Britain and the European Union continue to remain deadlocked in their efforts to negotiate a trade deal with financial services agreements included, according to Reuters reports on Wednesday (March 7).
The EU rejected Britain’s trade requirements in its draft guidelines, with European Council President Donald Tusk noting that negotiators for the EU have “to take into account the repeatedly stated positions of the U.K., which limit the depth of such a future partnership. Being outside the customs union and the single market will inevitably lead to frictions.”
Reports noted that the guidelines limit regulatory and services agreements between the U.K. and the EU, with no mention at all regarding financial services, except to limit London-based FinServ firms’ ability to sell services to companies in the EU.
In response, British Finance Minister Philip Hammond said, “It is hard to see how any deal that did not include services could look like a fair and balanced settlement.”
He spoke at the HSBC’s headquarters on Wednesday, Reuters noted.
“So, I am clear not only that it is possible to include financial services within a trade deal, but that it is very much in our mutual interest to do so,” Hammond added. “The United Kingdom cannot automatically be a rule-taker. We cannot sign up to automatically accept as-yet unknown future rule changes. We must have the ability if necessary to deliver an equivalent outcome by diffrent means.
“It does not surprise me remotely that what they set out this morning is a very tough position,” he added.
Financial services agreements are among the most important for Britain in Brexit negotiations, with London the world’s top financial capital. Reports noted the city is home to the planet’s largest insurance market and more financial institutions than any other financial hub. According to Hammond, including favorable financial services trade agreements is beneficial to the EU as well as to Britain.