It is not a “realistic proposition” for the U.K. to accept a post-Brexit trade deal that does not include services and the EU would be “crazy” to cut itself off from London’s financial center, the British chancellor Philip Hammond said Saturday.
In an interview with the German paper Welt am Sonntag, Hammond made clear that he regarded a deal that excluded services as unfair. “More than 80 percent of our economy is services. Services is the fastest growing area of global trade. And it is the area where we have our biggest comparative advantage,” he said.
“To enter into an agreement on goods with no agreement on services would be a very one-sided arrangement and I don’t think that could be attractive for us,” he added, “Why should you cut yourself off from the world’s leading financial center right on your doorstep and find yourself beholden to other centers like Hong Kong, Singapore, New York or Tokyo? That would be crazy in my view.”
The EU’s chief Brexit negotiator Michel Barnier has said that financial services would be excluded from a Brexit trade deal. “There is no place [for financial services]. There is not a single trade agreement that is open to financial services. It doesn’t exist,” he said in an interview before Christmas.
In his interview, the British chancellor chided Europeans who still believe Brexit could be stopped, and put the onus on the EU to propose what the future relationship between the two could look like. “You in Europe must develop an idea about what the future looks like,” he said. “We want to know: What’s your vision?”
Formal talks on the U.K.’s future relationship with the bloc, including the framework for a future trade deal are due to begin in April, after EU leaders have signed off on a negotiating mandate for Barnier.
CORRECTION: This headline on this story has been amended to clarify that Hammond said a Brexit trade deal without services was not realistic for the U.K.