After months of talks, Liechtenstein and the UK have struck a deal to govern the trade relationships between both countries. Both are hubs for finance and fintech and are home to thriving startup ecosystems. A trade deal therefore matters.
Liechtenstein and the UK have struck a trade deal including provisions for digital paperwork to cut down the time and costs of post-Brexit border bureaucracy. After months of difficult talks, the comprehensive trade deal was finally agreed on. UK international trade secretary Liz Truss calls it a “major boost.”
A new trade deal
The deal will allow caps on mobile operators’ charges for international mobile roaming. It’s the first time such provisions were included in a trade deal worldwide. The goal is to keep costs low for holidaymakers and business travelers.
It also allows professionals from the UK to enter Liechtenstein for business purposes. The professional qualification of professionals such as nurses, lawyers, vets, and others is accepted in both partner countries.
In most other areas, the deal is similar to the trade deal that has been agreed on between the UK and the EU, with some improvements in the margins. One key aspect of the deal was to avoid trade becoming more bureaucratic and less dynamic. Red tape for exports and the lack of mutual recognition of changes in the two sides’ regulatory frameworks can create roadblocks for trade.
Since the UK left the European single market in January, the trade between the UK and Liechtenstein had been covered by a continuity deal that covered the trading of goods. The new agreement also includes services, investments, intellectual property protection, capital flows, and public partnerships. It aims to avoid discrimination of Liechtenstein-based companies against EU companies, ensuring the competitiveness of Liechtenstein’s economy.
A valuable relationship
The relationship with the UK matters, as both Liechtenstein and the UK are financial hubs in Europe. Both also have thriving fintech and startup ecosystems. Thus, it would be smart for businesses and policymakers to cooperate, as Liechtenstein can gain from the gap created by the UK leaving the European single market.
Both countries also share being part of Europe but not being EU member states. That creates common interests. It’s in both countries’ interests to ensure trade, and in particular digital trade, is smooth and without roadblocks.
“The agreement provides an excellent basis to continue our close economic relationships and expand it in the future,” says Dominique Hasler from Liechtenstein’s government.
Not everyone is as upbeat, though: David Henig, director of the UK Trade Policy Project, said: “This UK-EEA free trade agreement provides better trading conditions than World Trade Organization terms, though with considerably more trade barriers when compared with the previous single market relationship. “
“There are some useful provisions for UK business such as on professional qualifications or digital trade, but there will also be many difficulties as we see with the similar UK-EU trade and cooperation agreement. Overall this is quite a standard free trade agreement, with limited economic value,” says Henig.