Are you being served?

“Please hold, your business is important to us. You will be put through to the first available agent”

Anyone in the United Kingdom familiar with that heart-sinking message from the customer service department of their energy, mobile phone or bank will perceive there is a service deficit in the country.

But Britain has a thriving services sector and one that helps to redress the international trade balance of a country where it is too expensive to make things; as the possible demise of its steel industry testifies.

Patience-testing experience dealing with customer services maybe the front line of the services sector in the UK. But its hinterland of banking, financial services, legal services, professional services and a wide range of other “invisibles” constituting the services sector, is both vast and valuable.

Warning minefield!

As the heat in the debate on whether the UK should remain part of the European Union increases in the run up to the referendum on 23rd June it is a risk to nail ones blue and yellow or red, white and blue colours to the mast!

But perhaps raising as a question, an issue that has not been sufficiently debated, may provide some protection in the minefield.

Brexiteers argue that the EU needs the UK more than the other way around on trade. The Bremainers counter with by pointing to the 500 million-person market for goods.

Single minded

By focussing on the “trade gap” both camps are ignoring services and the potential for the growth in trade in services, in particular, the level of productivity that would be multiplied by increased cross border transactions in the services sector.

A single market in products has been largely achieved – a widget made in Greece can be sold without tariffs or taxes in any member state. However, liberalisation of services is still described to be, “a work in progress”.

“Services make up 70% of Europe’s economies and generate over 90% of new jobs, but account for only 20% of intra-EU trade”, says a UK government report. It concludes, “Where the single market is most obviously failing to fulfil its purpose is in services”.

Britain, with 78% of GDP derives from the sector has a comparative advantage in services, the benefits of which would be multiplied as barriers to cross border services activity fell. India and China’s services sectors are, respectively, 48% and 52% of their GDP. Doubtless there is huge potential, but with the single market of the EU having been tardy in developing cross-border trade in services, it seems unlikely the market for cross border services in emerging markets will open up any time soon.

Invisible barriers

A manufactured Greek widget has currency throughout the EU because it meets EU and industrial standards and to that extent is commoditised.

FinanceWriter’s Continental European clients are international banks, fund managers and corporations whose medium of communication in a globalised market is English.

FinanceWriter is fortunate that our clients require annual reports, marketing materials, websites, thought leadership papers or speeches for their senior executives written in English.

Our knowledge and experience in international financial markets and the language in which we work are global currencies that facilitate the export of our services.

Indeed it is to our benefit that the currency of language creates a barrier to those writing about financial services domestically in the countries these firms are based.

Ironically it is language and the domestic nature of most other services that have so far restricted the development of cross border trade in services in the EU. But Britain would be unable to profit if it excluded itself from participation in the break down the barriers.

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