UK to sign Bern Financial Services Agreement to bolster business links with Switzerland

Thu 21 Dec 2023
Posted by: William Barns-Graham
Trade News

The UK is set to today (21 December) sign a financial services agreement with Switzerland in a bid to make it easier for businesses and individuals in the two countries to transact with one another.

Chancellor Jeremy Hunt is visiting Bern to sign the deal, and will reportedly say that the deal would not have been possible were it not for the UK’s post-Brexit trade policy independence.

A Treasury spokesperson told the FT:

“The Bern Financial Services Agreement is only possible due to new freedoms granted to the UK following its exit from the EU.

“The agreement will enhance the UK and Switzerland’s already thriving financial services relationship.”

‘Services superpower’

Marco Forgione, the director general of the Institute of Export & International Trade (IOE&IT), said the deal was “welcome news for a vital sector”.

“The Bern Financial Services Agreement is welcome news for a vital sector to the UK and we look forward to assessing the details in the coming weeks, as well as supporting our members to understand how they can benefit from it.

“Services exports are a vital cog in the UK economy and we continue to support the government’s efforts to reinforce the UK’s status as a ‘services superpower’ by breaking down barriers to trade.”

Forgione said that it was now important that the benefits of the deal are promoted to all regions and nations in the UK, citing a recent report from the IOE&IT that highlighted the need to bolster services export potential beyond London and the south east of England.

‘Regulatory certainty’

Paul Blomfield, co-convenor of the cross-party UK Trade and Business Commission, also supported the deal, telling City AM:

“This agreement will be well received across the City. It is a welcome acknowledgement from the government that providing regulatory certainty between UK industries and their most important markets is a good thing.”

The deal comes at a critical point for the Square Mile, with a recent report from the City of London Corporation finding that financial markets around the world are catching up with London, though the city remains the world’s second largest hub for the sector behind New York.

More detail needed

While the Treasury will hope that the deal represents some good news for UK trade before Christmas alongside reports that inflation declined faster than expected last month to 3.9%, some policy experts are waiting to make a judgement on its potential impact.

David Henig, the UK director for the European Centre for International Political Economy, told the Guardian:

“We don’t have any details of the agreement and that makes it very difficult to assess its impact. It is possible that it goes beyond the equivalence agreement that the EU has with Switzerland, but again, without knowing the detail, it is hard to judge.”