EU trade deal must include financial services, says Hammond


Chancellor Philip HammondImage copyright
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Chancellor Philip Hammond will tell European leaders that it is in the “mutual interest” of both the UK and the EU to include financial services in a free trade agreement.

In a speech, Mr Hammond will set out his argument against “sceptics”, saying it is possible to reach a deal.

The EU’s chief Brexit negotiator, Michel Barnier, has argued that such a deal had never been done before.

But Mr Hammond will say the EU has in the past attempted similar agreements.

In December, Mr Barnier said: “There is not a single trade agreement that is open to financial services. It doesn’t exist.”

Mr Hammond will say on Wednesday that the EU itself tried to include financial services within trade deals with the US and Canada.

He will say: “If it could be done with Canada or the USA … it could be done with the UK.”

The Chancellor will stress: “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.”

The EU’s chief Brexit negotiator Michel Barnier says a trade deal including financial services ‘does not exist’

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The EU’s chief Brexit negotiator Michel Barnier says a trade deal including financial services has never been done before

On Tuesday, French economy minister Bruno Le Maire told the BBC: “Financial services cannot be in a free trade agreement, for many reasons, for reasons of stability, for the sake of supervision because there are some very specific rules for financial services.”

He said that the “best solution”, would be for a system of “equivalence” where both sides recognised each other’s standards.

But Mr Hammond will say: “It is time to address the sceptics who say a trade deal including financial services cannot be done because it has never been done before.

“To them I say ‘every trade deal the EU has ever done has been unique’.

“The EU has never negotiated the same arrangement twice. It has bespoke relationships with Turkey, Canada, Singapore, South Korea, Switzerland.”

However, Shadow Chancellor John McDonnell said: “The Chancellor has shown his hand, and it is clear he is looking for a TTIP type deal as his blueprint.

“Yet those negotiations took nearly four years and collapsed, which is why a transition period is critical.”

Mr Hammond will also say: “A trade deal between the UK and the EU must start from the reality of today, that our economies, including in financial services, are interconnected, that our regulatory frameworks are identical.”

Stephen Jones, chief executive of UK Finance, the trade body that represents the UK financial services sector, said: “Thousands of customers and businesses in Europe rely on access to financial services from the UK. It is in everyone’s interests for this vital cross-border trade to continue.”



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