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This briefing note is concerned with the rules of the World Trade Organization (“WTO”) as they apply to financial services. The scope of trade liberalisation in relation to services is limited and, once the UK has left the European Union (“EU”) there would be scope for improving access for the financial services sector through an economic integration agreement with the EU consistent with Article V of the General Agreement on Trade in Services (“GATS”). One requirement of such an agreement is that it has substantial sectoral coverage. This would prevent an agreement with the EU that is restricted to financial services (or to a select group of service sectors).
This note considers the position if the UK is not be able to negotiate access to the EU Single Market and will instead rely on the rules of the WTO in order to trade with other EU/EEA Member States following withdrawal from the EU. The UK Government announced that it will seek to negotiate a preferential trade agreement with the EU, although as the shape of such an agreement is unclear, and might not be negotiated within the two years after notification under Article 50(2) TEU it is not considered here.