Professional Services

The ONS reports that UK exports of professional services, management consulting, and R&D services were just under 38 billion in 2016, an increase of around 56% since 2012.  Much of this growth has been driven by exports to the EU, which nearly doubled over this period. The EU accounts for around 43% of UK exports of these services. The Americas represent the second largest market, at around 28%.

The progress of liberalisation in professional services trade has been patchy, certainly when compared to others sectors such as telecommunications. This is especially the case in areas such as law and accounting. According to the OECD, the most prevalent form of restriction on trade in these sectors are nationality requirements that restrict the ability of non-nationals to practice. In the EU, liberalisation under the services directive has addressed some of these restrictions, but by no means all.  Free trade agreements struck between the EU and other trading partners have largely been limited to binding services restrictions at their current level, rather than reducing them any further.

These findings have implications for the UK, which has long positioned itself as a hub for professional services. It will be in its interest to ensure that future arrangements via a vis the EU manage, at the very least, to replicate existing levels of liberalisation. In particular, ensuring access to skills is critical to the UK’s competitive position. If the UK wishes to negotiate free trade agreements with non-EU trade partners, it would need to ensure that these go beyond the liberalisation commitments observed in such agreements to date.