The trade deals that the UK Government has so far concluded with non-EU countries, will not for many years compensate for the loss of European Markets. London believes that the principal advantage of Brexit, is that it will empower the UK to be more open to trade with the wider world.
To date the UK has signed some 22 trade agreements with 50 countries, accounting on current figures for approximately 8% of British exports. Negotiations are ongoing with a further 16 countries including Mexico, Turkey and Canada, which probably accounts for a further 7% of British exports.
Last year the EU was Britain’s largest trading partner by far, representing 43% of exports and 52% of imports of the UK as a whole. Moreover, unlike other main economic sectors, the financial services of the City of London have been excluded from the main UK-EU trade negotiations. The EU rejected UK’s proposals to include a detailed financial services chapter in any final trade deal.
That exclusion of financial services from current negotiations has left many banks and other firms to make their own plans. Many think “something will come along at the last minute”. But that ‘last minute’ is fast approaching.
Goldman Sachs said on Tuesday that it would set up a ‘hub’ in Paris to ensure it could continue to trade European equities, if there is no deal. In the event of no last-minute deal, the UK economy will struggle in 2021 to compensate for the loss of access to the EU market.
21 Nov 2020