Peter Foster @pmdfoster Europe Editor of the Daily Telegraph. Formerly based in Washington DC, Beijing and New Delhi. Opinions my own. Mar. 07, 2018 2 min read

The EU is about to launch it's draft guidelines on trade and the future EU-UK relationship.

We understand it will offer an "FTA" to the UK.

One big question is what that will mean for services.

The CBI @CBItweets has put out a paper on this.

Some choice cuts. THREAD

The biggest and best deal the EU has ever done is the Canada deal, CETA. It is "patchy" on services which accounts for almost 80% of the UK’s GDP and 4 in 5 jobs across the country. The EU is the single largest destination for UK services – worth c £90bn a year to the UK economy

Citing research by NIESR it warns that for services trading under FTA terms would be the same as doing it under WTO terms.

This would have a disproportionate impact on some of the most pro-Brexit areas of the UK. /3

The CBI is clear that using GATS 'modes' on services - like Mode 4 which provides for, say , a lawyer to go to Paris and provide services to a client would be very indadequate. /4

Accordingly the UK needs a deal on mutual recognition of qualifications - which they are likely to get, but maybe with strings/complications.

The UK also needs to sort out the ongoing validity of legal contracts like insurance policies./5

Barriers to services access will hit 'fly-in-fly-out' providers, like accountants, management consultants, lawyers etc who provide services at short notice by flying into the EU.

If that gets costlier, trickier, then EU businesses will likely use EU service providers. /6

The paper notes the need to have mutual access to the 1.5 trillion euro Government Procurement market - and the mutual, if lopsided interest in making this happen. /7

All this stuff is complicated to negotiate, will take time - which is why CBI and others are hammering May and UKG on need for a transition deal in March.

It says 61% of UK businesses are planning for 'no deal' worst case. But... /7

The complexity will add bureaucratic burden to the UK which will now need to negotiate independently in a host of world trade and regulatory bodies...though this could be a potential advantage. /8

But all that said - and EU warnings against cherry-picking to come - there is a basic interest to co-operate.

But as Mr Tusk is about to warn, it will not be easy. And there will be costs. /9

In closing, here are CBI's Five Steps UK negotiators need to take to protect UK services industries.

10/ENDS

PS. This is link to NIESR research cited by @CBItweets

 https://www.niesr.ac.uk/blog/will-new-trade-deals-soften-blow-hard-brexit 


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