As the government outlines its plans for a Brexit trade agreement with the European Union, tech companies are worried that they may be left out in the cold by the deal.
Prime Minister Theresa May is championing her vision[1] of how Brexit will look. Under this, the UK will generally follow EU rules and regulations concerning goods, although the UK wants to reserve the right not to go along with European rules for all goods.
For services, the UK government hopes to have more flexibility to set its own rules -- even though, importantly, it acknowledges that this will mean the UK won't have as much access to European markets as it does now.
But tech industry body techUK[2] has already warned that if the final Brexit deal sees the UK effectively outside of the Single Market for services, this would put the UK's digital economy at a serious disadvantage compared to their European competitors.
"Given that 80 percent of tech exports are services, and our biggest market remains the EU, this will have very real consequences," said techUK CEO Julian David. "The UK tech sector does not see clear benefits of divergence with the EU. Indeed, there has been a strong consensus to maintain alignment on crucial issues such as data protection."
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A deal that only covers goods and not services would risk UK-based tech firms that sell into Europe having to comply with two competing regulatory regimes and being unable to guarantee that services can be provided on the same terms to customers in different locations.
This approach also fails to account for the fact that many products