The financial services section of the proposed free trade agreement is included in Chapter 17 and marks the first time that the Government has clearly set out its expectations for financial services in the UK`s future relationship with the EU. Among the key elements of financial services to be considered in the draft free trade agreement are: the government is establishing a bold and ambitious regime for financial services, including free market access and a new Financial Services Committee. While the UK, as a non-EU member state, essentially aspires to full access to the internal market, the EU`s approach is to make limited commitments on market access, including the cross-border provision of financial services. Moreover, even where market access exists, the EU will continue to apply its hosting rules to incoming suppliers. In summary, the gap between the two proposals is considerable and the two sides could not be further apart. The EU intends to maintain the existing architecture and restrictions on financial services and argues that any market access should be granted unilaterally by both parties in their own interest. The United Kingdom proposes to establish a single legal and governance regime and to allow reciprocal free market access under this agreement. It will probably be difficult to find an obvious compromise from these extreme starting positions. In the draft free trade agreement, the UK government proposes the creation of a new Financial Services Committee (FSC) to settle disputes over financial services between the UK and the EU. The FSC will monitor the implementation of the Financial Services Chapter of the Free Trade Agreement; assess the functioning of the free trade agreement as applied to financial services; examine issues relating to financial services addressed to them by the UNITED Kingdom or the EU; and to carry out the tasks entrusted to it by the Annex to the draft free trade agreement on regulatory cooperation. This proposal is in stark contradiction to the EU`s approach of creating a general framework that applies to all third countries. On 19 May 27, 2020, the UK government published draft legal texts containing 12 documents and a side letter in which it sets out its approach to the UK`s future relationship with the European Union, including the outline of a UK-EU Free Trade Agreement (FTA).
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