The Brexit Services Agreement – What You Need to Know
The United Kingdom`s departure from the European Union has impacted various sectors, including the services industry. While the UK and the EU reached a trade deal in December 2020, it did not cover services, which make up a significant portion of the UK economy. To address this issue, the UK and the EU signed the Brexit Services Agreement on 25 March 2021.
What is the Brexit Services Agreement?
The Brexit Services Agreement aims to provide temporary and limited access to the UK and EU services markets. It allows UK service providers to maintain the existing level of access to the EU market and vice versa. However, this access is not guaranteed to be permanent and is subject to review every two years.
The agreement covers 17 sectors, including professional and business services, telecoms, distribution, aviation, and energy. It also includes provisions for mutual recognition of professional qualifications, which will facilitate the movement of skilled workers between the UK and the EU.
What are the Benefits of the Brexit Services Agreement?
The Brexit Services Agreement provides stability and certainty for UK and EU service providers. It allows them to continue operating in each other`s markets without disruption while negotiations for a more comprehensive agreement continue.
The agreement also provides protection for UK businesses that rely on the EU market, such as the financial services sector. According to the UK government, the agreement will maintain the existing level of market access for UK financial services firms, including banking, insurance, and asset management.
What are the Challenges of the Brexit Services Agreement?
The Brexit Services Agreement is a temporary solution that does not provide a long-term solution for the services industry. The agreement is subject to review every two years, and the UK and the EU will need to negotiate a more comprehensive agreement in the future.
Furthermore, some UK service providers may face additional paperwork and bureaucracy when operating in the EU due to the loss of the European Union`s passporting system. This system allowed UK service providers to operate freely in the EU without the need for additional regulatory approval.
Conclusion
The Brexit Services Agreement provides temporary and limited access to the UK and EU services markets. It aims to provide stability and certainty for UK and EU service providers while negotiations for a more comprehensive agreement continue. However, the agreement is by no means perfect, and challenges remain, particularly regarding the loss of the European Union`s passporting system. It is essential for UK service providers to stay up to date with the latest developments and plan for potential future changes.