On March 7, the UK House of Commons International Trade Committee (Committee) published a report titled “UK trade options beyond 2019” (Report).
In the Report, the Committee examines different potential models for UK international trade after the United Kingdom leaves the European Union. The Report covers the UK’s relationship with the World Trade Organization (WTO), the proposed free-trade agreement (FTA) between the United Kingdom and the European Union, and the implications of the United Kingdom trading with the European Union under WTO rules only.
The Report considers the potential future framework for trade in financial services and discusses the potential loss of passporting of UK financial services into the European Union, the drawbacks of trying to rely on an equivalence decision by the European Commission, and the possibility of an agreement between the United Kingdom and European Union, which sits somewhere between passporting and equivalence.
Among other things, the Committee recommends that the government should:
- seek the nearest achievable approximation to the existing passporting framework;
- provide clarity on how complex disputes in the financial services sector will be resolved without the involvement of the Court of Justice of the EU; and
- in relation to any transitional arrangements, try to avoid a sudden end to passporting and to include fully worked-out arrangements for dispute resolution relating to financial services.
The Report is available here.