Although the EU and UK will probably not be able to finalise every aspect of their future relationship before the end of the year, talks have begun and Spain is the first of three countries to call for services to be included in the first phase of trade negotiations.
With a tight deadline, it’s understood that there will have to be a focus on priority areas. Services accounted for 41% of exports to the EU from the UK in 2018. A lot of this was in the financial services industry and other related businesses.
In the same year, it had a €32.7 billion surplus on the trade of services. In Spain, this figure was €9.3 billion. Spanish exports to the UK for both goods and services was estimated at €35.7 billion. Around half of this was tourism related.
For the trade of goods, the UK registered a €110 billion deficit. The largest deficits were in the Netherlands and Germany, with the rest split among 11 member states.
A Spanish official urged the EU to reach an ambitious deal for goods, but also for services and investments. He said “Even if it is complicated, it is not impossible to include services”.
However, considering the complexity of the talks and the short deadline, EU chief negotiator Michel Barnier has already said he plans to prioritise other areas, like a zero tariff quota for goods, regulatory alignment between the EU and UK, a deal on security, and mutual access to waters for fisheries.
As the final negotiations must be finished by November to finalise the agreement by the deadline of 31st December – the end of the transition period – it’s expected that the Commission will propose a “comprehensive” mandate. It’s believed services will be included in this, but it’s still unclear at this stage.
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