A former Assistant Director at the Department for International Trade is sceptical that new FTAs can transform our services exportsby David Henig / June 14, 2018 / Leave a comment
It is widely accepted in the Brexit debate that the UK’s ability to set our own trade policy after departure means that we can focus particularly on services, where we have significant strengths. Accounting for 80 per cent of the UK’s GDP and four in five jobs across the country, the UK is also the world’s second largest exporter of services, though these only represent 45 per cent of our total exports. Surely then, the argument goes, once we no longer have to worry about EU concerns in trade agreements we can ensure they focus on growing our services exports further. An alternate variant is that if we stay in a customs union with the EU, limiting our freedom to sign deals on goods, we’ll still be able to sign agreements focused on services.
Both true to a degree, but ignoring one fundamental problem. Barriers to trade in services are numerous and typically arise from domestic regulation on other countries. Free Trade Agreements agreed around the world manage only to reduce some of these, with limited economic gains.