The British chancellor Philip Hammond has already announced that he wants to include a seperate section for financial services in a future Brexit trade deal. He recently said in an interview that “sceptics” to such a deal were wrong, and that it would be “in our mutual interest” to establish a free trade agreement when Britain leaves the EU next year.
Although Donald Tusk has commented that it would be too difficult to implement, and therefore unlikely to go ahead, organisations in the industry are pushing for a deal to be reached. Over 5000 British financial service companies rely on the passporting rights that are currently in place.
The British Bankers Association has also said that losing these rights and access to the EU markets would be “disruptive, costly and time-consuming.” The EU has already said that it has no choice but to remove these rights post-brexit. EU chief negotiator Michel Barnier has previously said that “On financial services, UK voices suggest that Brexit does not mean Brexit. Brexit means Brexit, everywhere”.
Donald Tusk also commented: “Yesterday the UK Chancellor made a speech in the City of London arguing for a bespoke deal or an ambitious FTA covering financial services – so I will refer to this issue of such great interest to London. In the free trade agreement we can offer trade in goods, with the aim of covering all sectors, subject to zero tariffs and no quantitative restrictions. But services are not about tariffs.”
“Services are about common rules, common supervision and common enforcement. To ensure a level playing field, to ensure the integrity of the single market, and to ensure financial stability, this is why we cannot offer the same in services as we can in goods. It’s also why FTAs don’t have detailed rules for financial services.”
“We should all be clear that also when it comes to financial services, life will be different after Brexit.” He added that the idea that a deal would be in the EU’s “mutual interest” isn’t true. “I fully respect the Chancellor’s competence in defining what is in the UK’s interest but he must allow us to define what is in the EU’s interest,” he said.
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