Direction of travel
All this spells trouble for the UK financial services sector, which was only by mentioned by May in the context of “access for European firms to the financial services of the City of London”. Already before May’s speech, City UK, the financial services lobby group, had given up on retaining passporting rights for UK companies, according to the Financial Times.
A free trade deal with the US, if it even came on the table at all considering the anti-trade sentiment among Trump voters, in exchange for unhindered access to the European mainland would undoubtedly leave the sector worse off. It is unlikely to include financial services considering the international rivalry between London and New York.
The day before May’s speech, the UK’s Economic Secretary Simon Kirby addressed a crowd of investors in Hong Kong, stressing that the “UK as a leading global financial centre” is a “natural partner” for Asian companies. While the US and the UK are undoubtedly more open economies than China at the moment, the direction of travel is becoming increasingly clear: China is opening itself up, while the US is turning inward.
Of course, Xi Jinping’s defence of globalisation is not based on the same values the “citizens of nowhere” propagate. Instead, it’s highly transactional. But that hasn’t been a problem for the previous UK government, which invested a lot in strengthening its relations with China and in promoting the interests of UK financial services.
Theresa May would do better continuing on that path than to put the fate of her country in the hands of an erratic real estate magnate. And maybe someone could tell her that she will get the best trade deals if joining forces with other countries, such as the EU.
