by
on May 30, 2023 3 min read

The services sector plays a dominant role in the UK economy and is crucial for long-term export growth. However, the provisions for services in the Trade and Cooperation Agreement (TCA) between the UK and the EU are limited. There are a number of challenges faced by UK and EU businesses in the service sector and the current arrangements need for improvements. Approximately 60% of SMEs find the new relationship challenging, with mobility, immigration, and travel emerging as the most significant obstacles.

 

Impact on Business Movements

The TCA impacts business movements in the short, medium, and long term, specifically in the areas of visas, work permits, and regulatory restrictions. While longer-term movements (2-3 years) and short visits (under 24 hours) are generally permitted, certain common business needs pose challenges, including:

  1. Short-term notice movements
  2. Work assignments requiring 10+ days
  3. Assignments needing recognition of professional qualifications
  4. Exceeding the 90 out of 180-day limit for frequent travellers
  5. Implications for the music industry and touring musicians

 

Practical Implications

The practical implications of these challenges are significant and affect various aspects, including:

  1. Implementation difficulties for small companies without a branch office in Europe
  2. Lack of clarity and incomplete information on the gov.uk portal
  3. Inconsistencies in the enforcement of TCA obligations across EU member states
  4. The anticipated additional complexity of the ETIAS visa scheme
  5. Implications of the 12-month contract limit for the provision of services and difficulties due to the servicification of the manufacturing sector
  6. Reduced travel to the EU by law firms due to added complexity and lack of clarity
  7. Additional burdens faced by creative professions, including cabotage rules and Carnets and CITES issues.

 

Steps and Issues of Mutual Interest

To address these challenges and ensure mutual benefit, the UK can take unilateral steps such as:

  1. Improving government advice, particularly on the Gov.uk website
  2. Establishing a centralised system of information on EU member states
  3. Introducing a CITES point at St Pancras (subject to infrastructure availability)
  4. Accurate enforcement of the rules by UK Border Force

 

In addition, there are issues of mutual interest that require attention:

  1. Full implementation of the current TCA provisions
  2. Ensuring clarity and availability of information as per Article 145
  3. Allowing UK lawyers to practice under home title in all EU member states as stated in the TCA
  4. Expanding Annex 21 of the TCA to increase the range of activities for short-term business visitors
  5. Establishing commitments on visa processing times
  6. Facilitating the secondment of UK staff to the EU
  7. Enabling easier movement and work for cultural and young professionals
  8. Seeking consensus between the UK and the EU on enabling musicians to tour post-Brexit
  9. Reinstating the UK's participation in the Lugano Convention for cross-border enforcement of judgments

 

Wider Mutual Interests

There are broader issues of mutual interest, including:

  1. Expiry of data adequacy, customs duties on emissions, and electric vehicle standards
  2. Rules for digital services and challenges in global trade of digital goods
  3. Implementation of local content restrictions on audio-visual content

 

Addressing the challenges in the UK-EU service sector post-Brexit is vital for both economies. Enhancing the provisions for services, improving information availability, and fostering cooperation in various areas will not only benefit businesses but also contribute to long-term economic growth and stability.

 

*The update follows our third evidence session on the movement of workers, professional qualifications, business service which was held on 11th May 2023.