Brexit will be damaging for UK-EU services trade

Significance

Even if it succeeds, this will have a greater disruptive impact on the trade in services than goods, because the EU’s single market enables greater cross-border services trade than is typical of other free trade agreements (FTAs). This is likely to cut the volume of EU-UK services trade, in which the United Kingdom currently enjoys a substantial surplus.

Impacts

• The United Kingdom’s departure from the EU will diminish its appeal for multinationals over the next few years, at least.
• The new UK immigration system could result in staff shortages in low-skilled services sectors.
• The imperative of tackling COVID-19 will likely delay the conclusion of new trade deals with non-EU countries.