Global Britain pushes for services trade deal at the WTO

The Mail on Sunday had an article this weekend about Britain apparently pressing at the WTO for a 'global deal in services.'  It's a typically gushing pro-Brexit article as you might expect, describing the government's first statement at the WTO after our exit from the EU as a plan to open up new markets and boost our economy by billions.  Needless to say, trade experts seem to find it less appealing than The Mail.

Sam Lowe tweeted:

Who even knows what they’re talking about. https://t.co/czVhzE8vqw

— Sam Lowe (@SamuelMarcLowe) March 7, 2021

He added sarcastically, "If you say 'services liberalisation' three times in a row all of the reasons that liberalising services trade has proven so difficult over the previous decades instantly melt away and countries around the world will cheer. Or so I hear."

What puzzled David Henig was the absence of any sort of plan to achieve the objective or any suggestion of a link between services and movement of people.  He also questioned why the recent EU trade deal didn't mention services at all.

Inside the EU, where there was already a single market in goods, Britain struggled to get a single market in services although it is still the most developed services market in the world.  At least there was mutual recognition of some professional qualifications and free movement of people. And there were just 27 other countries to persuade so we were far more likely to succeed in the EU we have just abandoned than in the WTO.

Now we have 164 countries, in an organisation that relies on consensus for making decisions and is notoriously ponderous, that we need to persuade and get agreement with. None of these difficulties are mentioned at all.

The statement at the WTO included this:

"[Services] has far outstripped the growth in the trade of goods in recent years. According to UNCTAD, Africa saw a 10% increase in trade in services in 2018, as did Asia. Even the developed countries, which have seen growth in goods trade stagnating, saw a 7% increase in trade in services in 2018.

"In the United Kingdom, services are the predominant driver of our economy. They contribute 80% of GDP, and employ roughly 26 million people. We are the second largest exporter of services in the world. Our professional business services sector generated more than £88 billion in exports in 2018, and we are proud of the contribution they make, enabling businesses and governments around the world to better access the global economy by providing legal, financial, accounting, and other services. One of the United Kingdom’s priorities in the WTO will be to increase this global trade in services, to the benefit of least-developed, developed and developing countries, by making services markets more open, more transparent, and more competitive."

This is a Brexiteer type pitch for Britain to get wealthier by exporting more of what we are good at. Unfortunately, this is not how global trade or the WTO works. Every one of the 164 countries is trying to do the same and if they offer us an advantage they will want something in return.  It also presupposes the great majority of countries are desperate to liberalise trade in services. This is doubtful as this tweet suggests:

We seem to have started at the WTO exactly how we were in the EU, demanding everything that benefits us and being miffed when others reject it - as they will. Britain seems unable to compromise or accept that it is no longer the leader of the world.

The Mail report one 'expert' saying, "Rolls-Royce sells jet engines, but a lot of the value in that export comes from the services contracts attached to the jet engine – the maintenance contract and the engineers that would come over and service them."

Rolls Royce have moved certification operations OUT of the UK and into the EU as a result of Brexit and are going to find the lack of a mobility clause in the TCA a serious drawback. 

There seems to be a notion that we can sell banking, insurance and legal services as if Asia and the USA doesn't have such companies already. And in Africa, it's as if local competitors won't be able to learn very quickly how to do things for themselves anyway.

We have a national trait of watching something difficult (exporting in this case) being done well by others and believing that because we're British we must be able to do it just as well if not better - but without all that hard work beforehand and thinking everyone else will just roll over and let us win.

It's the usual English-footballer-just-before-the-World-Cup  syndrome, based more on hope than reality.