Impact of Brexit on UK Service Exports

The service industry is the backbone of the UK economy, accounting for 80% of GDP and over half of its exports. However, recent data from the London School of Economics (LSE) and the British Chambers of Commerce (BCC) show significant challenges following Brexit.

Key Findings

• Export Decline: UK service exports to the EU have dropped by approximately 16% due to new trade barriers.
• Major Obstacles: Businesses are struggling with new licensing requirements, residency rules, and a lack of mutual recognition for professional qualifications.
• Sector Impact: High-value sectors like law, finance, and technology have been hit the hardest. Small and medium enterprises (SMEs) are particularly struggling with complex paperwork and customs procedures.

Digital vs. Physical Trade

• Digital Success: About 70% of services (like legal advice or accounting) can be delivered digitally via the WTO “Mode 1” and remain relatively unaffected.
• Physical Barriers: The remaining 30% of services require short-term travel or on-site visits. Current restrictions make it very difficult for UK professionals to promote or deliver services in person within the EU.

Moving Forward

To regain its competitive edge, the UK government is being urged to:

1. Simplify regulations and reduce paperwork for SMEs.
2. Push for mutual recognition of professional qualifications.
3. Loosen rules for short-term business travel.
4. Maintain tax-free digital trade to protect the growing digital economy.

***Photo Reference: https://www.ftvnews.com.tw/news/detail/2025520I03M1***