Dr. Martina Lawless:

The difference between goods and services is that the services trade relies strongly on mutual recognition of standards and, in some cases, licences, particularly in the financial sector. We have done less work on how services might be affected. When it came to goods, we had an explicit benchmark that we could use, that being, the EU tariff, which is published with the WTO and is listed product by product. Hard data were available on that front. On the services side, though, it is much more difficult to get an estimate. Either one gets access and an agreement or one does not. There is potentially more of an on-off market access element. Some work we did suggested that being a member state of the EU increased trade in services by approximately 20% compared to the amount of trade in services the EU does with non-member states. If we make the assumption that the UK leaving the EU loses that benefit, there could be something like a 20% reduction in trade in services. Some services are more sensitive to that than others, financial services in particular. Dr. McQuinn referenced this. In free trade negotiations between the EU and the UK, one would expect financial services to be a high priority on the UK's side, given that they are such an important part of the UK's overall economy. When it comes to various trade-offs and negotiations, a great deal of emphasis is likely to be put on continued services access, particularly financial services.