care and in a reasonable time.
10. Secure effective government procurement arrangements in markets worldwide, giving UK businesses a fair chance to bid for government contracts related to financial and professional services, including government-sponsored financial services like pensions and health insurance.