1/ If FT reporting is correct and Johnson willing to just drop Services entirely from EU-UK negotiations, then a deal is more likely.
The UK was always going to have more offensive interests in Services, and wasn't going to be able to sign up to FoM, the key EU ask.
The UK was always going to have more offensive interests in Services, and wasn't going to be able to sign up to FoM, the key EU ask.
2/ That's good news for some tariff exposed sectors desperately needing a deal to remain competitive (most notably agriculture cc @NFUtweets).
Without services on the table, there's no chance of an agreement being scuppered because it fails to meet UK expectations on them.
Without services on the table, there's no chance of an agreement being scuppered because it fails to meet UK expectations on them.
3/ It's bad news for services exporters whether they be in the @cityoflondon or say, road freight operators.
Services was always going to be a hard lift given the nature of FTAs, and the UKs competitiveness, existing openness and reluctance to accept regulatory commitments.
Services was always going to be a hard lift given the nature of FTAs, and the UKs competitiveness, existing openness and reluctance to accept regulatory commitments.
4/ Trying to subsequently get a deal on just services, with goods access already locked in and signed away will be an even harder prospect.
Moreover, domestically in the UK, the pressure on government to "get a deal" will drop off considerably after a goods FTA is in place.
Moreover, domestically in the UK, the pressure on government to "get a deal" will drop off considerably after a goods FTA is in place.
5/ "But doesn't the EU need UK professional services and capital?"
It does to an extent, but doesn't need to offer the UK permanent access through a trade deal to get them.
It can temporarily allow some services to keep flowing, then tighten access at its own pace.
It does to an extent, but doesn't need to offer the UK permanent access through a trade deal to get them.
It can temporarily allow some services to keep flowing, then tighten access at its own pace.
Quick warning about statistics and trade:
The UK economy may be 80% services but most of that is domestic. Important to keep that in mind.
Also, while losing the Single Market will hurt, not having a Services FTA with the EU doesn't mean UK services exports there go to 0.
The UK economy may be 80% services but most of that is domestic. Important to keep that in mind.
Also, while losing the Single Market will hurt, not having a Services FTA with the EU doesn't mean UK services exports there go to 0.
