London - UK Prime Minister Theresa May should seek a free-trade deal with the European Union (EU) that includes services or risk damaging industries that aren’t covered by World Trade Organisation (WTO) rules, a House of Lords panel found.
Exports of non-financial services amounted to £162bn in 2015, with 39% of them going to the EU. They include accountancy and legal services, telecommunications, broadcasting and aviation.
According to the Internal Market Subcommittee of the upper chamber’s EU Committee, the fear after Brexit for these industries isn’t about tariffs but non-tariff barriers, such as a requirement to have licenses in order to trade.
“The UK is the second largest exporter of services in the world,” Larry Whitty, the chairperson of the subcommittee, said in a statement.
“To protect the UK’s status as a global leader of trade in services, the government will need to secure the most comprehensive free-trade agreement that has ever been agreed with the EU.”
The panel urged the government to prioritize agreeing on a temporary arrangement under which businesses can continue to trade until a permanent deal is reached.
It warned that neither the aviation and broadcasting sectors would be covered by the WTO, meaning that if there were no accord, companies would have to rely on “outdated and restrictive agreements.”
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