Free Movement of Services and Brexit
25 Pages Posted: 8 Mar 2019
Date Written: March 8, 2019
The services sector has become hugely significant at global level, at European Union level or for the United Kingdom, currently engaged in the process of terminating its membership of the EU.
Globally, services represent on average about two thirds of the economic output in developed economies. They account for a lower proportion of international trade as a whole – between 20 and 25% – but a growing one, with growth being aided by advances in the uses and capacities of technology and by the interconnectedness and interdependence of modern economies.
At European Union level, it has been estimated that services make up about 70% of the EU’s economic output. At this level, services account for a lower proportion of cross-border trade as a whole, but still a highly significant one, with one fifth of services in the EU crossing a border.
Legal provision for free movement of services is made in Articles 56 and 57 of the Treaty on the Functioning of the European Union. However, other provisions of both primary and secondary EU law also play a major role. Insofar as concerns Treaty provisions, Articles 49 and 54 TFEU are significant for providing for the freedom of establishment, thereby enabling the setting up of subsidiaries of businesses in other member states. Most-cross border service provision is also supported by horizontal measures such as the 2006 Services Directive, the 2004 Citizens’ Directive, which provides for the free movement of persons (needed by, inter alia, many service providers) and the umbrella 2005 Directive consolidating the law on the recognition of professional qualifications. Sectoral legislation governing particular services has also been adopted over the years. One prominent example of this is the 1977 directive on lawyers’ services.
Keywords: free movement, services, Brexit, EU, treaty, Article 56, Article 57
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