The UK will use its newly independent voice at the World Trade Organization (WTO) to lobby for a global deal that harmonises regulations and promotes services trade across the globe.
As the clock ticks down on talks with the EU to recognise the regulatory status of the UK financial services sector, ministers and City lobby groups are forming a plan to open up global markets instead, This is Money reports.
A global agreement could open up Africa, Asia and the Middle East to City firms and other British companies that sell services.
Government advisors told City AM that the UK has previously been restricted in its ability to initiate negotiations at WTO level due to its former membership of the EU.
UK representatives will now use the country’s independent seat in Geneva to launch negotiations later this year.
Experts warn that progress on WTO negotiations could be slow, despite Britain forging ahead with several concurrent one-on-one talks with other nations.
Catherine McGuinness, policy chairwoman of the City of London Corporation, has been taking part in talks with the US on a ‘green deal’ for financial services, for instance.
An agreement with the US could make it easier to sell funds to the US if companies involved can prove their green credentials.
December’s trade deal with the EU barely touched on services even though they account for 50% of the UK’s exports.
The government is still in talks with Brussels to try to reach an ‘equivalence’ deal for UK financial regulations which would allow British firms to operate in the EU.
However, the EU has so far refused to grant equivalence status, even though an agreement must be struck by the end of March as a precursor to a full financial services deal later in the year.
Senior City players have quashed any hopes of a financial services deal with Brussels, Financial News reports.
Sam Woods, the Bank of England’s deputy governor and head of the Prudential Regulation Authority, said on 5 February that he wasn’t “holding his breath” on Brussels granting the UK equivalence status.
Bob Diamond, the former chief executive of Barclays and founder of Atlas Merchant Capital, said that an equivalence deal was a “political non-starter”.